
Translated by Milo Dvorak
15. 2. 2024
Business Newsletter #8
Good morning,
A little later than usual, but I'm pleased to be sharing this week's second newsletter nonetheless!
This time, it's what I think is a huge Czech success story regarding the Rohlik online grocery shop and their expansion to Germany, and I think today's delivery, albeit not of groceries, is packed with a lot of vocabulary. Might this be an indicator that us Czechs have finally caught up with the Western customer-service standards?
Published by E15 on 14 February 2024.
Tomáš Čupr's Rohlík is gearing up for a crucial phase of its German venture. This spring, it aims to enter the Berlin market and appeal to nearly four million residents. However, the Czech startup faces a slightly different challenge in the German capital, where numerous online food retailers are already operating.
Rohlík's management believes that within a year, Berlin will become the city with the highest revenue volume. Currently, the company operates in Munich and Frankfurt am Main in Germany. By 2030, the Czech startup aims to operate in 15 German cities, generating revenues of five billion euros, equivalent to CZK 126 billion. The latest known financial results are from 2022 when the entire Rohlik Group, operating in the Czech Republic, Germany, Austria, Romania and Hungary, turned over CZK 13 billion.
For further expansion, Rohlík will likely need additional funding from investors and it is actively seeking it in the market. "We don't need another round, but we want it because we have a proven concept and a profitable city in Germany. Now it's just about how many such cities we can replicate this success in," said the company's founder, Tomáš Čupr, at the end of last year in an interview with the Sifted magazine.
Rohlík won't be building its operations in Berlin from scratch. Another online food retailer, Bringmeister, is already present in the city, which Rohlík acquired last year. While the exact launch date is not known yet, according to a blog post by the company, it is expected to happen "this spring." Bringmeister had previously announced plans to become active by the end of last year, but it seems the implementation did not occur as food delivery by Bringmeister in Berlin is still ongoing. The spokesperson for the German branch, Manuel Kalleder, noted that "No specific date can be provided," but assured that Bringmeister would continue to operate until Rohlík was launched, so its brand won't disappear immediately.
The Berlin branch is expected to rely on a fully automated warehouse in the Schönefeld district, known mainly for a park that was once an airport. This is likely the reason for the delay in the operational launch. In other aspects, the merger of Bringmeister and Rohlík is advancing, as the reduction of staff at Bringmeister's Berlin headquarters by 70 employees shortly after the acquisition was announced, slashing it down by more than half of the original 120 staff members.
According to Tomáš Čupr's statement on LinkedIn, the launch is likely not to happen before May. He noted that the automation of warehouses in Vienna, Frankfurt, and Munich meant that operations in German-speaking countries would depend entirely on automated warehouses. In the case of Berlin, he spoke of a launch in May, so it can be assumed that Rohlík won't be operational in Berlin before that.
According to the spokesperson for the German branch, the next cities in line for expansion are Hamburg and Essen. However, the exact timing of this expansion has not been determined yet and the size of the investment cannot be estimated due to the incomplete automation of the Berlin warehouse. For example, the Czech startup announced an investment in an automated warehouse in Hamburg in December 2021, stating that operations in the port city with nearly two million inhabitants would be launched within the next two years, which did not happen in the end.
"The potential for online groceries in Germany is enormous," said Mark Hübner, the head of Rohlík for the German market, in a press release. However, Berlin already has a significant number of online food retailers, including Amazon Fresh, which Hübner has led in the past. Other companies such as Rewe, Picnic, Bottle Mail, and Alnatura also deliver groceries in the city, making the competition quite fierce.
Rohlík is placing a significant emphasis on Germany. Due to its focus on the German market, the company paused last year its expansion into two other European countries, namely Italy and Spain. "We will go deep in Germany. We're not going anywhere else before we've grown really big there. And only then will we expand to other markets, based on our German success," said Čupr in December last year for the Sifted magazine.