Why do e-commerce companies struggle to be profitable? A summary of the top 30 Swedish e-commerce companies

Over the coming months, I will write about the e-commerce industry in Sweden and in other countries, with the goal of identifying recipes for success. First, I want to take a look at a general problem in e-commerce: low or no profitability.

The Internet has transformed our purchasing behaviors. Last year global revenue from online sources was close to $3 trillion, and that number is expected to be even higher 2019. Online sales now account for more than 15% of total retail revenues. (Source: Digital Commerce 360)

However, even though global e-commerce is growing at an unprecedented pace, the industry still faces significant challenges, specifically related to profitability. At least among Swedish e-commerce companies, many still struggle to establish a profitable business model.

After analyzing this, I have created a hypothesis from a consumer and marketing perspective: E-commerce companies tend to spend too much of their revenue on fast converting online marketing activities. 

While there may be other reasons that profitability is weak in this industry (the type of product and the margins on that product also play a notable role), as earlier mentioned, I have tried to find patterns from a marketing and consumer behavior perspective. 

Here are three conclusions:

1. There is too much focus on fast conversion and too little focus on branding and PR.
2. There is too little added value in the online store, causing the focus to shift to price and making it easy to switch to a competitor that’s only one click away.
3. There is a lack of analytics and BI teams in almost all e-commerce companies.

1. Conversion vs. Branding and PR 

Often, these e-commerce companies are working too hard on performance marketing and underestimate the value of branding, PR, and positioning. One example is hard conversion, where companies work with influencers that offer their followers 10% on their next order. Another is email campaigns, with discount codes and free shipping, etc. If the adstock (the accumulated and quantified brand value over time) is weak, performance marketing campaigns tend to become more and more expensive per conversion over time. 

Typically, since these companies are born and operate in a digital world, they tend to look at the results of the online campaigns' instant effects. They do not spend that much on offline and branding activities since, in their world, it is impossible to value and measure the often spread out effect of awareness and branding campaigns. The industry needs to have a better understanding of the real ROI of their marketing activities, taking short, mid and long-term effects into account.

 2. Too little added value

Consumers can effortlessly leave your site and buy that pair of jeans on a competitor's website.

E-commerce companies are not adding enough extra value to their clients to convince them to pick them as a vendor over the competitors. (If you have suggestions of the best value-added things that outstanding e-commerce companies are doing, please let me know in the comment section.)

3. Lack of analytics or BI teams

Very few of the top 30 Swedish e-commerce companies work with BI or analytics. Either they are entirely missing an analytics team or only have 1-2 employees that work with this. Without analytics, how can the industry optimize? How do they know what’s working and what’s not?

The only explanation has to be that they are only looking at the instant effects of sales and marketing. As such, they cannot see the time lag or the distributed effects over time. Daniel Wellington is a great exception. From a simple LinkedIn search, you can see that they have 25+ employees working within BI and analytics.

Let's take a closer look at the top 30 e-commerce and how they are performing

E-commerce overall is growing, and we can see how it’s spread out over many different segments. If we take a closer look at the top 30 e-commerce companies and the segments they are established in, we find most companies within Fashion and lifestyle. We also find successful companies within the Electronics segment.

The top 30 e-commerce companies had during 2018 an average profitability of (0,84%) compared to 2017, where the top 30 had an average profitability of (1,44%). 

If we look at the growth of the top 30 companies from 2017-2018 we can see that the top 30 also had average annual revenue growth of 20% with Fashion and lifestyle leading by 26,06% in average growth (excluding the mixed segment “other”).

Takeaways:

• The top 30 e-commerce companies had, during 2018, an average profitability of (0,84%) compared to 2017, where the top 30 had an average profitability of (1,44%). 

Now benchmark these figures towards the US retail sector's data, which has an average profitability between (0,5-3,5%).

• The median profitability for the top 30 during 2018 was at (1,36%) 
• The top 30 also had an average annual revenue growth of 20%. 

Let us take a closer look at the top 30 companies (by revenue)

1. Dustin

CEO: Thomas Ekman, has been employed since the beginning of 2018. He has an impressive experience within leading big corporations such as Tele 2 and Cab online.

CFO: Johan Karlsson, has been with Dustin since 2009 and has a broad international background where he previously been working with Unilever Portugal and Netherlands, also for other brands such as TechData and ACO. 

Head of Group CX Marketing: Caroline Peterson-Ullstrand, has been with Dustin since 2012. She has proven experience in developing, implementing, and managing customer experience programs, customer- and brand strategies at various companies such as Telenor, Vodafone, and Canal digital. 

Head of Business Development & Analytics: Louise H?llje Marquart, has been with Dustin since 2018. Louise has many years of experience of being a partner and a director at a strategy consulting firm.

Dustin is one of the leading re-sellers of IT-products and additional services in the Nordics. It was founded in 1984, by Bo Lundevall and his wife Ulla Lundevall in a zoo-shop in Stockholm. Dustin started off by selling colored floppy disks over mail orders and started selling IT and technology products over the Internet in 1995. 

In 2004 Dustin home was founded, which specializes in selling products to home users.

