Who really likes to lug around diapers and baby food? With a successful combination of both low-margin and more profitable baby products, the Munich-based eCommerce company windeln.de has long since grown out of its startup phase. Munich Startup visits a major success story.
Annual sales of nearly 180 million euros, close to one million active customers, over 400 employees, online shops in ten European countries and direct shipment from Germany to China – the corporate figures speak for themselves: windeln.de has become a firmly established entity in eCommerce since its founding in 2010.
Co-founder Alexander Brand calmly and coolly filled us in on the company’s history. Starting a company was nothing new for him, since he had already launched his first company back in 1999. He and co-founder Konstantin Urban had previous experience with venture capital and were also part of a strong network in Munich. So what were the biggest challenges over the past few years?
“Actually, every year is extremely challenging. It’s like playing soccer. The next game is always the most difficult. As a founder, I think a person always has to be somewhat paranoid. I think to myself every three months: now we’re through.”
Brand describes himself as analytical, and we can only agree. In contrast, Konstantin Urban is more of a gut-instinct type of guy: “We complement each other well.”
Urban and Brand met through a common friend. Both were ready to start a new business. With the American mail-order business for children’s products diapers.com, they quickly had their prototype and business model: customers remain loyal to the shop by regularly purchasing baby products such as diapers and food. Additional items such as strollers, car seats and toys increase the margin. It’s a market niche, said Brand:
“This kind of combination did not exist in Germany until we started.”
It might not be sexy, but it certainly seems to be successful.
Pacifiers – made in Germany
After sales had doubled in previous years, the company grew by three-quarters in 2015. For the coming year, the company has set its sights on 50% additional growth. One of their growth drivers: direct shipment of German products to China. The new area of business resulted after analyzing order data:
“We noticed that quite a large number of customers with Chinese names were ordering from us. A large portion of these orders were being sent to the same 20 addresses in Germany. They were freight forwarders who were sending the products from German online shops to Chinese customers. We now ship directly to China.”
The reason: Many middle-class Chinese trust German products more than their local products.
“Our Chinese customers particularly like to order food and products that stand for German quality, such as NUK pacifiers.”
In response to the surge of demand from the Far East, windeln.de translated its website into Chinese. A special team in the Munich office takes care of the Chinese business segment. Due to the time difference, a customer service operation was set up in Vietnam. In contrast to Europe, customers can also pay through the Chinese service Alipay.
Is it the startup genes?
Last year, the company also expanded to other European countries – partly through acquisitions, and partly through independently developed branches. How did the company know when the time was right to expand internationally? In principle, it had a lot to do with gut instinct, explained Brand, and continued:
“What’s important is that the existing business and processes work so well that they no longer demand your full attention.”
Even though the company is certainly no longer a startup and does not want to be referred to as such, the way they make decisions feels flexible, spontaneous and far from set in stone. The startup mentality seems to be a lasting part of the company’s DNA. It is also fitting that Brand is still active in the startup scene. He recently joined Catchys, a second-hand metasearch engine, as an investor and business angel.
“I limit my investments to eCommerce. That is the area where I have the necessary know-how. Biotech, for instance, would not be for me since I do not know my way around that field.”
We are excited to see how things develop and will have an eye on the Munich-based online shop and its founders.