Skroutz as a Case Study: E-Commerce in the Age of Covid-19

By Endeavor Greece Dec 1, 2020

The total value of goods sold through the Skroutz.gr platform throughout the pandemic skyrocketed as it approached 1 billion euros. As a result of the massive shift of consumers towards e-commerce, the company increased its growth rate up to 70-80% and almost doubled its staff.

With 6,000 stores and 10 million products on its platform, Skroutz.gr is currently the fourth most visited site in Greece (after Google, Facebook and YouTube), and the company that shaped the field of e-commerce in the country.  

What is the secret of this success story? “I have never thought that I am an entrepreneur. This is not my concern. The important thing is that I like what I’m doing” stated the co-founder and CEO of Skroutz.gr, George Hadjigeorgiou, at Endeavor Greece’s podcast series Outliers, whose media partner is moneyreview.gr. 

Mr. Hadjigeorgiou reveals that the idea to create Skroutz.gr was born in 2005, when a friend of his wanted to purchase a new computer and tried to compare prices. “There must be another way,” Mr. Hadjigeorgiou thought, and just like that he started working on a price-comparison site, after his morning job. He never performed any market research, nor did he check the competition, as he pointed out, because all he wanted was “to do something that pleases me and not to build a company”. 

At that time, the internet was a relatively new technology and in Greece there were not so many computer engineers. “The crisis scared us, but soon we realized that if we are good at what we do, we can survive,” Mr. Hadjigeorgiou recollects. 

Skroutz.gr is growing dynamically at a higher rate than the market growth, something this captured the interest of CVC Capital Partners and led to a mega-deal with one of the biggest private equity companies in the world at the beginning of 2020.

Indeed, according to the data provided by Mr. Hadjigeorgiou, there has been a rise of 25-30% in the turnover Skroutz.gr raises for its traders (Gross Merchandise Value – GMV) before the outbreak of the pandemic, and currently its growth rate is approaching 50%. The total value of goods has reached 900M euros, while there has been an increase of 70-80% in the turnover, and it is expected to continue to rise at a rate higher than 50% in the next 1-2 years. 

“The pandemic was an ‘awakening’ and a ‘kick to move forward,” Mr. Hadjigeorgiou stated. The smart basket of Skroutz.gr has expanded from 280 to 1,800 product categories, and new traders, who do not have their own online retail store, have joined the platform, as companies try to find a new way-out in the time of the pandemic when stores are closed. The pandemic has brought several changes in consumer behavior and a major shift to e-commerce. An indication of this is that the smart basket of Skroutz.gr has reached a peak of 4,000 orders a day, compared to 200-300 orders a day before the pandemic. However, the CEO of Skroutz.gr estimates that in the Greek market there is still room for significant development, because the e-commerce penetration in Greece has currently reached 7%, while the average percentage in Europe is as high as 14%.

The challenges that the e-commerce faces in Greece can be identified in the field of payments (as it takes 4 or 5 days for a cancellation to appear on the customer’s account, and cash on delivery can be particularly problematic for the traders), and in the “last mile” of delivery. And these are the sectors in which Skroutz.gr is looking for takeovers, and Mr. Hadjigeorgiou has announced 1-2 bids in the next semester. The company aims to control the entire “user journey” and to guarantee a very good experience throughout all stages of the order. “Our goal is to enable customers to buy whatever they want at Skroutz.gr in competitive prices and have an experience that does not make them think twice about their purchase,” Mr. Hadjigeorgiou explains. 

In any case, he believes that there will be great opportunities for the startups and for the Greek economy, and he foresees that the brain drain will be reversed, because, as he points out, he sees talented people from Greece, who went abroad and internalized these practices, wanting to come back to their country. 

And what about the day after the pandemic? “We will not go back to where we were,” the CEO of Skroutz.gr explains. “At the moment, 98% of the company’s employees work from home, but in the future there will be a hybrid model, in which people will be able to work from home if they find it more convenient.” 

The article was originally published at moneyreview.gr
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