November 6, 2018

Cdiscount swims doggedly over the Rhine

Idefix and Asterix (source: spatuletail_shutterstock)
Dogmatix, always ready to scout abroad for his master (source: spatuletail_shutterstock)
The rich cultural heritage with which la grande nation has enriched our world must surely also include Asterix. Among the delights of this children's comic is Dogmatix, the little dog who frequently makes himself useful by sniffing out exciting new opportunities and adventures for his master. Perhaps it wouldn't be stretching the simile too far, if we compared these two legendary characters with online retailer Cdiscount and its big French retail parent Casino?

At any rate, Cdiscount is hounding through Germany at breath-taking speed. Since putting its first paw on the right bank of the Rhine in July, France's third-largest e-commerce player by sales has organised 14,500 collection points in the packet shops of local logistics company Hermes. Cdiscount wants to open 6,200 more with parcel delivery company DPD by the end of Q1 2019.

So given this very loud bark, let's talk to the leader of the pack, Cdiscount CEO Emmanuel Grenier, about his plans in Germany...

The Neuilly-sur-Marne based company already offers German online customers ten million products for home delivery via DPD, with another 30 million set to follow. This huge assortment includes the propositions of 10,000 French and international retailers on the Cdiscount marketplace website.

Cdiscount is also increasing penetration through 100,000 to 150,000 lines on the marketplace websites of a growing number of local retailers. These already include Metro Group hypermarket subsidiary "Real", consumer electronics multiple Conrad, Coolshop, Pixmania and Dutch online shop operator VidaX.

"We feel serene"

Emmanuel Grenier, CEO Cdiscount (photo: Cdiscount/Sebastien Ortola_REA_laif)
Cdiscount/Sebastien Ortola_REA_laif
Emmanuel Grenier
Why come to Germany with an online concept when most Germans seem happier shopping at a discounter?

Building on our 20 years of experience in France, where Cdiscount was the first player in the e-commerce arena, we decided last July to open up our offer to other European markets, including Germany, Belgium, Italy and Spain.

Why did you first choose to partner with Hermes rather than one of its local rivals?

One of our main partners for collection points in France is Mondial Relay, a subsidiary of Hermes France and therefore ultimately of German parent company Otto Group. Collection points have been part of our success in our home country where we are the e-merchant with the largest number, i.e., around 20,000. Hermes was a logical choice because it has the greatest network of collection points in Germany.

Presumably your cooperation with Hermes is also an attractive option because the use of packet shops avoids the high cost of 'last mile' deliveries to customer homes?

Our main preoccupation here is to offer various delivery solutions to our clients. That's why we not only offer delivery to collection points at Hermes packet shops but why we also provide a home delivery service via our partner Chronopost or, more specifically, its German partner DPD.

But shouldn't home delivery be your main proposition when customers increasingly demand convenience?

This is precisely what we were told in 2008 when we opened collection points in France. However today, and ten years on, collection points are still preferred by 60 per cent of our customers.

Why do you have no German domain?

German clients can order on our website and are delivered directly from our Bordeaux warehouses.

When will you translate your site into German?

We are currently working on this, but we cannot announce a precise date for the moment.

When will you tidy up your webshop and make it more navigable for German consumers? A quick search for wine, for instance, didn't seem to provide much customer orientation...

Thanks to artificial intelligence and other new technologies, we have increased the performance of our search tool. We have also developed other tools for our clients in order to guide them through their online buying journey. For instance, we have a virtual sommelier who helps to choose the appropriate bottle of wine according to the occasion meal.

But, if one selects, for instance, bird cage accessories on your site, the customer is overwhelmed by an astonishing 4,873 lines. By comparison, the online service of German hypermarket operator Kaufland online only offers three or four such items. Shouldn't you curate your offer more?

I actually checked this one out and have no idea how you come to your 4,873 lines. I found only 243 and can narrow the search down thanks to the filters on the left-hand side of the screen.

Top 5 e-commerce retailers in France (source: LZ Retailytics)
Top 5 e-commerce retailers in France ranked by gross revenues (estimates for 2018)
"Real", Metro Group's chronically underinvested hypermarket chain, has been burning sales and cash for years. Why did you choose them as a local marketplace?

"Real" is not our sole partner, but it is one of the major German marketplaces. As an e-merchant, we're always seeking to reach a broad scope of clients. Thus traffic is essential and working with "Real" offers us the opportunity to benefit from one of the largest customer traffic sites in Germany.

Your parent company, Casino, has high net debt. Its share price, on which future refinancing depends, is down a third since the beginning of this year. The creation and expansion of an online offer is highly capital-intensive. As your main shareholder, Jean-Charles Naouri, sells off assets and conducts sales & leaseback operations etc., how confident are you that he will not sacrifice Cdiscount to future debt service exigencies?

Jean-Charles Naouri was a visionary when he bet on e-commerce and Cdiscount as early as the year 2000. Casino has strongly supported Cdiscount from the start and continues to further innovation in all its online subsidiaries. All of them are doing fine with good operational results.

As for the debt, a deleveraging plan was announced last summer and has been implemented since, going even further than the objectives announced for this year. We therefore feel serene.

Lebensmittel Zeitung with digital sister (photo: LZ)
photo: LZ
Our German retail B2B newspaper, Lebensmittel Zeitung, in print & digital
Read in German: 'Cdiscount baut die Reichweite rapide aus' by international editor Mike Dawson on page 10 of Lebensmittel Zeitung, no. 44, 02.11.2018

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