Supermarket chains keep a close eye on online store turnover | New
Selver, which topped Kantar Emor’s latest food e-commerce ranking, increased its turnover by 55% and order numbers by 64% in Estonia last year.
Selver’s head of communications, Rivo Veski, told ERR that behind the significant growth were restrictions related to the COVID-19 pandemic, the biggest impact on e-commerce of which was around this time last year. when all stores beyond essentials were closed. .
“It also greatly increased the demand for e-commerce,” Veski said. “Last year, Selver was – and remains – the only online supermarket offering nationwide home delivery of the supermarket’s assortment.
Last summer, Selver expanded its delivery area to include all of mainland Estonia as well as the main western islands of Saaremaa, Hiiumaa and Muhu.
Barbora, owned by Maxima, which according to Emor data has the second largest customer base in Estonia, announced this week that its online store’s turnover had increased by 40% to 141 million. euros last year. However, this figure reflects the total turnover for Estonia, Latvia, Lithuania and Poland combined.
“We have agreed internally not to specify revenue by country,” said Anna Maria Naanuri, communications specialist at Barbora.
This is also the case with other online supermarkets operating in Estonia.
Helen Lednei, director of e-commerce at Rimi Estonia, said ICA group rules do not allow them to publish all data. Their online store revenue grew by almost 300% last year as Rimi launched their online store in 2020 and was also boosted by the COVID pandemic.
According to data from Kantar Emor, Rimi’s online store has risen to third place in customer size in Estonia, overtaking eCoop.
Kantar Emor’s research expert, Kersten Jõgi, said that while Rimi’s online store results remained stable over the year, eCoop’s position declined somewhat.
Jõgi noted that eCoop has a significantly lower percentage than its competitors of loyal customers who consider it their primary store.
Fifth in popularity is ePrisma, which, according to Emor’s figures, has already been overtaken in number of customers by market newcomers Bolt Market and Wolt Market.
Prisma Peremarket’s total revenue increased to 235.1 million euros last year, however, according to Prisma’s Head of Communications and Corporate Social Responsibility (CSR), Kristiina Tamberg, they only publish also not the financial results of ePrisma separately, as it is an integrated component of Prisma’s store. networks.
Tamberg noted that the volume of online orders has grown steadily over the past two years, with growth increasing by 35% last year. The chain also significantly expanded its delivery area last year, including in parts of the country without its own Prisma store, such as Pärnu, Märjamaa and Viljandi.
At the end of 2021, more than 300 people worked for e-Selver, and 250 for Barbora. Rimi’s online store operations employ some 140 people, although the exact number depends on demand — according to Lednei, the number of employees is highest in the spring and fall.
Grocery deliveries not very profitable
According to data from the Bank of Estonia, the combined turnover of Estonian online shops amounted to 2.5 billion euros last year. Compared to 2020, this represents an increase of 50%.
The CEO of the Estonian E-Commerce Association, Tõnu Väät, told ERR that online grocery sales have grown exponentially and that a significant part of the e-commerce growth over the past year was specifically attributed to groceries.
Offering grocery deliveries, meanwhile, means a lot of extra expense for businesses, including a dedicated fulfillment center, order groups, and delivery drivers.
“These expenses are so great that it’s not very profitable,” Väät admitted. “It’s more profitable for merchants to sell in their stores. It’s a volume business; they need big volumes to make money. Nobody makes big profits here.”
Väät estimates that purchases from online stores account for around 10% of retail chain turnover, a figure that could most likely reach 15-20% by 2030. Growth figures of several hundred percent do not should not continue, however, as these were related to the COVID restrictions of recent years, under which e-commerce was the only option for shopping.
“Grocery delivery will surely continue to grow, will be made faster and more convenient, and we will surely see further growth there, but this market is relatively saturated,” he noted. “Lidl has also entered the market; for the small size of Estonia there are many large retail chains.”
Väät added that he doesn’t think new entrants to the market are likely, but that other smart transport options will likely be added in the future.
He considered the refusal of supermarket chains to publish e-commerce turnover as a stupid policy, although there are understandable reasons for it.
At the same time, companies are also not keen on sharing other data too much. Selver’s parent company, Kaubamaja Grupp, for example, is a publicly traded company, and it’s common for these companies to release exactly as much information as required by law, because releasing additional numbers doesn’t in any way benefit to their business.
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