Dustin was acquired by the private equity company Altor Equity Partners in 2006. After that, Dustin started to do allot of mergers and acquisitions when they finally in the year 2015 got listed on Nasdaq Stockholm. The company, which is primarily active in the Nordics, last year acquired Dutch Vince Groep resulting in Dustin getting also establish in the Netherlands.

Dustin is above the average profitability of the top 30 e-commerce companies in Sweden and has an excellent record of being profitable for the past 10 years.  

2. Boozt

CEO: Harald Hermansson from Denmark has been with Boozt since 2010 and has previously been working as CEO for different agencies.

CFO: Allan Junge-Jensen has been with Boozt since 2011. Allan was part of the team that relaunched Boozt in 2011 and thereby founding Boozt.com as a multi-brand platform and the company as it is known today.

Marketing Director: Mads Neble, also from Denmark, has been with the Boozt since 2013. Previously been working as Director, CRM & online. Since October 2019 he also has the responsibility for marketing.

Online Marketing Director: Jesper Jensen, has been with Boozt since 2012. Having more than 7 years of online marketing experience within Boozt, Jesper has also previously been working at Telenor Denmark.

Boozt was founded in 2007 and was going to be a platform for other retailers to sell their products online. Boozts' first customer was Bestseller. In the year 2010, bestseller decided to run their own e-commerce store. Boozt then lost 98% of its revenue and had to change direction and become e-commerce within fashion and lifestyle. Since that transformation of becoming their own brand, they have had significant growth. Today Boozt is listed at Nasdaq Stockholm and has at the time of writing this article value of 404 MUSD. 

The company headquarter is located in Malm? and their storage in ?ngelholm. 

The mid-term EBIT guidance is above 6% for Boozt, according to the financial reporting at Booztfashion.com.

Boozt recently managed to flip their profitability from negative to positive (2,61%), which is an impressive achievement and also clearly over the average of the top 30 companies. 

3. Ellos

CEO: Hans Ohlsson has been with Ellos since January 2013. Hans has a background in the e-commerce and fashion- and home furnishing industry (mainly from PPR, Kering, Redcats, and Ellos).

CFO: Johan Stigson has been with Ellos since April 2013. Before Johan worked as a CFO at Ellos, he was employed as a corporate controller at Redcats. He also managed to do 42 km cross-country skiing at 3:33:35. 

CMO: Mathias Ekstr?m has been with Ellos since May 2012. Before taking the role of CMO, he was an e-commerce director at Ellos and also employed at Redcat. Mathias is also a Leicester fan (football club). 

The third-biggest e-commerce company in Sweden is ELLOS AB. Founded in 1947, Ellos – with Head Office in Bor?s, Sweden – is present in all countries in the Nordic region and has brands such as Jotex, Stayhard, and Homeroom under its umbrella. The company is an example of how to face a digital transformation and master it. Ellos went from over 60 + years working with catalogue sales to be at the top of the e-commerce industry. At the end of 2014, Ellos sent out their last big catalogue.

About 50 percent of the sales is in Sweden, and the rest is distributed between the other Nordic countries. Ellos offers both its own and external brands. Ellos’ brands include Agnes & Cecilia, áhkká, Ellos, Sense of Karma, and Sons of Owen and around 700+ external brands.

Ellos has a strong history of being profitable, and are quite ahead of the average profitability of the top 30. They also managed to increase their profitability from 2017-2018. 

According to Linkedin, Ellos does not have any person responsible for analytics or business intelligence. 

4. Apotea

CEO: P?r Sv?rdson, who also is the founder of Adlibris (number five on the list), has earlier also been called the Zlatan Ibrahimovic of e-commerce. Besides being an entrepreneur, P?r is also a big fan of sailing and has won gold on the Swedish championship in sailing (Farr 30).

CFO: Camilla Günesli, together with P?r, and Sofia, worked previously at Adlibris.

CMO: Sofia Modig, has been employed as a CMO for Apotea since eight years back and has also been recognized as Swedens best CMO 2019, by the resumé magazine.  

The forth biggest-e-commerce company is Apotea, also being the leader of its category, e-commerce pharmacy. The company was founded in 2003 but was in the year 2011 taken over by the entrepreneur P?r Sv?rdson (CEO today). P?r managed to turn the business model around and placed Apotea on the e-commerce map. 

Apotea is still growing at a high pace (35%) from 2017-2018 and has managed to keep the company profitable. 

According to LinkedIn, Apotea doesn't have an analytics team or a BI team.

5. Adlibris

CEO: Jonas Karlén, who comes from being a CEO at Linas Matkasse, will take the leading position as a CEO starting in December 2019. Jonas has a high competence within consumer products, supply chain, and digital solutions, which will be needed in his new role. 

CFO: Marika Leclerq has been employed since mars 2019 and has a background at leading finance positions within Selecta, K-rauta, HSB Omsorg, and other big brands. 

CMO: Sofia S?derqvist has been with Adlibris since 2015. Sofia is also, since 2017, CEO at k?ketsfavoriter, which is a part of the Adlibris group.

Head Of Business Intelligence & Data Science (Consultant): Gustav Eklange has been working for Adlibris since 2015 but is an external consultant.

Adlibris is the fifth biggest e-commerce company. In 2018 their investments within logistics and supply chain slowed them down, which is the likely main reason for the extreme profit loss 2018, -6,56%

The investments are due to Adlibirs strategic plan of developing to be more than just an e-commerce that sells books. They want to grow more in the lifestyle segment (furniture, beauty products, and jewelry). 

