German electronics group Media-Saturn, which recently bought online shop Redcoon, is demanding the same purchasing conditions for its online subsidiary as for its chains Media Markt and Saturn. The problem is that the offline chains are many times larger than Redcoon, so the demands of Media-Saturn are causing some irritations with suppliers.
Suppliers under pressure
Early June German company Metro announced MediaSaturn had acquired the final 10% of Redcoon and therefore was owner of the full 100 percent of the pure player that was founded in 2003.
The company immediately proclaimed it had big plans for expanding Redcoon and Metro said the cooperation would be very profitable for suppliers. A while later a second letter followed, says Lebensmittel Zeitung. In it the group from Ingolstadt said it wants the same conditions for Redcoon as it is currently getting for Media Markt and Saturn. Talks about that should follow shortly.
Loss in turnover
Suppliers are not amused: on its own the online shop of Redcoon may be bigger than the online parts of Media Markt and Saturn, but with 260,000 visitors each day and online sales of about 180,000 products per months, Redcoon is not exactly a huge player - especially when compared to the physical locations of Media Markt and Saturn.
Anonymous suppliers say they are not only afraid that the loss in turnover will never be compensated by a higher number in sales, but they realise that special treatment for Redcoon could also affect the demands of other online players, which would put an even bigger pressure on the profit margins.
Also big questions at Media-Saturn
Not only suppliers and the competition are following the negotiations with more than average interest. At Media Markt and Saturn not everybody is happy with the way things are going.
If Redcoon does get the same prices as Media Markt and Saturn, the store supervisors fear it would eat away at sales of their own online shops and their physical locations.