Bloomberg News

CDON to Add Products, Retailers to Grow Online Sales, Chief Says

May 15, 2012

CDON Group AB (CDON), a Swedish online retailer, will add products and open its site to other retailers to establish Cdon.com as the top online shopping site in the Nordic region, Chief Executive Officer Paul Fischbein said.

Products from CDON Group’s other shopping sites will continue to be integrated into the cdon.com product range, Fischbein said May 11 in an interview. Last year, Cdon.com added toys and baby products, marketed via the group’s Lekmer.com site. Home appliances, currently sold via Tretti.se, are next in line, and other retailers may get access to the site as early as this year, Fischbein said.

Malmoe, Sweden-based CDON Group has 10 online stores selling products ranging from fashion to interior design and it would only add a selection of products featured on other online stores to Cdon.com, Fischbein said. Growth in the group is driven mainly by Cdon.com and fashion site Nelly.com with 57 percent and 21 percent respectively of total 2011 sales, according to the annual report. Cdon.com, which started as a seller of compact discs, last year saw home electronics become its biggest product category.

“Cdon’s position is very strong with a huge client database, large traffic volumes and high brand awareness,” Fischbein said. “We want to capitalize on that and on the underlying market growth and in our view broadening Cdon.com is the way to do it.”

The company is open to growing through acquisitions, Fischbein said. The target is to add one or two new product categories each year on a group level. Cdon.com could potentially be expanded with products such as tents and camping goods, Fischbein said.

Global Site

CDON Group’s most successful acquisition is Nelly.com, added in 2007. Sales in the fashion segment increased by 69 percent to 731 million kronor ($104 million) last year after Nelly opened a European shopping site, which will be followed by a global site this year. The company has local sites in the Nordic countries as well as Germany, the Netherlands, Austria and the U.K. Other local sites will follow, mainly in Europe, Fischbein said.

“The good thing about a Nelly EU site is that it is a decent business on a stand-alone basis and at the same time it gives an indication of where Nelly works,” Fischbein said.

“When we open the rest-of-the-world site for English speaking customers worldwide it may likewise indicate if Nelly works in the U.S. or Australia.”

Sales in CDON Group’s entertainment segment, which includes cdon.com, BookPlus.fi and Lekmer.com, rose 29 percent to 1.93 billion kronor last year. CDON Group was spun off from media company Modern Times Group AB (MTGA) on Dec. 15, 2010.

To contact the reporter on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net

To contact the editor responsible for this story: Kim McLaughlin at kmclaughlin6@bloomberg.net


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