Shobr warehouse_web

Shobr is planning to open two new warehouses in Germany and the Netherlands

“The way I see it, Europe essentially becomes the food production facility for China. It’s a huge opportunity.”

Lars Munch Johansen is in a bullish mood.

The founder and CEO of Shobr, a direct-to-consumer marketplace for grocery brands, has just secured a partnership and funding from BoHouse, one of China’s biggest distributors whose partners include Alibaba, Walmart China and Weibo. The deal will see Shobr open an office in Shanghai and move its HQ to London; James Lu – formerly of Amazon and online search giant Baidu – joins as chairman.

“The way I see it, Europe essentially becomes the food production facility for China. It’s a huge opportunity.”

At the same time, Shobr is gearing up for expansion in Europe. A Dutch venture is launching shortly; a German one is in the works. Both will be crucial in underpinning Shobr’s new push into China. “We will be using our warehouses in Germany and the Netherlands to serve Chinese consumers before we serve German and Dutch consumers,” says Johansen, though Shobr variants for Dutch and German consumers will also launch in due course.

With the Shobr head office now based in Mayfair, Johansen also has half an eye on the UK grocery market. “It makes complete sense for us to be based in London - it’s where our suppliers are and where our investors are,” he says. “And of course there could be a big opportunity in the UK market itself at some point.”

While Shobr has signed up global giants like Kraft Heinz in Nestlé for its B2C platform in Denmark, the primary target for its Chinese venture will be “tier two and three” fmcg brands that are interested in international expansion but lack the resource to tackle the complex Chinese market on their own. The first partners have already been signed up, with confectionery, organic babyfood and healthy snacking brands on board.

There’s enormous potential for such brands in China, believes Johansen. “There is so much counterfeit food,” he says. “The big brands they already have ways into the market, but for the smaller players – the tier twos and tier threes – a platform like Shobr will make a huge difference.”

Crucially, Shobr’s push into China will not see it attempt to set up its own consumer-facing brand in the country. Instead, it will work as a B2B provider to existing platforms like Alibaba, with brand owners able to opt in and out of whichever marketplace they want their products to be sold on.

This approach is underpinned by a giant product database using the GS1 universal barcode, which allows products to be listed in on new marketplaces and websites with ease, says Johansen. “We have a giant database of products. We can populate a website within a matter of days.”

Taking back control

Shobr’s Chinese venture is the latest development in what has been a busy year for the Danish start-up. Since launching officially last August, the platform has managed to sign up some of the world’s biggest grocery brand owners for its B2C platform in Denmark, with a total of 7,000 SKUs available from just under 100 brands. Right now, it’s handling about 250 orders a day; it expects that figure to rise to 1,000 by December.

Johansen believes Shobr has managed to gain traction so quickly because its proposition is compelling: it wants to give fmcg brand owners back control in the fight for eyeballs and consumer spend.

Shoppers experience Shobr as a standard online grocery retailer in the vein of Ocado, but behind the scenes the power dynamics are very different. The brands are in control: they decide which SKUs they sell through Shobr; they set their own pricing and promotional strategies.

It’s a huge attraction, especially at a time when range rationalisation is rife. “If a Tesco, a Sainsbury’s etc delist you, you are not in control anymore,” says Johansen. “Your products won’t be seen. The brands realise that. They understand they have to be available at all the various access points online where consumers are – Shobr helps them do that.”