Tomáš Čupr, founder and CEO of Rohlik Group, talks to ESM about the online grocer's eagerness to both drive profitability and deliver a winning proposition for shoppers. This article first appeared in ESM January/February 2023.
In December, the group announced the expansion of its leadership team, promoting Rohlik Czechia chief executive Olin Novák to the role of international CEO, to oversee day-to-day operations in its Hungarian (Kifli.hu), Austrian (Gurkerl.at) and German (Knuspr.de) businesses, as well as in Romania, where it operates the Sezamo brand.
In January, it followed this up with the appointment of former Ocado Group finance director Vineta Bajaj as its new chief financial officer, a further indication of its aspirations.
At a time when many other e-commerce players are finding the going tough, Rohlik Group is doubling down on its commitment to become ‘the definitive European online grocery company’, as the company put it in a recent statement.
“Rohlik Group is focused on three key strategic issues as part of its goal of becoming Europe’s largest and preferred e-grocery delivery service – automation, improving the proposition for customers and profitability,” founder and chief executive Tomáš Čupr tells ESM.
Of these, he adds, automation is arguably the most important, with the group upgrading its fulfilment centres to increase efficiency and improve customer experience.
“This includes automation investments in Prague and Munich in 2022, with a roll-out into all fulfilment centres in western Europe in 2023,” says Čupr, who founded Rohlik in 2014, having sold food delivery portal DameJidlo.cz to DeliveryHero a few months previously. “Automation will help to further improve perfect orders and hence customer satisfaction, as well as reduce the cost of picking – and ultimately increase profitability.”
The Rohlik Group operating model incorporates aspects of other pure-players such as Ocado, Picnic and Norwegian operator Oda, as well as Amazon. It offers around 17,000 SKUs – priced comparatively to that of mainstream operators – which it delivers in some markets within 60 minutes of ordering, or within a 15-minute, same-day time window. Sourcing locally where possible, fresh produce accounts for around 40% of sales, more than that of its competitors.
According to Čupr, the business’ strategy “does not vary” in the different markets in which it operates, with the operating model built around four key pillars – Great Experience, Differentiated Assortment, Great Value and Sustainability – regardless of the geography.
“By using data and a proactive approach to understanding customer needs, we have a localised assortment in each city in which the company operates,” he explains.
“This is highly valued by customers as it saves them time and means they don’t have to visit multiple stores to find the products they need. This approach also helps to increase customer satisfaction and loyalty.”
Investors have flocked to the business in recent years, in June 2022, the group raised €220 million in Series D funding, led by Index Ventures and Belgian investment firm Sofina, whose CEO Harold Boël praised Rohlik’s “focus on local supply and on assortment” which, he added, “will put it in a good position to capture a significant share in e-grocery”.
Funding will be used to accelerate tech investment in the group, including the automation of fulfilment centres, electric mobility, and further expansion in the markets in which it operates.
At the same time, Čupr and his team are aware of the need to drive profitability into the business. Investor confidence in e-commerce has tapered off in recent months, reinforcing the need for businesses to stand on their own two feet. Rohlik has been profitable in Czechia since 2018 and in Hungary since 2021, so it’s on the right track.
“We are currently making multi-million investments in Germany and Austria, so we are fully committed to growth even in a challenging economic environment,” Čupr says. “We are massively upgrading all our fulfilment centres as part of our goal of becoming Europe’s largest and preferred e-grocery delivery service.”
Read the full-length feature in ESM's January/February 2023 edition.