Adlibris is significantly below the average profitability of the top 30 e-commerce companies in Sweden.

6. CDON

CEO: Kristoffer Valiharju has been with CDON since 2017. Kristoffer was previously working as COO at CDON. 

CFO: Niclas Szieger has been with CDON since 2017 and has previously been working as Head of Business control at CDON. Besides Crunching figures, Niclas has had a talent for Golf and earlier represented Flommens Golfklubb. 

CMO: Henrik Jarl has been with CDON since April 2019, and have been working with positioning the launch of CDON Marketplace (see below). Henrik is also known for his career at Sony Mobile and his way of challenging the apple watch with Kronaby. 

The number six on the list is CDON, who also is the Nordics biggest warehouse.  

CDON is getting more prominent in the area they call the CDON marketplace, which is an efficient sales channel for external companies to sell their products. As an external company, you can connect yourself to the market and reach a broader target group — a bit like Amazon. According to CDON:s website, the marketplace has a reach of 100 million website visitors per year. They also have the second-most followers on facebook among the top 30 (600k + followers). 

According to LinkedIn, CDON doesn't have an analytics team or a BI team.

7. Jollyroom

CEO: Ole Sauar has been with Jollyroom since the start and got awarded as NXT Nordic profile of the year (2019). Ole has previously been working as CEO at Komplett Sweden & Denmark. 

CFO: Daniel Fischer has been with Jollyroom since 2016. Daniel is well known for working with global brands such as Johnson & Johnson, Whirlpool, and Pon Equipment. 

Jollyrom was founded in 2010 and is number seven on the list. The CEO (Olle Sauar) has been with the company since the start and was one of the first ones in Sweden to start e-commerce with a focus on selling kids- and baby products. Today they are established in Sweden, Denmark, Finland, and Germany and have around 450 employees.  

Their goal now is to reach 200 MUSD in revenue by the year 2021 by being the parents' one-stop-shop when they need kids- & baby products. Jollyroom is also currently building a new storage and warehouse on 77 000 square meters that will be ready by the end of 2020. 

According to LinkedIn, Jollyroom doesn't have an analytics team or a BI team.

8. Home Furnishing Nordic

CEO: Christian Eriksson has been with HFN since 2014. He has previously been in leading positions (CEO, COO, business controller, etc.) at CDON. 

Finance Manager: Fredrik Landbring, has been with HFN since 2016 and has previously been working for New Yorker & EY.

Marketing Manager: Emelie Persson has been employed since 2016 and has previously been working at Artexis Easyfair. 

Number eight on this list is Home Furnishing Nordic AB, being one of the biggest e-commerces within furniture and home interiors. Home Furnishing Nordic is part of the Bygghemma Group First AB mentioned above.

Home Furnishing Nordic has a couple of different brands under its umbrella, brands such as Trademax, Chili, Furniturebox, Kodin1, and We got.

The company has an excellent track record of being profitable (since 2013) but reported a negative result in 2018. 

According to LinkedIn, Home Furnishing Group doesn’t have an analytics team or a BI team.

9. Nelly

CEO: Marcus Lindqvist is the CEO of Qliro AB (owner of Nelly.com) and is currently CEO for Nelly.com since the previous one choose to leave the company (see below).

CFO: John Afzelius, who started in August 2019, previously worked as a CFO at a listed company on First North, called Transtema.

Head Of Brand & Marketing: Tuss Odin Ekman has been with Nelly.com since 2018 and previously worked for Procter & Gamble (P&G). 

Founded in 2003 by Jarno, Nelly.com is number nine on the list. Nelly.com got acquired by Qliro in 2007. Qliro is the Nordic leader in digital commerce and related financial services. 

Since then, Nelly.com has expanded, and the range has been broadened from lingerie and swimwear for women to a broader scope of clothing, accessories, beauty products, and sportswear.

The men's department at Nelly.com was spun off in 2014 to form the men's store, NLY Man, which broaden their total addressable market (since they now have men as a target group also). 

Recently the CEO (Anna Ullman Sersé) choose to step down due to family reasons, and Qliros CEO Marcus Lindqvist took over. Marcus said in an interview that he would focus on growing the profitability up again. Although that Nelly’s profitability has dropped from 2017, the company is still over the average of the top 30 e-commerce.

According to LinkedIn, Nelly doesn’t have an analytics team or a BI team.

10. Mathem

CEO: Johan Lagercrantz, who starts at Mathem in December, was previously working as Managing director at Randstad. 

CFO: Therese Elmqvist, has been with Mathem since 2016 and came from the Japanese tobacco industry, where she operated as Finance Manager for JTI. Therese has had a big responsibility and taken a new leading position at Mathem since the founder and current CEO stepped down (see below).

CRO: Johan Littorin, who started at Mathem in June 2019, has a long history of working within the telecom industry, recently as Head of Vimla (CEO). 

Chief of Marketing Analytics: Ann- Sofie Sandstr?m has been with Mathem since 2015 and has had a significant career where she previously been working with analytics/Bi at Mcdonald's corporation.  

