Chances are “The Hut Group” doesn’t ring any bells.
But there’s a very good possibility you’re among the hundreds of millions of folks who shopped on one of the company’s websites last year.
This little-known name is, in fact, a multibillion-dollar kingmaker quietly powering the direct-to-consumer (D2C) efforts of some of the world’s biggest brands.
Most consumer goods giants are set up to ship pallets of product to mega-retailers.
Pivoting that operation to D2C — which requires sending 1 or 2 items to your door — is a logistical nightmare. Established companies that want to do this typically have 3 options:
The firm’s platform, THG Ingenuity, handles everything from website creation to warehousing, marketing, sales, and shipping.
In 2019, Ingenuity sites served 1k+ brands, saw 610m+ visitors, and shipped 80m+ products. Last year, their ~$7B IPO was the largest debut on the London stock market since 2013.
When the pandemic shuttered regular sales channels like stadiums and theaters, the soda maker’s revenue fell by 28%.
To help hedge losses, it tapped THG to launch an online store, which finally made it possible to order a Coke subscription without ever getting off the couch.
That’s great news for THG, which sees gross margins of 82-99% on its software, according to the company’s investment prospectus.
Century-old brands like Nestle, who had almost no D2C presence 10 years ago, estimate D2C will make up ~10% of sales by 2022.
Now, they’re THG clients, along with P&G, Walgreens, Disney, Microsoft, and other D2C-challenged titans of industry.