The grocery landscape in Germany has just had a radical shift in direction: Knuspr.de, the subsidiary of the Rohlik Group, announced a partnership with Amazon.de to offer grocery to Prime members. According to reports, Amazon has shut down Amazon Fresh in Germany.
Internet Retailing did a breakdown of Rohlik’s Retail Media proposition recently, and this announcement marks a radical shift in Rohlik’s strategy. Rohlik has more than 1 million monthly orders and is on track to surpass €1bn in revenue in 2024 – a 42% year-on-year growth in the first half of the year. The partnership with Amazon also opens the door to further international expansion.
Who is Rohlik?
Rohlik is one of the leading eGrocery players in Europe, operating in five markets: Czechia, Hungary, Romania, Germany and Austria. The company’s unique customer proposition is a combination of fast and precise delivery, large assortment and value for money.
Rohlik offers an extensive product assortment that simplifies grocery shopping by eliminating the need for multiple shopping trips. Orders are delivered within 90 minutes with the possibility to select 15-minute same-day time windows, with more than 17,000 items to choose from and prices in line with brick-and-mortar competition.
Rohlik was founded by Tomáš Čupr in 2014 with the view that people should “eat well and live well” by offering a broad selection food to customers via a technologically advanced delivery service coupled with excellent customer service.
Rohlik Ads is the Retail Media division of the Rohlik Group. The concept of Retail Media at Rohlik is part of a flywheel strategy, where the value provided to advertisers leads to lower prices for customers, faster growth for the business, and in turn, more value for advertisers, resulting in an accelerating growth cycle.
Rohlik’s Retail Media gives advertisers access to affluent urban audiences with high purchasing power: shoppers buy three orders per month and have basket sizes ranging from €60 to €90.
The Amazon and Rohlik tie-up
Amazon and Rohlik are launching ‘Knuspr on Amazon’ to give Prime members access to a premium, locally-focused assortment, with plans for rapid expansion across Germany over the coming months and next year.
Knuspr on Amazon is launching in Berlin with over 15,000 items, including everyday groceries, personal care products, and locally sourced goods from farmers and artisans. Deliveries arrive within hours, fully integrated into Amazon.de. Expansion plans are already underway, with services soon extending to the Munich metropolitan area and the Rhine-Main region.
“We are excited to offer Knuspr grocery deliveries to our Prime members in Germany,” says Ganesh Rao, Vice President of Amazon Grocery International. “Knuspr offers a broad, regionally-focused assortment, and fast, flexible deliveries and this partnership reinforces our commitment to bringing together low prices, vast selection, fast delivery options that Amazon customers know and love.”
“We are proud to partner with Amazon to accelerate the transformation of Germany’s e-food market. This partnership gives Prime members access to our broad and unique assortment, saving them time while ensuring convenience and quality,” says Tomas Cupr, Founder and CEO of Rohlik Group.
For Amazon, this partnership is a complete pivot. Instead of building its own grocery ecosystem in Germany, the tech giant is leveraging Knuspr’s expertise to establish a foothold in a market where independent competition has proven challenging.
Why is this interesting from a Retail Media perspective?
Rohlik’s Group CFO, Vineta Bajaj, has spoken about how Rohlik are a “profitable same-day online grocer AND the only same-day online grocer that has proven that we can deliver a grocery order profitably in Germany.”
What is one of the drivers of this profitability? Rohlik’s focus on the shopper ensures a deep integration of Retail Media into its business model: Rohlik offers full funnel advertising options, such as onsite placements such as display and video ads throughout the customer journey, and – via Criteo – offsite inventory in Czechia, Hungary and Germany. Additionally, Rohlik leverages out-of-home advertising (OOH) through formats like branded delivery bags and wrapping of delivery cars. Its next stop is self-serve.
So, how will this work from a Retail Media perspective? Here are three different outcomes that could happen:
- Who is the real ‘big kahuna’ of Retail Media? Why, Amazon! Amazon is on target to do $50bn plus in advertising in 2024 alone, dwarfing every other retailer. If the Knuspr.de partnership, Amazon not only becomes a serious grocery player in Germany, its stands to increase the attractiveness of its audience to advertisers and to create a new version of its famous “flywheel” but this time for groceries – with all its attendant suppliers.
- Brittain Ladd, a supply chain and logistics expert in retail says that Amazon should assess shutting down all Amazon Fresh stores in the UK as Amazon has failed to offer UK Prime members (and consumers in general) a viable grocery service that can compete against the leading grocery. He also suggests that Amazon should assess acquiring the Rohlik Group and Ocado Group in the UK. The latter recently announced their own Retail Media Network. In other words, Amazon could buy two major grocery groups across six European countries – adding in millions of new audiences and creating the first pan-European grocery business that has a foothold in the biggest markets.
- The importance of Rohlik as a Retail Media business would decrease in Germany – the biggest market in Europe. Amazon would ‘own’ the relationship with the shopper – not Rohlik. This would impact Rohlik margins, but they would gain in volume and revenue. Perhaps Rohlik founder, Tomáš Čupr has negotiated a percentage of Amazon Advertising revenues as they pertain to Knuspr.de ! If he can pull that off, that would be very interesting.