Mathem is the tenth biggest e-commerce company in Sweden. The company was founded at the end of 2006 by Tomas Kullberg. Tomas himself faced the problem of not having the time to go grocery shopping and wanted to create a solution for it. 

Mathem has and has had a negative profitability for an extended period. One critical reason can be that the segment of online groceries has not reached its potential yet. Statistics are showing that 1,6% of the total grocery sales (in Sweden) come from online grocery e-commerce. Despite that, Mathem has a revenue of 135 (MUSD), which is impressive since the market is far from its full potential. 

The founder and previous CEO (Tomas Kullberg) has stepped down, and Johan Lagercrantz will be the new CEO from December.

11. Bygghemma.se

CEO (Group level): Martin Edblad, who has been with Bygghemma since 2013, was the previous CFO of the group. 

CFO (Group level): Adam Schatz, who started in April 2018, previously worked as CFO at Axiel Group. Adam has a history of working with investment banking and venture capital.   

CDO (Group level): Alexander Ljung has been working with Bygghemma Group since 2010 and has been able to climb his way to the C-suit position. Head of Online Sales and Group online Manager is his hirs previous roles, within the group.

Bygghemma was founded in 2006 by Patrik Rees & Anders Falk. The number eleven on the list is an e-commerce that sells construction and fix-it-yourself concept. The company has grown and is operating in the whole Nordics region. In March 2018, Bygehemma Group First AB (the owner of Bygghemma.se) got listed on NASDAQ Stockholm Midcap and has at the time of writing this article value of 570 MUSD. 

They did this by establishing their brand in Finland and Denmark but also by a few acquisitions. 

The numbers presented above are for Bygghemma.se (Sweden), not Bygghemma Group First AB, listed on NASDAQ Stockholm. 

According to LinkedIn, Bygghemma doesn’t have an analytics team or a BI team in Sweden, but they have it for Byghhemma Finland and its lead by Juha Saarinen.

12. Komplett

CEO: Lars Olav who has been with Komplett since 2018, got recruited from ORKLA. Lars has worked with great brands such as Findus, Ringnes, and Procter and Gamble (P&G) where he has been working within the commercial parts of the companies. 

CFO/COO: Live Haukvik, has been with Komplett since 2011. Live has during the past 15 years been a member of the ten different boards at various companies. She also has experience of being a CEO (@Goodtech) and CFO (@Tandbergdata).

Digital Marketing Director: ?ystein Vinje has been with Komplett since 2011 and has had a terrific career at the company. He started as a product manager and later in 2016he started to work as Online Performance Specialist and today he leads the team of digital marketers for the various brands at Komplett.

Number 12 on the list is Komplett, a Norwegian group founded in 1996. They operate throughout Denmark, Sweden, and Norway. During 2018 Komplett backed out of Finland, where they stated that the market in Finland is different from the competition perspective and that online purchases often go across the borders.  

The central part of their product assortment is computers and components, but they have also expanded to include photo products, Hi-Fi, TV, gaming, and white goods.

According to LinkedIn, Komplett has two employees working with sales- and marketing analytics.

13.Cellbes

CEO: Charlotte Nordén, has been the CEO since 2016 and has a long experience of being CEO at various companies such as Joy Shop och Desam Fashion group.

CFO: Tony Olofsson, has been the group CFO since the middle of 2018. He was previously working at the Consortio Fashion Group, where he was a CFO for 21 years. 

CMO: Kristina Hermansson, has been working for the company since the beginning of 2017. She is well known for her campaign “model for a day” where Cellbes tour around Sweden and let women around Sweden to try out the job as a model for a day. The campaign goes under the hashtag (#vi?rcellbes) and has also developt to be an online series.

Cellbes has a long history that starts already from 1954. A couple (Gunvor Hultgren and her husband Bengt), received 1000 Swedish crowns in wedding gift and started there post-order company called Cellbes. At first, they only had one article that they sold. In the year 1964, they made their first own catalog, back then in black and white. After half a century, the couple decided to sell their life's work. Halen Postorder AB acquired Cellbes, and Consortio Invest AB later acquired Halen & Celles. Today the company operates in nine European companies.  

Despite that they dropped some of their revenue, Cellbes is significantly above the average profitability of the top 30 e-commerce companies.

According to LinkedIn, Cellbes doesn’t have analytics- or a BI team.

14. Sportamore

CEO: Johan Ryding, who also is the founder, has naturally been with the company since the start in 2009. 

CFO: Sabina Lerne has been employed since 2016, and has previously been leading the finance team of Nike in Sweden.

CMO: Johan Paulsen J?rnliden has been with Sportamore since the beginning of 2019. Johan previously worked as a CMO at Elgiganten and has also played soccer with K?rrtorps IK. 

Number 14 on the list is Sportamore, founded in 2009 by Johan Ryding (CEO), Joakim Friedman (Deputy CEO), and Jan Friedman (father to Joakim). 

The company is since 2015 listed in NASDAQ Stockholm. They recently became profitable, moving from negative (-2,09%) to be under the average of the top 30 e-commerce companies in Sweden, but still a positive figure (0,33%). They managed to achieve a growth of 24% during 2017-2018.  

According to LinkedIn, Sportamore doesn’t have an analytics team or a BI team.

