Picnic expanding into big European markets
The Dutch online grocery pure player Picnic is expanding through the big Central European markets of Germany and France. The expansion is graudal, but at the same time rapid. This is combined with the somewhat unique business model of Picnic.
The company differentiates itself them from traditional online pure players with the so-called “modern milkman” approach. Picnic delivers every street in the delivery area only once a day. This enable significantly more efficient routing and thus should help drive the last-mile costs lower.
With geographical expansion, Picnic is also taking a patient but active approach. In 2018 Picnic launched it’s first international market, Germany (in Düsseldorf). Since then the company has expanded in the country and aims to serve the whole country (in cities) by 2025.
The German expansion is also illustrative how a pure play online grocery starts to grow in a new country. This gives perspective to how the expansions of Oda in Finland and Germany could progress and how Rohlik can be expected to grow in Germany.
With 23 M€ during the first year and 165 M€ already in the third year, the pure players will gradually become important channels for buying groceries in the bigger cities. Picnic is expecting the 2022 revenue to hit 280 M€. More detailed analysis of Picnic in Germany can be found from Exciting Commerce website.
In May 2021 Picnic entered France. Currently Picnic serves a 500 000 household region in the Northern France, but aims to increase that to 2 million households by the end of the year. Eventually the company has an objective to reach Paris with over 10 million people living in the metropolitan region.
Ambitious objectives and collaborations
By expanding to Germany and France, two of the biggest grocery markets in continental Europe, Picnic is really gunning for significant growth. In terms of market potential the markets are really different. Where France is much more established in terms of online grocery, Germany is only starting to adopt online as a grocery channel.
The emergence of online as a channel in Germany provides opportunities and threats. Multiple online players (Rewe, Knuspr, Oda, Amazon, Flaschenpost…) want to get their share of the growing online channel. The increased compaetition will certainly make it challenging to break through.
In France the market is much more saturated and the customers are more adept in buying online. However, despite the mature competition majority of online happens through Click & Collect. This gives an edge to Picnic whose entire business model is built on reliable (but slow and efficient) and always free home delivery.
Probably the most encouraging sign for the future of Picnic are the strong collaborations the company is having in France and Germany. In Germany Picnic partnered with the market leader Edeka. In France Picnic switched its supplier from Cora to System U. These partners give Picnic a strong footing to offer competitive prices. Coupled with free deliveries that can be a strong value proposition for the customers.
More about Picnic and its expansion
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