Love Bonito sees 45% revenue growth in 2022 amid costly expansion bet

Singaporeans love to shop, and this applies to online shopping too. On average, the country spent over twice as much on ecommerce platforms compared to others in Southeast Asia.

One company tapping into this opportunity is Love Bonito, a direct-to-consumer fashion platform based in the city-state. In 2022, its revenue jumped 45% from the previous year, although losses also doubled.

A spokesperson from Love Bonito tells Tech in Asia that the growth in its sales was mainly driven by strong performance in both the company’s domestic and international operations, specifically in Hong Kong and the US. This international push was underpinned by a US$50 million sum raised in October 2021.

According to the company’s financial statements, Singapore remains its largest revenue generator, contributing US$31.9 million – or two-thirds of overall revenue.

However, the company’s proceeds from its “rest of the world” segment, which includes Hong Kong, the US, Japan, and the Philippines, grew the most. This segment recorded a 73% uptick year on year, compared to Singapore’s 41% increase, and accounted for 17% of overall revenue for 2022.

Love Bonito opened its first two physical stores in Hong Kong two years ago. Before that, the company’s presence was only online. “We leaned into consumer preferences and the rebound in offline retail, which also paved the way for our first US pop-up in SoHo come 2023,” the spokesperson says.

This shift in strategy helped the business achieve a “double-digit growth year” in 2023. “We focused on sustained growth and saw that our strong omnichannel strategy contributed to an equal 50/50 revenue split [between online and offline operations].”

Previously, Love Bonito CEO Dione Song said that the company’s omnichannel presence allowed it to diversify its revenue streams.

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This expansion, however, has come at a cost. The company’s total losses in 2022 more than doubled year on year to US$17.1 million.

Net cash flows used in operating activities also ballooned to US$14.3 million from just US$1.8 million in the previous year. This might become a pressing issue, as Love Bonito’s cash and cash equivalents and investment securities at the end of 2022 dropped to US$19.9 million.

The widening losses were mainly due to higher administrative expenses, which the firm’s spokesperson attributes to the “significant investments” it made to bolster its presence in new markets like Hong Kong and the US.

A Love Bonito pop-up store in Hong Kong / Photo credit: Love Bonito

Additionally, the company invested in Singapore-based healthtech firm Moom and acquired activewear brand Butter in 2022 to expand its catalog.