15. Lyko

CEO: Rickard Lyko, with a background of economics both in Sweden and outside of Sweden, had his aim on Wall Street. Despite the Wall Street dream, Richard 2008 decided to go all-in on his parent's e-commerce company and takes the leading position as CEO of Lyko. 

CFO: Pontus Andersson, started in October 2019. He is the former CFO of Nelly.com and has been working within the Qliro Group.

CMO: Kalle Eliasson has been with Lyko since 2017 and has more than 10+ years plus of leading marketing departments. He previously was working within the telecom industry where he hade the position as VP Marketing at the company 3 in Sweden. 

Number 15 is Lyko. This company has a long family history. Starting in 1945, Frans Lyko came to the region Dalarna after spending six years at a concentration camp in Germany. In 1952 Frans opens a hairdresser salon in the city of Vansbro. Stefan Lyko, (Frans Lyko’s son), later in 1971 opens up another hairdresser in the city dala-j?rna. 

2003, Stefan launches the website Lyko.se. The initial idea was to show his salon products. After high demand and requests for the products, Stefan started to send out his products by C.O.D (Cash on delivery). 2005 was the year Lyko developed to be e-commerce, where they launched an online payment solutions for their clients. 

Lyko is below the average profitability of the top 30 e-commerce companies.

According to LinkedIn, Lyko doesn’t have analytics- or a BI team.

16. Pierce AB

CEO: Henrik Zadig has been with Pierce since 2016. He has a successful track record of driving growth in international companies. He led the full P&L (profit & loss) at Staples (his previous employer) and returned their $500M European Online business to profit growth again. Before that, he led the American Express global loyalty business to hyper-grow from $5Bn to $28Bn in annual turnover. Ex McKinsey consultant.

CFO: Tomas Ljungl?f, has been with Pierce since 2018. Tomas got recruited due to his experience and competence in working with public companies and venture capital owned growth companies.

Sales & Marketing Director: Mattias Nahlin has been with Pierce since 2016. Besides his talent in sales and marketing, it seems like Mattias has a natural ability also for languages speaking, German Swedish, and English. Mattias has also been working as a business developer at Middagsfrid and CEO for the companies international expansion.

Number 16 is Pierce AB, an e-commerce motorsports retailer, with operations throughout Europe. Pierce has three brands under its umbrella: 24MX (focus on Motorcross), XLmoto (focuses on on-road motorcycles), and sledstore (focuses on snowmobile enthusiasts). 

Pierce has also been profitable since they founded the company 2009, which is not that common within the e-commerce industry. They had a vital growth last year at 46%. 

According to LinkedIn, Pierce has two employees working with data science and also two employes working with Business Intelligence.  

17. Inet AB

CEO: Erik Wickman has been with Inet since the year 2000. He has had different roles within the company, starting off as Marketing Manager, to Purchasing Manager, and today the leader of the company. 

CFO: Niklas Lingblom, who has been with Inet since September 2019, has previously been working with companies such as PowerCell, Exertis CapTech, and EY. 

Sales & Marketing Director: Johan Wahlberg, has been with Inet since 2008. He has had different roles at the company. Johan started as a Store Manager in sisj?n and has since then developed to sales & marketing director.

Founded in the year 2000, and number 17 on the list is Inet AB. They opened their first store on Ring?n and 2004 they started the first webshop. 2018 and 2019 they won the title as "e-store of the year from" the site prisjakt.se and also, during 2019, they received the title as "e-shopper of the year" - from pricerunner.

The company's leading target group is gaming and technology enthusiasts, and the goal is to always be the first with the latest in combination with delivering a high level of service in all channels. Today they are 95+ employees.

According to LinkedIn, Inet doesn’t have an analytics team or a BI team.

18. NA-KD

CEO: Jarno Vanhatapio is a well-known e-commerce entrepreneur since he founded Nelly.com and now NA-KD.com. He has cracked the code of how to position your brand towards generation Z (born 1995 or later).

CFO: Patrik Lampret, has been with NA-KD since 2015, and have had previously worked at Redcats and other consultancy companies such as Deloitte. 

Director of Business Intelligence: ?a?r? Emre Korkmaz has been employed with NA-KD since march 2019 and operates with his Bi team from Istanbul in Turkey (also from Gothenburg in Sweden).  

Chief Growth Officer: Bj?rn Bergstr?m, has been with NA-KD since April 2018. Recently, in October 2019, Bj?rn joined the rest of the C-suite, leaving his previous role within the company as Head of Expansion.  

NA-KD is already number 18, even though it was founded as late as 2015. With a strong gameplan within social media marketing, they have already passed 2,1 million followers on Instagram, and 600 K + on Facebook. NA-KD has also had tremendous growth where the revenue almost doubled in 2018 compared to 2017.   

Their extreme loss of 17% comes naturally due to being an early-stage company investing everything in growth.  

19. Royal Design

CEO: Magnus Pettersson who is one of the Swedish e-commerce pioners has been working with big brands such as ONOFF, Media Markt, Komplett, etc.  

CFO: Joakim Hillborg, has been with Royal Design since 2017. He has previously been working for Media Markt as Head Of Controlling & Pricing.  

Head of digital marketing: Ida Lindén, has been with Royal Design since the beginning of 2018. Ida was previously working for (Lekmer), which is a part of Babyshop Group.    

