Dusseldorf When the Czech start-up Knuspr started in Germany last summer, the announcements sounded utopian. In just a few years, the company wants to become the market leader and supply all major German cities with food. A turnover of more than one billion euros will soon be achievable.
Current figures show that the company should keep its promises. Germany boss Erich Comor told the Handelsblatt: “We are growing very strongly, we already have 70,000 customers who regularly order from us.” In April 2023, when the parent company Rohlik closes its financial year, sales in Germany will already be 100 million euros, not even two years after the start.
The market for food delivery services in Germany is highly competitive. In Munich alone, where Knuspr started, Rewe, Amazon, Bringmeister, Gorillas, Flink and Fresh Post advertise for customers. And the first delivery services are already having problems.
Gorillas has just announced that it is slowing down its growth path and laying off 300 administrative employees. Investors have so far financed the start-up with more than one billion euros. Delivery Hero has discontinued its delivery service Food Panda in Germany after a short time. Bringmeister announced nationwide expansion in 2021 after being taken over by an investor – little has happened so far.
Top jobs of the day
Find the best jobs now and
be notified by email.
Knuspr, on the other hand, is growing according to plan. In February, Frankfurt was added as a second location. Germany boss Comor reports: “For example, at Easter we already had a thousand orders a day there, which is twice as fast as in Munich.”
New locations in Hamburg, Essen, Cologne, Düsseldorf and Berlin
Other locations will follow: “We will start in Hamburg in September or October, in Essen either this year or early next year,” says the Knuspr boss. “Cologne, Düsseldorf and Berlin will then follow over the course of the next year.”
The delivery service has raised a lot of money, but is only growing more slowly.
(Photo: Reuters)
A recently published study by the market researcher Appinio shows how quickly Knuspr managed to penetrate the consciousness of many customers. Although the company initially only delivered in Munich, Knuspr already had a brand awareness of 27 percent in Bavaria at the beginning of the year – half a year after the start.
The delivery service manages better than many of its competitors to convert its reputation into business success: 16.3 percent of those surveyed who said they knew the Knuspr brand would order there regularly. This figure was 9 percent for gorillas and 9.1 percent for Amazon Fresh.
In terms of monthly access figures for the website and the mobile offer, Knuspr has moved up to third place among the delivery start-ups. This is shown by figures from the data service provider Similar Web. Only Flink and Bringmeister are in front of it. So far, however, they have also had significantly larger delivery areas.
So far, however, no food delivery service has managed to make a profit – although many have been active in Germany for years. Rewe, for example, has been delivering for more than ten years, but still cannot say when it will start making money with the service.
In the Czech Republic, the mother company Rohlik is already profitable
Growth is currently more important than profitability, said Rewe digital boss Christoph Eltze recently in an interview with the Handelsblatt: “We believe in our model and want to continue to grow. That’s why we’re still willing to accept losses.” Rewe thinks like the start-up founders.
But Knuspr wants to prove that rapid growth and profit are not mutually exclusive: “In the Czech Republic, we have proven with Rohlik.cz that we are able to run this business profitably,” says Comor. So far, no other provider has been able to do this. “It is very important for our investors that we show that this is also possible in the highly competitive German market.”
The head of Germany at Knuspr also names specific periods of time for this: “In Munich, we want to have reached the threshold to profitability by the end of our financial year in April 2023. In Frankfurt it should be in 18 months.”
>>> Read here: Flink buys French competitor Cajoo and gains next major trading partner
In industry circles, it is often said that it is important to largely automate the delivery centers in order to become profitable. Knuspr also relies on this process. Operations in the new warehouse in Hamburg, for example, should run almost automatically. One of the two warehouses in Munich is already fully automated.
However, Comor says: “Profitability is also possible without automation.” The key to profitable operation is a high value of the average shopping cart: “For us, the average order is already 80 euros, for many customers the value of an order is already more than 100 euros,” he reveals.
Knuspr has invested almost 100 million euros in Germany
With the competition, the amount of the shopping cart is secret. But hardly anyone is likely to achieve these values. Fast delivery services such as gorillas, which have a significantly reduced range, should only come to less than 30 euros, according to industry circles.
The second important factor in achieving profits is productivity in operations, says the Knuspr Germany boss: “We constantly measure all data to make operations as efficient as possible. If you optimize those two factors, you can make a grocery delivery service profitable.”
Is the stationary trade a disadvantage for Rewe’s delivery service?
(Photo: imago/photothek)
Ironically, he does not see market leader Rewe as the strongest competitor. For Comor, it’s more like Amazon Fresh or the start-up Picnic. “Competitors who also do brick-and-mortar retail don’t have the right focus on making e-commerce special for the customer,” he claims.
Knuspr delivers the orders within three hours. The start-up sees same-day delivery time as a prerequisite for success. “Rewe sometimes had problems delivering the following week,” says Comor. “That doesn’t make you competitive in the long run.”
However, building up efficient logistics costs a lot of money, he says: “We have now invested almost 100 million euros in Germany, most of it in the delivery centers.” And the parent company Rohlik Group is expanding in parallel in Italy, Spain and Romania.
But Comor leaves no doubt that the group can handle it financially. In 2021, the company raised 290 million euros in funding. And later this year, he says, “we’ll close another round of financing.”
More: Fierce competition is forcing delivery service gorillas to downsize