Postcards from Europe: Case Study, Fastest Growing Top Ten!
Welcome to the content from our series "Postcards from Europe" that ran between the 14th - 19th of July 2014. On this page we showcase the top ten fastest growing start-ups in Europe. The data was collected from Deloitte Technology Fast 50 for Central Europe. Find out about our "Postcards" series HERE
#7 Játéknet.hu Kft - Sitting at number 7 on our list is also one of our favourites! It is web based retailer Játéknet located in Hungary – and what do they sell? (okay this is why we love them!) TOYS! Ok, maybe not just toys but everything that a kid would want from PlayDoh to Lego, Barbie and sparkly little princess fun stuff, kids back packs and even balloons! From a growth perspective the business has grown by more than 1000% in recent years and we believe that a lot of that growth lies in a couple of areas:
Firstly, the business model and offering is fairly simple – kids + toys + parents with disposable income + working long hours = don’t have time to head to a regular store so things are purchased online. It is a trend that is occurring across a number of countries both in Europe and the Americas as people find easier ways to get what they need whether that be toys or even groceries.
In fact the growth rates across online retail in recent years has been significant and the cost of entry is much lower compared opening a physical and more traditional brick and mortar operation. The other benefit it is you can manage inventory in a much more financially sustainable way and have the options of buying in volume because your consumer market is larger than if you were fixed to a location only being able to service a single geographic location. In other words – open a traditional toy shop and you rely on foot traffic. If it rains foot traffic is down and you become much reliant on the seasonality of shopper behaviour. Whereas it doesn’t rain online and the shop is open 24 hours a day 7 days a week – of course the best thing is you can appeal to as big a market as you think you can handle.
The third thing that should be mentioned is that the website is fairly functional and easy to navigate – although this could change if they take on product lines away from the core ones they currently have. At the moment they are fixed on Hungary (as the language of the website is largely local) but this doesn’t mean to say with language translation into German or English that this could not change in the future.
The risk is still the seasonality of consumer behaviour and even down turns in the local economy – for example, if this business was in Greece we may be having a discussion about risk factors leading to success other than risk mitigation to maintain success.