Number 19 on the list is Royal Design. Founded in the year 1999, this year (2019), Royal Design celebrates its 20th anniversary. The company was founded by Hans Bengtsson and Andreas Ekberg, who were ahead of their time. At the start, Royal Design only operated in the US, due to the reason that the Swedish e-commerce was not fully developed. Today the company operates in 13 countries and has around 200 employees.

During 2017 the venture capitals, Eequity and Verdance, (who already owned prominently 70 percent) acquired 25 percent of the companies from the founder duo. 

The company’s profitability is significantly under the average of the top 30 companies. 

According to LinkedIn, Royal Design doesn’t have analytics- or a BI team.

20. Footway

CEO: Daniel Mühlbach, who is the founder and CEO of Footway, founded the company in 2019. Daniel is one of the entrepreneurs that in an early stage, embraced the e-commerce business model. Already in 1999, he founded Lensway together with his friend Herman Ofenb?ck. He also sits on the board of directors at Byggmax and Eterum.

Development & Marketing: Mikael Wallgren has been with footway since 2015. He has an IT background and has and decree in game development and computer programing. 

Number 20 on the list is Footway. The company was founded in 2010 by the current CEO Daniel Mulback. Footway had last year a substantial growth of 50%, and recently also entered 12 new markets – which makes them operate in 23 markets in total. In 2014 Footway acquired 100% of Brandos (e-commerce company within fashion), which generated a more scalable economic for Footway. 

Footway is listed on the First North since 2015, and at the time of writing this article, they are valued at 132 MUSD.

According to LinkedIn, Footway doesn’t have analytics- or a BI team.

21. Bokus.com

CEO (Akademihandeln & Bokus): Maria Edsman, has been the CEO since the first quarter of 2018 for both companies and is also a Board Member at Rusta. She was previously working as Sales Director for akademibokhandeln, but due to high delivered results, she stepped up to the leading position as CEO. 

Marketing Director (Akademihandeln & Bokus): Cecilia Helsing, has been the Marketing Director for Akademebokhandeln (owner of Bokus) since 2010. Cecilia is well known for her contribution to the company's membership journey, increasing it from 0 to 2 million members. 

Founded in the year 1997, Bokus.com was among the first early-stage e-commerce:s in Sweden. During 2005 the company took over Akademibokhandels internet sales and also, therefore, rebranded asAkademibokhandeln Bokus AB. Since 2014 Akadmbokhandeln is the owner of Bokus. 

2018 Bokus launched Bokus play, which is an ebook subscription service. 

The company has been profitable since 2013 and does not grow that much. Year after year, they remain almost the same growth pace and positive profitability between 2-7%. The numbers presented are for bokus.com; it does not include Akademibokhandels figures. 

The company is over the average profitability of the top 30 e-commerce in Sweden. 

According to LinkedIn, Bokus doesn’t have analytics- or a BI team.

22. InkClub (Ipiccolo AB)

CEO: Martin Benckert, who was working as a Sales Director for InkClub between 2004-2010, left the company for a while but then came back. After his sales role, Martin became CEO at Skjortfabriken and left the position after five years. He then, during 2016, came back to InkClub but this time as the CEO. 

CFO: Jelena Slomo has been with InkClub since 2012. She started as an economist and then responsible for accounting, and since 2017, she has the CFO- role. 

Head Of Media/Marketing: Martina Malmvall ha been working at InkClubs since 2011 and has had various roles within the company. She entered her role as Head of Media/marketing at the beginning of 2019.  

InkClub was founded in the year 2002 as an e-commerce company selling ink cartridge for printers. Today the company has over 5 million customers around ten countries, and they are beside ink cartridge, also selling laser toners, accessories, and other consumables.

Inkclub is the second most profitable (in percentage) among the top 30 e-commerce companies. The company has an impressive history of being profitable, not going below 5% in profitability since 2009.

According to LinkedIn, InkClub doesn’t have analytics- or a BI team.

23. Linas Matkasse

Acting CEO: Walker Kinman has been with the company since the beginning of 2018. Walker recently (august 2019) stepped up from the CFO-roll to the acting CEO- role. He did a tremendous job in his CFO position by delivering an EBITDA-margin on 8% during the first half of 2019. 

Senior VP Commercial: Annika Jerveland has been with Linas Matkasse since 2014. She has had different roles in the company since she started in 2015. Starting as CMO and then also took the responsibilities for sales & hr.

Number 23 on the list is Linas Matkasse. They are founded in 2008 by the siblings Niklas Aronsson and Lina Geb?ck. Unlikely other food e-commerces, Linas Matkasse, found a niche and profiles themself as ready-to-cook dinner service. Their unique selling point is to put together a recipe and sell it along with all of the ingredients. 

Since the start in 2008, Linas Matkasse has for the first time, dropped some of their revenue and have been reporting a negative profit. They have a history of being profitable and reaching a decent growth on a year-to-year basis. Previously Linas Matkasse has been alone in the space of e-commerce groceries and food categories that are profitable.

According to LinkedIn, Linas Matkasse have one employee working with analytics.  

24. Outnorth

CEO: Harald Ennen, who has been working at Outnorth since 2018 have more than 12 years of experience of being a CEO, previously leading NetOnNet and Order Nordic. 

