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As with many "pandemic winners", investors got a bit ahead of themselves, asΒ
$49 billionΒ turned out to be a huge valuation for a company that, at its simplest, just sells petΒ
stuffΒ online.
Sticky sales
Investors weren'tΒ
justΒ feeling fuzzy about their pets. They really likedΒ
Chewy's business modelΒ because it doesn't look like a lot of other e-commerce businesses for one simple reason: pets need to eat (and do other things) every day... and unlike us they are usually happy to eat the same thing over and over. That means repeat, predictable, purchases β which investors love.
Indeed, as of its latest quarter, overΒ
70%Β of Chewy's sales were from "Autoship subscriptions" β repeat subscription purchases for food, treats, cat litter, medicines or other pet supplies.
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