Dutch e-commerce scale-up Coolblue finally breaks through “magical” barrier of €1 billion turnover

Dutch e-commerce group Coolblue released its annual report for 2017. The report shows the Dutch group earned 1.2 billion euros in the Netherlands and Belgium. It was an increment of 38% compared to 2016 and an EBITDA of €21 million over the same period. Its aggressive market expansion also resulted in the group opening its e-commerce shop for Wallonia, the French-speaking Belgian market . 

Coolblue’s history

Coolblue was founded in 1999 by Pieter Zwart (CEO), Paul de Jong and Bart Kuijpers. Zwart, a graduate of Rotterdam School of Management, Erasmus University is obsessed with ‘customer satisfaction’. In the video below, Zwart distills his company’s corporate culture and the team is able to post consistent growth.

In some ways, Coolblue appears to emulate Amazon’s strategy of excessive emphasis on customers satisfaction and planned growth.

Why didn’t Amazon find it easy to capture Netherlands market?

Amazon launched amazon.nl with an assortment of Dutch Kindle e-books in 2014. This was followed by the addition of Dutch language to its German website amazon.de. It clearly reflected the e-commerce giant had its eyes on the Dutch market but found it difficult in the presence of Coolblue and Bol.com, another Dutch e-commerce company that posted €1 billion in revenues in 2016.

There are other web shops selling electronics including bcc.nl, bol.com, mediamarkt.nl, and wehkamp.nl that compete with Amazon. Hence, an easy walkover in the Dutch e-commerce market is highly unlikely.

Expanding to new markets is not just about translating content

Although Amazon tried to target the Dutch market by translating its German website, it needs more than translation to effectively target new markets.

For instance, Omnia, an integrated pricing, and online marketing software analyzed pricing data of Amazon.de and other Dutch e-commerce websites. It concluded that:

“Looking at price ratio, amazon.de indeed has the lowest prices. However, the difference compared to mediamarkt.nl is small. Looking at price position it seems that amazon.de is not pricing efficiently, because – although it has the lowest price ratio –  its price position is one of the worst.

This seems counterintuitive, as Amazon is known as one of the most advanced retailers in terms of dynamic pricing capability. The logical explanation for this is that Amazon does not have localized pricing for the Netherlands. The amazon.de pricing advertised in the Netherlands is simply their German price points and these price points are fully based on the German market,” wrote Sander Roose of Omnia.

Coolblue’s CEO knew this reality when in 2015 he commented that:

“We have no intention to add another market right now. As soon as we see our growth slow down, we will do that, but it is not easy. Another language is not just a matter of translating the website. You have to approach a lot of things differently, like manuals in other languages for instance”, CEO Pieter Zwart said in September 2015.

Expanding the Coolblue way

Here’s a timeline of Coolblue’s expansion to French-speaking Belgium and addition of other delivery channels last year.

• 2017- Enters the Walloon and Brussels markets through the introduction of multilingualism
• 2016- Coolblue expands its delivery service CoolblueBezorgt taking its fleet to 150 buses, 600 deliverers and 8 depots spread across the Netherlands and Belgium.
• 2 stores were successfully introduced in Amsterdam and The Hague

Present predicts the future

The latest financial results have Coolblue’s Pieter Zwart share an aggressive plan for 2018.

“The strategy of continuous investment in our customer propositions pays off! 2017 was the most beautiful Coolblue year ever. We have achieved our biggest sales increase since our start and have never made so many customers happy. I want to thank all 3,500 Coolblue people for that, “says Pieter Zwart.

The company plans to increase revenues by a quarter this year to 1.5 billion euros.