However, we believe there are pockets of eCommerce in which Amazon doesn't have a "right to win", and pet food/heavy logistics is one them (at least not yet).
Accentric: If your view about "heavy logistics" businesses vs. Amazon is correct, Wayfair should also be in a good competitive position. Have you looked at it at all? I don't want to derail this thread, but I was trying to think about whether Zooplus or Wayfair is better positioned to deal with Amazon over the next 10 years.
KJP - I actually took a look a month or two ago after someone pointed out the similarities. However, my concerns (albeit from a cursory glance) is that Wayfair isn't a commoditied product. My fundamental thesis for all retail and eccommerce businesses is that at a pure level, it's a logistics business. WMT only had stores because it was too expensive to ship directly to a customer's door 30 years ago. You can buy Kellogg cereal from any number of stores, but customers choose WMT because it's the cheapest. And it's the cheapest, because they have the best in class logisitics and inventory fulfillment system. Now that the logistics economics have changed, so have the "right to win" business models.
So going back to the commoditized topic, I believe the easiest way to win in ecommerce is to sell a commoditized product at the cheapest price, and with the best service. Those are the only two qualities care about from a retailer (quality, safety, etc largely is attributed to the brand, not to the retailer). Because price search is so easy online, it's very easy to see which online retailer you should choose (and thus makes Zooplus' advantage that much clearer to customers).
My fear with Wayfair is that it's a "discovery / showroom" business. Unlike commoditized products, where you know what you get online is the same as in-store, with Wayfair you really have to "trust" the quality and that it will look how you envision it to. Also with pet food, you generally order the same brand for years. With furniture, it's something new each time. However, it's 30%+ growth certainly shows there are others out there who enjoy shopping on it. Also I've done some checks with consumers, and most of the purchases seems to be smaller ticket items (lamps, pillows, etc) that some people change every few months (ie new look for ever season). It's not going to break the bank if it's not exactly what you wanted. (Also you can corroborate this by backing this out / calc'ing the basket size per order, which if I remember right is <$200 per order. They're not buying big ticket items here). So all this to say the company will probably do well, and I know a few very smart people that are invested. However, I just think Zooplus is a "cleaner" business model, for my view of how ecommerce works best.
Lastly, I'd like to make a disclaimer that I took down my LT margin assumptions since speaking with mgmt after publishing the report. I was told optimized logistics will likely hit ~17% vs the 15% I indicated, as Poland, Czech Republic, and Germany were unique case (Eastern Europe has very low labor costs, and Germany has been operating for a decade so it's very efficient). All else equal, this takes normalized op margins to 5 - 8% (let's call it 7%).
However what's not priced into this figure is 1) Private label taking off (which it has. still a tiny absolute number, but growing ~70% y/y). 2) Gross margins hitting a bottom / recovering. Grocers are the most competitive, and I'm hearing many of them are selling break even / below cost in order to drive traffic to store. Suppliers are giving a lot of credit now, so if that ever turns, it should be a positive for margins.
And yes, let's please get the discussion back on track. What makes markets is disagreement, but it's more productive if done in a friendly manner.