Ahold has bold plans to grow Bol.com
June 23, 2015 01:39 PM
Even as grocer Royal Ahold NV gets deeper into talks over a possible merger with one of its biggest competitors, it continues to retool and revamp Bol.com, its primary European e-commerce site.
Details of the talks aren’t being made public but Ahold, No. 15 in the Internet Retailer 2015 Europe 500 Guide, on Monday issued a terse statement noting that the company is “in the final stages of negotiation” with Louis Delhaize Group, a Belgian international food retailer with 3,410 stores in seven countries on three continents.
In May Ahold confirmed reports it was in preliminary talks to merge with Delhaize Group, which has annual revenue of $29.40 billion. Ahold is a Netherlands-based company that owns and operates European grocery store chain Albert Heijn, U.S.-based online grocer Peapod LLC, No. 69 in the Top 500 Guide, and the Giant and Stop & Shop chains in the U.S.
As Ahold considers merging the company, it continues to invest heavily in Bol.com, an online mass merchant based in the Netherlands that Ahold acquired in 2012. In fact Ahold is investing about $68.1 million (60.9 million euro) to help diversify and grow Bol.com into a more pan-European online retailer that will help Ahold generate e-commerce revenue of $2.84 billion (2.5 billion euro) by 2017. That compares with an Internet Retailer estimate of $772.7 million (691.6 million euro) in 2014.
“In e-commerce big is beautiful, which is why the big get bigger and better,” Bol.com managing director Daniel Roper told attendees last week at the Bernstein Global eCommerce Long View Conference in London.
Over 16 years in the European e-commerce market Bol.com has grown from operating as a book-selling site into a diversified mass merchant with 5 million active customers and an online inventory of 9 million products that ships 70,000 products daily.
Bol.com began adding such product categories as computer games, software, computer gear and consumer electronics in 2004 but began accelerating the rollout of more product categories in 2013. In the past two years Bol.com has added 14 product categories ranging from health and beauty items to sporting goods and jewelry. Though a release date has yet to be set, Bol.com will add bags and accessories sometime this year, Roper told attendees.
In 2011 Bol.com also launched a marketplace on its site but began expanding that unit aggressively in 2013. Today the marketplace on Bol.com features 4,000 sellers representing an inventory of about 1.5 million items. Revenue from the marketplace has grown from about 10% of all e-commerce revenue in 2013 to about 16%, or $140.4 million (125.7 million euro) in 2014. Bol.com didn’t break out specific web sales for 2013.
Bol.com is diversifying because it wants to compete more effectively against bigger European web merchants including Amazon.com, No. 1 in the Internet Retailer 2015 Europe 500 and Germany-based Otto Group (No. 2). “Retail in Europe is changing,” Roper told attendees. “Bol.com is changing from ‘a do-it-all yourself’ retailer into one that achieves growth diversification, better performance and a network of partners.”