Today we’re covering recent cashback, e-commerce and retail news in the EU. the markets vary from mature in the UK to evolving quickly in the modern EU countries and still developing in central and Southern Europe. As a result, there are market differences but e-commerce is widely popular and cross-border shopping online is easy in most countries.
Two-thirds of Europeans purchased online in 2015 and momentum is growing among EU consumers according to Eurostat. VC Mahesh Velanki compares US food delivery company GrubHub with EU counterpart Just-Eat and finds some fascinating differences and similarities. Swedish ecommerce was up 19% in 2015, reaching €5.36 billion ($5.91 billion). UK online supermarket Iceland was voted top online grocery by Which? magazine. Rocket Internet sold its food operations in Spain, Italy, Brazil and Mexico to Just Eat for €125 million ($140 million).
With more than $6 billion in assets, Swedish VC Kinnevik plans to increase its investment in India where it already has a presence with Jabong, Qwikr and FabFurnish. E-commerce in the Czech Republic grew 20% to reach two-thirdsbillion ($3.3 billion) in 2015. Leisure products are popular online purchases in Spain and ecommerce makes up 30% of retail sales. Two ex-Quidco managers launched EarnAway, a UK hotel discovery and rewards site. Webloyalty opened new operations in Belgium which has an estimated 6.1 million online shoppers and Mexico with an estimated 39 million Internet users.
65% of internet users in the EU shopped online in 2015
Nearly two-thirds of internet users in the European Union made online purchases in 2015. The share of online shoppers in internet users is growing, with the highest proportions (both 68%) being found in the group of 16 to 24 year olds and that of 25 to 54 year olds.
This can be concluded after some interesting research from Eurostat. It also found that the proportion of online shoppers varies considerably across Europe. In Romania for example, this share is only 18 percent, while in the United Kingdom it’s 87 percent. Via ecommercenews.eu
Food Delivery in EU Is Playing Out Very Differently Than in the US
As an investor, it’s fascinating to see similar business models emerge simultaneously in different markets. Observing the parallel environments is intellectually satisfying and there is much that can be learned. One category in particular where this has played out is food delivery, both in Europe and the US.
The first era of online food ordering was really marketplace aggregators. These two-sided marketplaces acted as middlemen between restaurants and consumers and took a fee per transaction. Seamless was one of the first to pop up in the US, founded back in 1999, and GrubHub soon followed in 2004. Meanwhile, in Europe, Just-Eat found its legs in 2001 and Hungryhouse soon followed in 2003. Over the years, a wide variety of food ordering aggregators popped up in various locales, but the key focus of this post is GrubHub vs Just-Eat.
Comparing these two businesses is a fascinating case study (full disclosure: we are investors in Just-Eat). The businesses are so similar it’s uncanny. They each grew for around a decade before hitting the public markets, Just-Eat on the London Stock Exchange and GrubHub on the NYSE. They even went public within a day of each other! Not only that, they had approximately the same scale, margin profile and growth! Take a look at this table I put together a few months after the IPO. Via mahesh-vc.com
Sweden: ecommerce up by 19 percent in 2015
The Swedish ecommerce sector has jumped 19 percent in 2015, reaching a value of EUR 5.36 billion ($5.91 billion), a recent study points out. According to a report cited by online media outlet EcommerceNews, ecommerce represents 6.9% of total retail sales in Sweden. The same source reveals that the most popular product categories are consumer electronics (EUR 1.18 billion), clothing and shoes (EUR 899 million) and books and media (EUR 385 million). The highest growth in terms of sales was registered in the DIY sector (+38%), furniture and deco (+34%) as well as baby and toys (+34%).
Results show that when it comes to those shopping abroad, almost one in three respondents ordered something from an online retailer based in the UK (32%), followed by retailers from Germany (28%), the US (24%) and China (also 24%). Via thepaypers.com
Iceland retailer ranked UK’s best online supermarket
Iceland, a supermarket chain, is the UK`s top supermarket for online shopping, a recent survey reveals. With 77%, the UK supermarket chain earned the highest score among online supermarkets for the first time, according to a survey conducted by Which?, a magazine from the Consumer’s Association, ecommercenews.eu reports. The relatively new online service outranked more experienced rivals such as Waitrose or Ocado.