CFO: Kajsa Carlén has been working for the company since 2016. She started as CFO then became the acting CEO to then go back to the CFO role. Kajsa is highly competent within economic and has an impressive experience of leading different financial teams for more than 20+ years.

Head of Online Marketing: Henrik Wilnersson who has been with Outnorth since 2011, was previously working as Online Marketing Manager. 

Outnorth, being number 24 on the list, was founded in 2005 by the brothers, Stefan- and Per Gustafsson. Today they are the leading e-commerce within camp- & outdoor life in the Nordics. Outnorth primarily operates in the Nordic region, but they are also established in Germany 

At the end of 2018, Outnorth merged with Fjellesport, and recently, the company did a merge with its competitor, Tinderberg. 

Unfortunately, the company is below the average profitability of the top 30 e-commerce companies' in Sweden.  

According to LinkedIn, Outnorth doesn’t have analytics- or a BI team.

25. Sk?nskabyggvaror.se

CEO: Oscar Tj?rnberg who has been with Sk?nskabyggvaror since 2017 have previously had various leading positions within the e-commerce industry. From the telecom industry as head of online, he moved to Inkclub, where he was a Sales and marketing director to CEO at Lekmer and today the CEO at sk?nskabyggvaror. 

CFO: Hanna Strufve, who started in March 2019, has 10+ years of experience within leading different finance departments at various companies. 

CMO: Anna Stighagen van Alphen who started in April 2018, came from a long career at EF, a private international education company.

Sk?nskabyggvaror was founded in 1965 by B?rje Blomqvist. In the beginning, Bj?rn sold his products over the phone and by setting up inspiration-stores. The company is a construction retail-focused e-commerce where they sell everything from doors to Jazzucis.

During 2012 the company acquired the Norwegian company Gr?nt Fokus, and during 2016 they acquired the Danish company Pavilion. Finally, in 2016, Byggmax Group acquired Sk?nskabyggvaror.

The company has reached the milestone of accumulated having more than 1 million customers. B?rje, the founder himself, is over 80+ years and does not have any ownership in the company anymore since he sold the majority of his shares to Polaris Private Equity in 2012. 

According to LinkedIn, Sk?nska Byggvaror has one employee working as a financial system analyst.

26. Snusbolaget

CEO (Haypp Group): Gavin O′Dowd has been working for the group since 2017 and have had 10+ years of experience from the tobacco industry, previously he worked at British American Tobacco. 

CFO (Haypp Group): Svante Andersson has been working with the group since 2017 and has previously been working as CFO for Nordic Etail. 

CCO (Haypp Group): Anders Signell, has been with the company since the end of 2018. He has many years of experience from driving growth and profitability in international environments. Anders was previously the CEO of Delivery Hero which has OnlinePizza, SLM, and Valk Fleet under its umbrella.  

Head of Data and Insights (Haypp Group): Robin Ljungl?f started in September 2016. He recently step up from his positions at Snusbolaget as data and insight manager and is now working on a group level.  

Snusbolaget is a tobacco e-commerce company that is part of a group called haypp.com. Today the Haypp Group consists of eight e-commerce brands, and their core business is to offer people around the world a safer form of nicotine, beeing what we in Sweden call Snus. Unlike smoking, you have so-called snus under your lip instead of smoking tobacco. 

Snusbolaget itself was founded ten years ago by two dedicate ”snusare”, Linus and Henrik, who asked themselves why no one sold snus online. They also run Snusjournalen.se.

Snusbolaget is above the average of the top 30 e-commerce companies in Sweden and has managed to turn around their profitability going from negative to positive.

27. Desenio

CEO: Fredrik Palm has been with Desenio since the middle of 2016 and has a track record of taking founder-led companies to the next level and creating fast growth. Altogether he has more than 15 years of experience as CEO at various companies.  

CFO: Cecilia Wenstr?m, has been with Desenio since 2018 and came from Linas Matkasse where she held the position as Head of Group Business Control. Cecilia has previous experience from Telenor, EQT and EY.  

CMO: Peter M?ller Nee has been with the company since the middle of 2017. Peter is a mathematical marketer and has 10+ years of experience within sales & marketing working at various companies such as Brandos, Footway, L?nsf?rs?kringar, and ATG. 

Founded in 2010 by Helena- and Martin Blomqvist, Desenio started as selling paintings. It, later on, it showed that the most popular products were the posters, and today they are an art print design webstore. From that point, they have managed to grow exponentially. Today they boast an online presence in 33 countries and are steadily breaking into new markets. Which makes them the market leader in posters and frames online in the Nordics, 

During 2016 the venture capital, Verdane, acquired 50% of the shares in Desenio. 

Desenio is the most profitable e-commerce company among the top 30 and managed, at the same time, to keep up with at a tremendous growth pace. During 2018, Desenio had a growth ratio of 80% and had a profitability of almost 30%, which is outstanding numbers within the industry. 

According to linkedin, Desenio doesn’t have analytics- or a BI team.

28. Lekmer

CEO (Babyshop group): Marcus Tagesson, who also is the co-founder of Babyshop, has been the CEO since the start in 2006. Besides traveling and being with his family Marcus also is an animal friend. He is behind the initiative where the group is sponsoring Wildhood Foundation in Africa, which works with endangered animals.

