Saudi Arabia’s leading beauty-focused e-commerce platform, Nice One Beauty Digital Marketing Company, has announced its plans to undertake an initial public offering (IPO) on the Main Market of the Saudi Exchange (Tadawul). This strategic move marks a significant milestone for the company and underscores the burgeoning e-commerce sector in the Kingdom.
Strategic Move to Public Markets
Nice One, established in 2017, has swiftly risen to prominence as the largest online platform for beauty and personal care products in Saudi Arabia. The company’s decision to float an IPO follows the approval of its application by the Saudi Capital Market Authority (CMA) on September 25. This approval allows Nice One to offer a total of 34,650,000 ordinary shares, consisting of 29,150,000 existing shares (sale shares) and 5,500,000 newly issued shares (new shares), which will constitute 30 percent of the company’s post-IPO share capital.
“Omar Al Olayan, CEO and co-founder of Nice One, expressed his pride in the company’s journey, stating, ‘This IPO marks a significant milestone in Nice One’s journey. It reflects the dedication and hard work of everyone involved since we founded the company in 2017.’” Al Olayan continued, highlighting the company’s consistent innovation and adaptability in a dynamic marketplace.
Funding Growth Initiatives
The proceeds from the IPO are earmarked to support Nice One’s ambitious growth initiatives. These include expanding working capital, developing and marketing its brands, enhancing logistical and technical capabilities, and advancing overall business objectives. By accessing public markets, Nice One aims to accelerate its expansion and solidify its position in the competitive e-commerce landscape.
Allocation of IPO Funds:
- Working Capital: To support day-to-day operations and manage increased demand.
- Brand Development: Investing in marketing and expanding product lines.
- Logistical Enhancements: Upgrading warehouses and transportation fleets for seamless delivery.
- Technical Capabilities: Enhancing IT infrastructure to support a growing customer base.
These strategic investments are designed to ensure that Nice One continues to deliver exceptional value to its customers while driving sustainable growth.
Robust Financial Performance
Nice One’s financial trajectory has been impressive, reflecting its strong market presence and operational efficiency. For the fiscal year 2023, the company reported a revenue of SAR 782.4 million, with a net income of SAR 32.6 million. In the first quarter of 2024, revenue surged by 61.2 percent year-on-year, reaching SAR 250.1 million, while net income skyrocketed by 146.6 percent to SAR 21.9 million. Additionally, Nice One’s EBITDA margin improved significantly from 4.5 percent in FY 2021 to 10.2 percent in Q1 2024, showcasing enhanced cost efficiency and scalability.
“Abdularahman Al Olayan, CMO and co-founder, echoed these sentiments, emphasizing the company’s commitment to growth, digital transformation, and alignment with Saudi Arabia’s Vision 2030. ‘The IPO represents a pivotal moment in Nice One’s journey. As we enter this new phase, we aim to enhance our investments in digital transformation, broaden our market impact, and deliver sustainable returns for our shareholders,’ he said.”
Expanding Market Reach
Founded in 2017, Nice One has quickly established itself as the go-to platform for beauty and personal care products in Saudi Arabia. The company boasts an extensive catalog of over 28,000 products from more than 1,200 global and local brands, catering to millions of customers across the Kingdom. With a specialization in cosmetics, skincare, haircare, fragrance, and nutritional supplements, Nice One has built a robust brand reputation, evidenced by over eight million app downloads and a 90 percent customer satisfaction rate.
- Extensive Product Range: Offering a wide variety of beauty and personal care items.
- Strong Brand Partnerships: Collaborations with top global and local brands.
- Advanced Logistics: A main warehouse in Riyadh and a company-owned transportation fleet ensure timely and efficient deliveries.
- Reliable IT Infrastructure: Hosted on Amazon Web Services (AWS), ensuring high platform reliability and operational efficiency.
These strengths have positioned Nice One as a leader in the Saudi e-commerce sector, setting the stage for its public market debut.
Statements from Leadership
Omar Al Olayan, CEO and co-founder, highlighted the significance of the IPO, stating, “This IPO marks a significant milestone in Nice One’s journey. It reflects the dedication and hard work of everyone involved since we founded the company in 2017. We have consistently innovated and adapted, scaling the business in a dynamic marketplace. As we move forward, we are excited to expand our reach and continue delivering world-class products and services to our customers.”
Abdularahman Al Olayan, CMO and co-founder, added, “The IPO represents a pivotal moment in Nice One’s journey. As we enter this new phase, we aim to enhance our investments in digital transformation, broaden our market impact, and deliver sustainable returns for our shareholders.”
Underwriters and Bookrunners
In preparation for the IPO, Nice One has appointed EFG Hermes KSA and SNB Capital Company as joint financial advisors, bookrunners, and underwriters for the offering. These financial institutions will oversee the book-building process and manage the sale of shares to institutional investors. Additionally, SNB Capital has been designated as the lead manager for the offering.
Other leading financial institutions, including SAB Invest, Al Rajhi Capital, Saudi Fransi Capital, Alinma Investment, Riyad Capital, and AlJazira Capital, have been appointed as receiving agents to assist with retail subscriptions. This robust underwriting team underscores the strong market confidence in Nice One’s growth prospects and its readiness to transition to a publicly traded entity.
Market Impact and Future Prospects
Nice One’s IPO is expected to have a positive impact on the Saudi stock market, particularly the e-commerce and technology sectors. By listing on Tadawul, Nice One not only gains access to a broader pool of capital but also enhances its visibility and credibility in the market. This move is likely to attract more investors to the e-commerce sector, fostering a competitive and innovative business environment.
Potential Market Benefits:
- Increased Investor Confidence: Boosting market sentiment towards e-commerce and technology companies.
- Capital for Expansion: Providing funds to fuel further growth and diversification.
- Enhanced Market Presence: Strengthening Nice One’s position as a market leader in beauty and personal care e-commerce.
Looking ahead, Nice One’s public listing is poised to accelerate its growth trajectory, enabling the company to scale its operations, expand its product offerings, and explore new market opportunities both within Saudi Arabia and internationally.
Aligning with Vision 2030
Nice One’s IPO aligns seamlessly with Saudi Arabia’s Vision 2030, which aims to diversify the economy away from oil revenues and foster the growth of new industries and sectors. The e-commerce boom is a critical component of this vision, driving innovation, creating jobs, and enhancing the quality of life for Saudi citizens.
Vision 2030 Objectives Supported by Nice One:
- Economic Diversification: Reducing reliance on oil by expanding the digital economy.
- Job Creation: Generating employment opportunities in technology, logistics, and marketing.
- Innovation and Technology: Promoting digital transformation and advanced IT infrastructure.
By going public, Nice One not only strengthens its own growth prospects but also contributes to the broader economic objectives set forth by Vision 2030, positioning Saudi Arabia as a leader in the global digital economy.
Nice One’s decision to float an IPO on the Saudi Exchange marks a significant chapter in its growth story. With robust financial performance, strategic market positioning, and a clear alignment with national economic goals, Nice One is well-equipped to capitalize on the opportunities that lie ahead. As the company transitions to a publicly traded entity, it is poised to continue its trajectory of innovation, expansion, and market leadership in the e-commerce sector.
