The Strategist

Wonderbox shaping the European gift box market

01/29/2019 - 15:47

The French gift box leader is pursuing its expansion, with a new strategy of its own. After years of organic development, Wonderbox has been acquiring competitors in Europe to fuel its growth further. At the heart of the new strategy, which has succeeded in securing the very existence of a market which was nascent just years ago, lies the concept of “mutual growth”.

At the turn of the century, gift boxes were a novelty within the aisles of supermarkets, and the market was further destabilized by the arrival of online shopping. The new economic layer gave free and easy access to the market, to anyone with a phone and a computer. As could have been expected, a flurry of offers arrived, and the market started bubbling. As competing companies started learning the hard way the ropes of the market, many of them disappeared as quickly as they had been born, when they failed to anticipate the many and quick changes. The Daily Management Review writes : “Although the gift box market was born roughly simultaneous to the Internet, the first gift boxes, which can be traced to the mid-nineties, were off the online market, as first websites were more dedicated to communications and information. And, to a great extent, although every gift box brand now sells online, most sales are done through a physical box, bought in a retail store or supermarket.” Among the difficulties encountered, was quality control. With partners outside the supply chain, gift box companies were having a difficult time monitoring quality levels experienced by their customers. Those who tackled this problem survived, those who overlooked it were run out of business or absorbed. Many gift box suppliers, including promising ones, had to close their shops, due to internal processes which lacked the resilience necessary to survive on the market. But that consolidation phase is over, and Wonderbox is now tracing a roadmap of its own.
The roadmap is based on crossed experiences, or what we could call “mutual growth” of the market. As gift boxes grew from simple nearby experiences to all-inclusive trips, the network of partners also grew from a repository of service providers, to an entire catalogue with many different trades. Wonderbox now includes air travel within gift boxes, for instance. The goal is to include within one gift box the entire experience, travel included. Fabrice Lepine adds : “Our job evolved, but always with the same core value proposition. We became also a “content aggregator”, with partnerships including a great number of suppliers. We listed them in a booklet so that customers could first make their decision, and then make their reservation by means of a gift voucher.” The goal of this strategy is not so much to provide additional revenue, as Wonderbox has now reached a solid level of profitability. The intent is, by including all intervening parties into the partnership network, to be able to guarantee solid and reliable quality levels, across the entire offer, and whatever the configuration of the gift box. “We quickly realized how central quality control was, within our specific business”, says Fabrice Lepine, who adds “we test our partners every time a customer complaint is filed.
Acquiring foreign companies enabled Wonderbox to encompass the entire user experience of an increasingly international clientele. Because Wonderbox is trying to shape the European gift box market to its liking, the expansion strategy follows two rules: foreign acquisitions and a diversification of offers. In a nutshell, Wonderbox does not overtake companies which have identical or similar offers but seeks to offer new and diversified experiences to its clientele. Fabrice Lepine explains : “At the beginning of July 2018, we acquired a company in Portugal with 25 employees. Last year, we also acquired a company in the Netherlands with about 30 employees. In recent years, we have had quite a strong external growth, even if our organic growth continues. These brands have a real regional identity and reputation on which we must rely. They are as close as can be to the culture since they are the result of it. Our international expansion will therefore consist in remaining faithful to these local roots while bringing our own expertise, experience and quality standards.” With the abundance of online and international offers available to clients, customers will not be satisfied with “the same thing but elsewhere” and want to enjoy the diverse lifestyle which Europe has to offer. Business News reporter Sami Caramela confirms that this strategy is the right one when she says: Don't be afraid to reach out to and from connections with other companies. Odds are those brands will want to collaborate too. Doing so can benefit both parties; it's a win-win deal.
Unlike many other companies, which base their growth on the acquisition of direct competitors, Wonderbox tries to avoid the type of expansion where all the customer sees, is a change in the name of the company they are doing business with. With this strategy of mutual growth, Wonderbox is modifying what the European market has to offer customers, and creating radically new offers, which simply did not exist a decade ago. Now that the young market has reached maturity, Wonderbox is able to shape the market in a way that is more relevant to the customer’s desires.