Food/Near-food comes out on top; Picnic riding high
The Dutch e-commerce market continued to see a spike in revenue in 2018. Dutch consumers spent nearly €24 billion on products and services online in the past year, an estimated 10% increase over the previous year. This data is sourced from the Thuiswinkel Markt Monitor, a survey into online consumer spending in the Netherlands. The survey is conducted by GfK and commissioned by Thuiswinkel.org, in association with PostNL.
Measured by product category, the category of Food/Near-Food rose the fastest (by 24%). This mainly covers online orders placed with supermarkets. GfK expects this segment to continue to grow in the foreseeable future, and that online supermarket revenues will double over the next four years to 8.1% of total supermarket revenues in the Netherlands overall. GfK has calculated that this translates into 54 million online orders with an average price of €65 and in 1.7 million fewer visits a week to physical supermarkets (even if the bulk of the supermarket revenue will still be generated by these brick-and-mortar stores in 2023).
GfK does believe that consumers will spend on average less money online four years from now. “Currently, it’s mostly families and affluent consumers who shop for groceries online. That means online customers spend a great deal more money on groceries than average. This amount is set to decline in the coming years,” says GfK Research Director Joop Holla.
Online supermarket Picnic, an NPM Capital portfolio company, is riding high on this trend. According to supermarket watcher Distrifood, Picnic is rapidly moving into a mass market. By 2017, 1.7% of Dutch households sometimes used Picnic for their online grocery shopping, and 81% of this number even used the service more than once.
This puts the percentage of customers who place an order more than once higher than for both Albert Heijn (57%) and Jumbo (58%), according to Distrifood. However, at €40, the average purchase amount at Picnic is markedly lower than for other online grocery retailers: the industry average is around €75.
Still, Picnic has managed to conquer around half of the market in the past year in the geographic areas where it operates. This has notably affected the share of market leader Albert Heijn: during the first quarter of 2018, AH controlled around 44% of the online supermarket share in the ‘Picnic territories’, versus 33% held by Picnic. By early 2019, Albert Heijn’s share had dropped to just 30%, with Picnic claiming more than 50% of the market. “This does not mean that Albert Heijn is actually losing revenue,” says GfK’s Holla. “The total share of online supermarkets in the researched areas increased by 33% in the past year, so Albert Heijn did see an increase in its online revenues.”
Holla expects the growth in online grocery retail to continue steadily, particularly among young singles and couples and busy young families with more disposable income. He believes Picnic is especially likely to carve away revenues from grocery retailers with no online ordering service, including Vomar and Dirk van den Broek.
See also: ‘Four NPM Capital portfolio companies in list of TOP 250 Growth Companies in 2019’ – with Picnic at no. 1