Econea is a long-standing player among e-shops
with organic products such as cosmetics, drugstore, household products or food supplements. The project that started with the two enthusiastic founders Martin and Pavel now concerns many more people.
We are pleased to present an in-depth interview with Martin Mates, the founder of Econea.cz. Martin provided insightful answers to questions about the future of e-commerce and their upcoming endeavors.
Martin, could you describe the vision you had when creating the e-shop? What was it like in the early stages?
The vision started ten years ago, when the topic of ecology was in its infancy on the Czech market, and we began exploring alternative directions of healthy eating, veganism, and vegetarianism. This topic began gaining traction among people, and we ourselves noticed the significance of what we consume, apply to ourselves, and use for cleaning at home. We became passionate about it and delved into researching how our health is affected by these products and their impact on our planet. After thorough research, we decided to revolutionize practices in the Czech Republic and introduce healthier products to the market. Our vision was to offer all organic products in one place, enabling people to make healthier lifestyle choices.
Could you tell me who all was at the very beginning of the creation of the e-shop?
Initially, there were three of us, but after a year and a half, we parted ways with Michal Kubáň, one of the founding members. Continuing forward, Pavel Černý and I remained as the core team. Subsequently, we welcomed investor Martin Rozhona, who acquired a 10% stake, and more recently, Martin Cernohorsky joined us. Currently, our team consists of four members.
How was the process of creating the e-shop? Did you consider using a 'box solution' like Shoptet or Shopify?
I had an IT company for seven years before starting the e-shop, where we developed applications and built a couple of e-stores. At that time, e-shop solutions did not suit us, so we decided to develop everything ourselves. This approach had many advantages. However, over ten years, we realized the need for a more cost-effective e-shop solution that would meet our requirements. Ultimately, we chose Shopify Plus and transitioned to it this February. So far, we are very satisfied; we can utilize a wide range of apps connected to it.
How did you get customers in the beginning? What marketing tools did you use? Because there weren't many similar stores on the market when you started.
We were coming to the market with something completely new and we didn't know if it would work. So we had to create the demand and stimulate it in some way. So we couldn't use traditional channels like advertising, PPC, search engine optimization. Thus, we relied on email marketing and Facebook advertising, which, at that time, were akin to TikTok advertising today. It's known to exist but nobody is doing it much yet. We were such pioneers and the moment we started advertising very actively on FB, we got off the ground. At the same time, the topics of environmental protection, cosmetics and harmful substances resonated a lot and people still discuss it a lot nowadays. We took a purely organic route and focused on performance channels. Over the years, we've also included PPC, Google and Seznam ads, as people started to search for this topic online. We also tried some remarketing systems like Kryteo and especially
emailing was and still is very important to us. Through that we build a community and are able to deliver different interesting things from the world of health to our customers.
You want to be the most sustainable e-shop in Europe. How do you make it happen? What conditions and commitment does it require?
We try to focus on the entire order and product cycle. We want to focus on the entire life cycle value chain. We look at packaging materials, what packaging board we use, how we sort waste. We are currently sorting for seven different types of waste in the company. We also look at how our suppliers work, how they deliver packages
and try to influence them. We look at what their energy policy is, whether they use recyclable packaging, how they handle it afterwards and we look at it very holistically. Anyway, due to the economic situation, that emphasis has gone a little bit to the back burner and we're more focused on communicating these issues and how to get it out to people and maintain that. The environmental approach is simply the thing we want to do.
Where do you go for ideas? Where do you most often find inspiration for new products?
We continuously introduce new products to our e-shop as our cash flow permits, while also consistently expanding our product portfolio. I have to say that we have a lot to choose from lately and there are more brands than we can handle. Either we are approached by local brands, distributors or we go to the Vivaness fair in Germany where there are a lot of new interesting brands. Or we get inspired by our colleagues at work.
How do you differentiate yourself from the competition, which is getting wider and wider?
The competitive advantage that was there at the very beginning is gradually disappearing. But I think what we do really well is marketing. We're still creating interesting educational content for visitors. At the same time, we're committed to customer satisfaction, where we've kept We like to think of ourselves as more of a specialty now compared to our competitors, where we choose brands and products very carefully so that our customers feel like in a candy store. We target women who are heading to the e-shop for an experience.
Could you describe what has changed since you started? Beginnings vs. present (operations, warehouses, plans, overall view of Econea)
Over the years, Econea as a whole has changed by leaps and bounds, mainly in moving locations, hiring new people and building management. What I would single out is the longest running with my colleague Pavel Cerny, who went down that road with me. He was always in charge of operations and product portfolio development, customer care plus warehousing and logistics. In between, I handled more of the virtual stuff like IT, marketing and development. The split in roles has been going on all along, however, Paul stepped into the background of the company a year and a half ago and is now only as owner. Since then, I have been running the company on my own with Martin Černohorský.
Would you like to share a positive/negative experience that has moved you forward?
Probably the biggest experience I carry with me is to get help with building the company and building management. Without experience in this area, mistakes in selecting the right people can lead to significant unintended consequences. Picking the right people was ultimately one of the biggest mistakes we made. We had a team of passionate people, but it lacked real experience, professionalism and drive. Such mistakes at the beginning were very costly and long-lasting in the final. Often the people who were most passionate about the cause were not focused on performance and finances. Then when the going got tough, these people were often the first to jump out of the sinking ship. So there was a need to find resilient and resilient colleagues to help us get the company back on its feet.
What do you think e-commerce will look like in 2023 and beyond? How will it evolve?
In the Czech Republic, I think everything is heading towards a few big players like Alza, Amazon. They'll be ahead technologically. Smaller players will have a chance only with specialized goods and their own products. I think that e-shops with resale products will disappear and only the quality will remain. At the same time, I think there will be a globalisation of e-shops and it won't matter if you are shopping from the Czech Republic or if you are on a German, British or other e-shop.
Would you also like to expand abroad?
Yes, it applies to us. Not only the threat but also the benefit of globalisation. It's one of the reasons why we chose the Shopify platform, which is very well prepared for international operations. We are currently targeting Slovakia, Hungary and more of the eastern market.
Do you think it will still be environmentally sustainable? In terms of eco-delivery etc.
Yes, I think it clearly is. According to the studies I've had a chance to see, there will only be a negligible percentage increase in carbon footprint, even though goods will travel longer distances. According to studies, transportation still has less than 5% impact on the carbon footprint.
Could you briefly describe how Flowpay funding has assisted you?
In two cases. One of them was a Christmas classic, when it was necessary to stock up for November and December. Flowpay helped us a lot during this period, mainly due to the speed of getting the credit. Compared to the banks, it really was a few clicks away and we didn't see any risk in the loan because we knew we would be able to repay the loan by February from sales over the Christmas period.
The second thing was the economic situation during the invasion of Ukraine. Overall, the whole eco-organic segment dropped by some 20-30% after the invasion in Ukraine and it is still at a similar level. In this case, Flowpay helped us with operating costs when we needed to bridge an uncertain period. We took a calculated risk from our end to alleviate pressure on performance.
Comments