This morning's announcement by Ahold came as a surprise. Where many specialists in the retail industry asumed Ahold would buy Wehkamp.nl (number 1 in the Twinkle100), Ahold decided different, they acquired bol.com (number 2 of the Twinkle100) for €350 million in cash. Ahold (3rd in the Twinkle100) and bol.com together are the biggest e-retailer in The Netherlands when this take over becomes final. Honestly, in the end this take over might be not such a bad shot for Ahold. Let's dig a bit deeper.
bol.com helps Ahold to increase their product range
The acquisition of bol.com is an important next step in Ahold’s growth strategy, which focuses on growing sales by increasing customer loyalty, broadening its offering and expanding geographic reach. Bol.com’s ambition will get an extra boost from being part of a strong international retailing group. Bol.com is the most visited retail website in the Netherlands serving 3.4 million active customers, with total net sales of €355 million in 2011. Almost half of all Dutch customers who purchased products online shopped at bol.com in 2011, buying more than 17 million products. It offers a broad range of products in various non-food categories including books, entertainment, electronics and toys. Categories which are basically all new to Ahold and mean a broader product diversification.
“We welcome bol.com to our family of strong retail brands. bol.com provides us with the platform, scale and expertise we need to accelerate our growth in online retailing. Its capabilities and operations in non-food categories will broaden our assortment and increase our online presence, adding to the existing online food offering through albert.nl. Together, we will be able to offer customers more choice, greater convenience and better value.” (Dick Boer, Ahold CEO)
Bol.com will become the fifth retail brand for Ahold in the Netherlands, alongside Albert Heijn, Etos, Gall & Gall and albert.nl. The current management team will continue to lead bol.com, which will remain located in Utrecht. Ahold will acquire 100 percent of bol.com from Cyrte Investments and NPM Capital for a transaction value of €350 million, fully paid in cash.
Wehkamp.nl may be just didn't match too well
The expected take over of Wehkamp.nl might have been used by Ahold to cover the talks with the bol.com owners, only they can tell. Fact is that Wehkamp.nl is supposed to cost probably around €600-750 million, although the Wehkamp.nl turnover, about €423 million, is not that that much higher. This is probably caused by the fact that Wehkamp.nl includes a big financial part as well. In fact they earn a lot of money by offering credits to their consumers.
You could also say that the corporate identity of Ahold and bol.com match better and for sure their client base does. Probably also the bol.com product range matches Ahold better. In The Netherlands a super market strongly focusses on food and they offer some side products. In the rest of Europe the big retail chains like Tesco, Auchant, Carrefour, etc offer a lot more from household appliances up to electronics and everything in between. With bol.com Ahold moves online into a similar direction. Clothes is the only missing part here, but the question is whether this is a bad thing for them.
Another opinion we could hear today is that the technological platform used by bol.com is more modern than the one Wehkamp.nl is using. This would make integration for Ahold with bol.com easier.
All in all probably sufficient reasons for Ahold to choose the "cheaper" bol.com option to better experience the e-retail world. Anyway it looks like they will be the biggest e-retailer in The Netherlands after this acquisition as the graph above shows.
Why do you think Ahold acquired bol.com? What do you think about this take over? Will Ahold manage to leverage the bol.com power towards their own webshops?