As I write this, I thought I should have written this in the investment blunders thread. I got a tip that the Nordic countries have gotten their own marketplace business right after a fresh IPO. This is, of course, the CDON we all know.
My own familiarization is still in progress, but this is a company that has undergone renewal in recent years. It has shifted from retail sales towards a marketplace business, which is capital-light, highly scalable, and high margins are part of the game. Can it perhaps be remotely called a mini-Amazon? In the background, a quite cleverly developed platform called “CDON connect” seems to be running the marketplace. So, through digitalization… personally, new attractive platform businesses usually cause me a huge erec… reaction
After the share price increase following the IPO, the capitalization is about 1.5 billion SEK…
I believe there are people on the forum who can contribute to this case - also on the numbers side. Due to good prospects, I have added this to my portfolio with a couple of percent weighting for monitoring.
The company also has its own pages on the Inderes service: CDON - Inderes
I have not yet found analyst coverage for the company.
Addition January 2021. Fresh analysis package on the case:
I’m in. Added more weight The beauty of this case is the shift from retail sales towards a Marketplace model…which isn’t fully reflected in the numbers yet either If you do the calculations, you’ll understand how ridiculously cheap the company is based on forecasts a couple of years out…
Good opening! From a consumer perspective, CDON’s service has been deteriorating year by year, and the mentioned shift to the marketplace business hasn’t worked, at least for components. The sellers have been quite low-quality, and you literally buy a pig in a poke (deliveries can take several weeks). In addition, customer service availability and speed are constantly getting worse.
It remains to be seen how the marketplace transformation will be implemented in the future, but the 2019 vs. 2020 numbers at least look good. How much of it is a “corona boost” and how much is real growth, it’s hard to say. Based on my own (and others’) experiences, I don’t want to own the company; I’d rather put my money into Tokmanni or Verkkokauppa.
Years ago, I used the CDON website a lot, but these days I don’t buy physical copies of games, books, or movies. Of course, you can get a decent selection of fragrances there.
There are several different sellers, so some experiences are worse. For me, it has taken a really long time a couple of times for the product to arrive.
Cdon was a great thing about 8-12 years ago, with quality stuff at affordable prices, fast delivery, and often really good offers. After that, it faded out of use in my close circle, and I myself didn’t even remember the site existed. I talked to my wife, who said she had ordered “real leather” phone covers last year, which weren’t even close to leather. She said it was the last time she’d touch that marketplace when there are other sites
I’ll definitely follow the thread out of interest and see how the numbers develop. There are starting to be quite a few of these “mini Amazons” little by little, and it remains to be seen if the arrival of “the big Amazon” in the Nordic countries will have an impact.
Here’s the podcast for this thread too. Nordic marketplaces are not “on every corner”?
“Shunned by investors” sounds quite fitting when combined with this transformation - but we’ll keep an eye on it. I think this has the potential to surprise the markets within 1-2 years.
My own orders, only a few in 2018-2020, have been handled as expected.
My own experiences from years ago are not very positive either. However, when I moved to Sweden four years ago, I noticed it was quite popular there. A friend even stated directly regarding Amazon’s arrival in Sweden, “Jag ska fortfarande köpa från Cdon” (I’m still going to buy from Cdon). Referring to a similar topic, at least the Swedes in my acquaintance circle also seem to prefer Boozt over Zalando.
I don’t have time to listen to the podcast right now (definitely later), but what competitive advantage does being Nordic give? If you’re building a “marketplace”, I’d think the platform’s popularity, visibility, and pricing power would be the number one thing. Cdon certainly has a strong hold in the domestic market, I won’t deny that
I’ll have to re-listen to that podcast too. After listening in the autumn, I got the impression that Amazon takes its own slice but won’t dominate the entire market alone.
My own vague understanding is exactly that CDON has been known in the Nordics for a long time. You can see from the review counts I posted where CDON is presumably favored. Less so in Finland.
The transformation here is what interests me. As a highly scalable platform, it could probably surprise. I’ll watch what 2021 brings with a small monitoring position.
From a consumer perspective, I’ve been very disappointed with CDON’s operations. I generally understand that it takes months for the company to process product returns, and I encountered this myself. Returning a computer component took a total of about 2 months, which is a long time to keep around 300 euros in unknown hands. I don’t know if the process’s smoothness is only struggling in Finland or elsewhere as well.
Also, product availability often fluctuates. They might sell from “stock,” but the stock is on the other side of the country, and delivery times are extended. Ultimately, it seems to come down to what kind of screening process allows sellers to sell their goods on the platform. I feel that the operating model is still finding its way, and CDON wants to take on as little responsibility as possible. A faster reaction capability from CDON would certainly increase satisfaction among end consumers, but also among sellers.
Here’s a link to a discussion about CDON from the perspective of computer hobbyists: CDON.com | TechBBS
CDON has always felt like its user interface is very bad and unclear, delivery speed and reliability are poor, discounts are lousy, and usually discount leaflets are full of discontinued products and perfumes. Customer service is slow and clumsy.
Due to bad experiences, I won’t even buy a single share. And others seem to have similar experiences.
Looks like CDON is dropshipping now, they probably don’t have their own warehouses, the pages are clunky, prices are high, not going to use them again.
CDON doesn’t decide the price of those products, but rather the seller. CDON just provides a platform where sales take place (cf. eBay). The seller of the lens in the picture is ComputerSalg A/S, and behind the iPhone discount scam is Teknikproffset Nordic AB.
Of course, that doesn’t negate the fact that negative experiences affect the reputation of the entire platform. The platform provider can hardly influence selling at an exorbitant price, but that discount scam should indeed be prevented (e.g., by setting a minimum discount of -5% and perhaps even more for front page ads). Seller reviews could perhaps also be highlighted better on product pages, so that the worst customer service providers would drop out.
The beauty of this case is the shift from retail sales towards a Marketplace model…which isn’t fully reflected in the numbers yet either 
