Annual Report 2010 - CDON Group

CDON Group Group AB AB
Annual Report report 2010
� Own company launches: The launch of the new internet store Heppo.com in Q3 2010 in the
Fashion segment is an example of how the CDON Group uses existing IT infrastructure,
logistics solutions, and internal know-how to establish new companies with limited
investment needs.
Continuous profitability improvement
The CDON Group aims to improve profitability as the Company grows and expands its stores’
product range in more geographic markets. The Company has operational objectives intended to
create a positive development of margins in the coming years.
� Scalable business model: By exploiting the above-mentioned synergies while the Group is
expanding, management sees opportunities to drive a positive development of margins
within existing and new markets.
� Transition to products with higher profitability: In recent years the percentage of sales that
originates from the Sports & Health and Fashion segments has grown sharply. The CDON
Group intends to continue pursuing this trend by increasing the percentage of sales of higher
margin products, such as clothing and food supplements.
� Transition to proprietary brands: Developing and launching proprietary brands is an
important component of the Company’s strategy. Management sees good opportunities to
continue to build the Company’s brands and strengthen customer loyalty, while increasing
the number of repeat customers by offering attractive proprietary brands, such as Nelly
Shoes, Nelly Trend, and Star Nutrition.
Synergies between the online stores
CDON Group’s operations are based on several online stores that operate through a common
corporate structure. This provides the Group with opportunities to achieve economies of scale in
several areas.
� Purchasing: Economies of scale in purchasing supplier services and goods for sale.
� Marketing and sales: Economies of scale when purchasing advertising space, optimisation of
SEO/SEM investments, and a customer list with more than two million e-commerce
consumers make it possible to direct offerings to specific customer groups based on
demography and purchasing behaviour.
� IT: Scalable IT infrastructure with respect to equipment, monitoring and business systems, as
well as website development, where newly developed or improved functions can be reused
in several online retailers within the Group.
� Daily operations: Coordination of functions, logistics infrastructure, and formalised
procedures for business practices, control, logistics, and contract negotiations.
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