Frisbo CEO Bogdan Colceriu talks European fulfillment and e-commerce trends
You can read this article in 9 minutes
European fulfillment specialist Frisbo has undergone a significant expansion to four new countries this year, with the plan being to double that figure by the end of 2022. The company, which received $2 million investment in a Seed funding round last December, currently has 25 warehouses across Europe and offers same-day-delivery in 24 nations. Its service also boats integrations with major e-commerce platforms including Allegro, Shopify and Woo Commerce.
The development of the fulfillment company comes at a time of rapid change and disruption in the industry caused by the pandemic, changing consumer habits, and the drive to be more sustainable.
To discover how Frisbo has and is managing its expansion, and to what extent the company is adapting to trends in ecommerce and fulfillment concerning energy efficiency and outsourcing, we took the opportunity to speak to CEO Bogdan Colceriu.
Thanks for talking to us Bogdan. Earlier this year, you expanded into four new countries. You also have plans to expand to another 4 European nations. That seems like a huge undertaking in a relatively small period of time. How is the process going and how confident are you that you can launch these expansions effectively and gain enough custom to make the investment worthwhile?
We’ve built a network of 25 logistics centers in 13 countries – incl. Romania, the Czech Republic, Poland, Germany, Spain and Great Britain. We are growing together with our customers. Over the past year, the number of customers using the wider Frisbo network has increased by 70%. So we constantly need to strengthen the regions where the demand for fulfillment services is growing.
We have a long list of potential storage partners in various countries who are ready to connect to our platform. If we are approached by a customer who needs services in a country that is not in our network, we are able to connect a new local warehouse in a few weeks. So we can scale quickly. In 2021, the company’s turnover increased by nearly 80% year-on-year.
One of those countries is of course the UK, which has proven to be a difficult place to find staff post-Brexit, especially in the areas of fulfillment and logistics. How much of a challenge has it been to recruit for your UK expansion? Have you had to get creative or provide a very attractive offer for example?
Shipping from a warehouse located in the UK significantly speeds up deliveries, which have been hit hard by customs procedures. Also the sellers from the UK can benefit from relocating their goods to EU ground. That’s why UK expansion was one of our important goals. Frisbo operates in a quickly scalable model – we referrer to it as “Uber for warehouses”.
So we’ve reached out to UK-based fulfillment centers and connected two of them to our network, integrating their WMS with our platform. Recruitment was not necessary in this process, as all the services are delivered by the local warehouse staff.
You’ve also talked about adapting to sustainability trends via the use of energy efficient equipment. What have you done in regards to this or have plans to do in the future?
Reducing costs and improving efficiency is part of our DNA. Frisbo platform helps to identify the unused processing and storage capabilities of various logistic providers and to match them with needs of sellers across Europe. We replace the classical crossborder logistics model with decentralized local fulfillment. Keeping the stock as close as possible to clients reduces the cost of logistics and transport and the carbon footprint.
Another issue Frisbo has referred to is large fragmentation when it comes to cross-border e-commerce, a situation the company believes it can tap into. How do you intend to go about this?
Yes, the European e-market is still very fragmented. Until now, the Polish e-commerce market has operated largely internally, scaling its operations mainly to the closest neighboring countries.
With our help, we want it to reach further. For years, the main destinations were Germany and the Czech Republic. Today, more distant markets such as Romania, Greece, Italy and Spain are gaining in popularity. And this is where cost-effective and easily accessible fulfillment services open up new opportunities.
Goods are delivered from local warehouses via local couriers. Foreign retailers can compete with local online shops by offering next day delivery and easy return options. That’s our value proposition. We are looking for partners who – like us – see the potential in the strong growth of e-commerce in Central and Eastern Europe and the opening of companies from the region to customers from the so-called old EU countries and the UK.
Frisbo has been on record as saying it believes more companies will outsource to e-fulfillment platforms. What has made you come to this conclusion, and to what extent do you see this trend developing?
Competition on local e-markets gets tougher, not only due to the growing number of online stores but also a big pressure from marketplaces. That’s why shops are starting to look outside the country for significant growth and they need cost-efficient logistic solutions.
Until now, international fulfillment services have been used by the largest shops. Warehouses with fulfillment services mainly accommodated large customers with a corresponding volume of goods.
Through our platform, each shop, regardless of its sales size, can place its goods where it is closest to its customers. What is more, they can also provide next-day delivery. Data from across Europe shows that there is indeed a year-on-year increase in the amount that European consumers are willing to pay extra to get their order the very next day after purchase. That’s on average already €4.2-6.2 in 2021, depending on the value of the order – up from €3.4-5.2 in 2020.
By 2027, the European express delivery market is expected to be worth up to $98 billion – in a single EU market, it is often only the delivery time that differentiates local shops from those abroad.
How much do you monitor national online sales platforms, and in terms of growth, how important are integrations with additional sales platforms and ecommerce sites?
We track the growth of platforms in European countries so we can adjust our offer and technology accordingly.
It is one of our big advantages – any seller can easily plug into our platform and manage all sales channels and markets in one dashboard. Frisbo is already integrated not only with global platforms, like Amazon, Shopify, Magento, Woocommerce but also with local players like Allegro, IdoSell and Shoper in Poland. According to Eurostat, in 2020 only one in twenty Polish companies will sell to other EU countries. Meanwhile, this year global foreign sales may account for as much as 17.3% of all online transactions. So there’s big potential for growth.
A recent report by the UK Transport Committee has concluded that a 'Supply Chain Levy’ should be introduced within two years if HGV driver training and facilities are not improved by the industry. The tax would be aimed at “such as large retailers, oil companies and online service giants” among others. What do you feel about this idea and the suggestion that the logistics industry should be made responsible for shortcomings in this area?
We believe the shortcomings come from many factors, lockdowns in China as the main one. We see how our clients are affected by increased time and costs for bringing their goods to our warehouses. However, once the merchandise has been stored, the fulfillment and last mile deliveries work in expected time.
How do you see urban logistics developing in the future, and to what extent have you taken on board future developments with regards to the scale, design and location of your new fulfillment centers?
As I mentioned before, our platform is designed for a decentralized local fulfillment model. We connect merchants with fulfillment centers located as close as possible to their clients. And we can do it both on the crossborder and on the urban level. Any size of distribution center, even a micro-depot can plug into our platform and offer its services.
They don’t even need to have their own WMS. The rise of e-commerce brings more freight into cities and we are ready to help with more efficient goods distribution.