Theory of the Firm - Moonpig profits double as Covid pushes spending online

Here is a great example of a business whose revenues and profits have benefitted from the shift to online spending during the pandemic.

Moonpig (originally founded by Nick Jenkins) and now a recently-floated online greeting-card-and-gift platform has seen their year-on-year revenues double to over £350 million bringing a pre-tax profit of £32 million.

Part of their commercial success is getting customers to bundle cards and gifts to increase the average spend per transaction.

They fulfilled around one million orders a week last year and clearly also benefitted from economies of scale and expanding their customer base - it is nearly always cheaper to sell to an existing consumer than spend money on marketing to find new ones.

Once Moonpig purchases become almost a default option for those looking for cards for birthdays and other celebrations, then their revenue base will look really solid for the medium term even if we gradually return to shopping offline again.