CMO (Babyshop group): Jonas Jutmar, has been employed since 2015 despite his career as a marketing professional, Jonas has also been a part of the Swedish Marines.

Head of Marketing (Babyshop group): Johan Loman recently started in October 2019. He has previously been working as Marketing Director for Stutterheim raincoats. 

Number 28 on the list was founded in the year 2006 by Niklas Jarl. Lekmers niche is in selling kids- and baby products. Niklas was the previous CEO, but after ten years, in 2016, he decided to step down. Qliro Group, who by that time owned Lekmer, recently (in 2017), sold it to Babyshop.  

Lekmer is below the average of the top 30 e-commerce companies.

According to linkedin, Lekmer doesn’t have analytics- or a BI team.

29. Carpetvista/Rugvista

CEO: Michael Lindskog, recently (October 2019) started as Chief Executive Officer at Carpetvista. He has previously been working with Digital asset management where he was the co-founder and the CEO for Waizer AB. Michael will focus on accelerating growth in CarpetVista and fully leveraging the platform that has been established in the company

CFO: Annika Lundberg, has been with Carpetvista since 2017. She has previously been working as CFO for Kjell & Company and MuliQ.

CMO: Ulrika Klinkert, has been with Carpetvista since 2017. Ulrika is a strategic marketer with a passion for retail and brand building in the digital arena.

Carpetvista being number 29 on the list, was founded in June 2005 and is operated by CarpetVista AB located in Malm?, Sweden. The company has expanded rapidly and is now the largest online carpet shop in the world. Carpetvista is built on a specially developed technology platform and extensive experience in both e-commerce and carpet sales.

They strive to give knowledge and educate their target group so that they choose the carpet that is best for you. That is why they created the Carpet Encyclopedia. This site is for everyone that wants to learn more about carpets or gain some inspiration before choosing a carpet.

They are above the average profitability of the top 30 e-commerce companies in Sweden and also managed to reach a growth of 13%.

According to linkedin, Carpetvista doesn’t have analytics- or a BI team.

30. California Roots (Caliroots)

CEO: Andreas Koschinke has been with Caliroots since he founded it in 2003. He has been the CEO for 16 years and a part of the entire journey.

Group CFO: Michael Hedman just recently (November 2019) started at Caliroots. Michael has previously been working as CFO at big companies such as Aller Media and Benify. Michael is raised in V?rmland and has a master's in economics from Karlstad University.

Head of Buying: Sebastian Hellstr?m has been with Caliroots since 2015. Since being a young teenager he has been passionate about the art of selling clothes. Before Caliroots Sebastian has been working as a menswear manager, visual merchandiser, marketing manager, operations & marketing manager and CEO at another fashion brand called SOLO.

Founded in 2003 by Andreas Koschinke, Caliroots is an online streetwear company. Andreas moved to Stockholm from Kristianstad in 2003 and had together with his friend and co-founder (Per Norell) the e-commerce industry in their aim.

2018 was a challenging year for Caliroots where they had a significant profit loss. The explanation has been that they focused on betting on the wrong products in their assortment. Also, they closed down a couple of their stores and invested in having big flagship stores in Gothenburg and Stockholm which is also one explanation for the profit loss. They also invested in their own brand that they will start to sell.

Caliroots is owned by the venture capitals' Verdane Capital and Equity. Before the summer in 2019 Caliroots did a new investment round and got the famous investor Christina Stenbeck onboard also. Christina invested around 1,9 MUSD in Caliroots.

According to linkedin, Caliroots doesn’t have analytics- or a BI team.

Conclusions and hypothesis’

E-commerce is somewhere between a young segment and a mature one. This could be used as a motive for weak or no profitability still. To not end up doing C-, D-, E-, F-, G-rounds (never-ending fundraisings) though, many more of the e-commerce companies need to start to show profits.  

Compared to many other industries the number of analysts is very low and often not present. I expected e-commerce companies to be much more data-driven.

I suspect that many companies on the list are seeing more and more expensive conversion costs (CAC etc). Many companies that are focusing a lot on performance marketing, with no or little focus on quantified delayed effects, often see a higher and higher cost per conversion (CAC etc). Performance marketing is most of the time evaluated with too simple methods that don't cover delayed effects. When quantifying marketing with tools that omit delayed effects the winners become SEM, SEO, email marketing, events, affiliate marketing, retargeting, etc. All activities that have a medium to long-delayed effect come out as really weak or even with no measurable effect in a simple CAC-model. With a growing brand baseline, the conversion costs are normally shrinking and with a diminishing brand baseline, the conversion costs are increasing. If your conversion costs are gradually going up, please reach out to me. We have several cases where gradually increasing CACs is becoming an issue.

Apart from how to evaluate and in a smarter way spend marketing money what can e-commerce companies do to build more unique experiences?

I want to encourage you to either comment below or reach out to me via InMail or email [email protected]. This is my first analysis of the e-commerce industry and please come with input and suggestions. The goal is to assist in making e-commerce companies profitable faster.

Sources:

* Report "Global ecommerce sales to reach nearly $3.46 trillion in 2019", key figures from www.allabolag.se, LinkedIn data and information from company websites.