Which? voted Iceland for the premier position based on factors like easiness to find products in said store, what the availability is of convenient delivery slots, substitutions, the drivers’ service, value for money and an overall customer score. Which? asked 7,009 members of the public in November 2015 about their online shopping at Asda, Island, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose Deliver. Via thepaypers.com
Rocket Internet Sells Food Startups in Spain, Italy, Brazil, Mexico for $140M to Just Eat
The takeout shakeout continues apace. Since going public in 2014, Rocket Internet has tried to simplify and reorganize the tangle of e-commerce startups funded and grown by the Berlin-based incubator to make the main business more profitable. Today comes the latest move on that front. Rocket Internet is selling food takeaway operations in Spain, Italy, Brazil and Mexico to Just Eat for €125 million ($140 million) — with the admission that they are all “non-core operations that are not market-leading”, in the words of Rocket.
The operations in Brazil and Mexico accounted for less than 5% of foodpanda’s revenues in 2015, Rocket noted. Just Eat, based in London, competes with the likes of Delivery Hero and others in online food ordering and delivery services. It went public in 2014 at a $2.4 billion valuation and has been steadily growing, currently valued at $3.7 billion. Rocket Internet is valued at $4 billion. Via techcrunch.com
Kinnevik looks to expand India presence
Sweden-based Investment AB Kinnevik, which manages $6.09 billion in assets, is open to expanding investments in India by three to four times over the next four years despite the indifferent performance of some start-ups in which it has put money.
Kinnevik is looking to increase its investments in India to 8-10 per cent of its corpus from 2-3 per cent now, chief executive officer Lorenzo Grabau said in an interview. Kinnevik exited its investment in food-ordering start-up Foodpanda (Pisces eServices Pvt. Ltd) last year, but stays invested in Jabong (Jade eServices Pvt. Ltd), online classified portal Quikr (Quikr India Pvt. Ltd) and online furniture store Fabfurnish (Alix Retail Pvt. Ltd). Via dealstreetasia.com
Ecommerce in the Czech Republic grew over 20% last year
Ecommerce in the Czech Republic exceeded all expectations. Last year, Czech €3 billion ($3.3 billion) in domestic online stores. Compared to the previous year, the Czech ecommerce industry achieved growth of over 20 percent.
APEK, the Czech association for electronic commerce, published the statistics for 2015. The ecommerce association expects the local ecommerce to grow by at least 15 percent in 2016. During the last twelve months, ecommerce in the Czech Republic accounted for 8.1 percent of total retail turnover. According to APEK’s CEO Jan Vetýška, this share has increased by one percentage point when compared to 2014. “The importance of ecommerce for the Czech Republic and the European Union continues to grow rapidly,” he said. Via ecommercenews.eu
Spaniards love to buy leisure products online
When Spaniards shop online, they mostly buy leisure-related products. Show tickets, books, music and restaurants are the products that are purchased online the most. Two out of three Spanish consumers shopped these kinds of products on the internet. Also, travel and consumer electronics were very popular last year.
Ecommerce continues to gain ground in Spain. Local internet users have made 30 percent of their purchases online in 2015, compared to 25 percent the year before. The average total amount spent on online shopping increased by 2 percent, from 1,330 euros in 2014 to 1,354 euros last year. Via ecommercenews.eu
Quidco Looks to Cash in on EarnAway: The New Hotel Spin-Off
Primed for holidaymakers looking to make a saving on their accommodation, Quidco – recognised as one of the UK’s biggest cashback sites – is hoping to win big off the back of a cashback offering for the travel industry.
EarnAway is a hotel discovery and rewards platform which allows the user to earn money back off what they spend on booking rooms through platforms like Hotels.com, eBookers, agoda, Venere and more. The new site lists former Quidco product director Joshua James and Markco Media chief commercial officer Robert Berrisford as its co-founders. Via performancein.com
Webloyalty expands its Latin American and European operations
Following its recent expansion in Australia and Turkey, Webloyalty has grown its international operations further with two new launches in Mexico and Belgium. Both markets present significant growth opportunities for Webloyalty, with organisations such as eBay, Otravo and Vente Unique in Belgium and Reserbus in Mexico partnering with Webloyalty at launch.
Belgium and Mexico are experiencing substantial growth within the ecommerce landscape, offering new opportunities for Webloyalty to help partner businesses drive their ecommerce revenue streams through its online savings programmes.
Belgium’s ecommerce landscape is now highly evolved, with 85 percent internet penetration and an estimated 6.1 million e-shoppers. With its estimated 39.6 million internet users, the Mexican market represents an important opportunity for Webloyalty’s Latin American operations which also include Brazil. Through its Mexican based programme, Beneficios Online, Webloyalty will be able to support this fast growing market by giving companies the opportunity to offer customers further savings and in return increase customer loyalty across the board. Via realwire.com
EU growth and global views
Perhaps it’s because of its many borders but EU companies are very comfortable investing in and growing businesses in other developing countries and making a success of it. Rocket Internet Group and Webloyalty are just two success stories. We’ll have lots more EU ecommerce news in the weeks ahead.