Cherry is a fruit, according to Wikipedia, but with this kind of growth I will not be surprised if Wikipedia’s search results first suggest that Cherry is in fact a daily deal conglomerate that started in Estonia just two and a half years ago.
The recent results show that Cherry Media Group has managed to net €27.5 million in sales for 2012, which places them as the #1 e-commerce company in the Baltics.
The company has been growing and consolidating the deal-of-the-day market in the Baltics through both organic initiatives and mergers & acquisitions. 2012 was a key year for the company not only due to its 84% increase in year on year revenue but also because they have entered new markets and monetization concepts.
As Aldas Kirvaitis, Cherry group CEO, put it: “In just 2.5 years we have evolved from a tiny startup into a major regional e-commerce company. We served half a million people and collaborated with 5000 suppliers and merchants in 2012. I am tremendously proud of our young team of 200 employees working in 9 cities across the Baltics,”
This is great news but it is still a brand new industry and it remains to be seen how it is going to develop in the long run. For instance, some argue that the concept has a lot of structural weaknesses, such as the fact that many of the customers are unlikely to return to the merchant at a full price following the campaign, which is one of the pillar concepts that attracts merchants in the first place. Secondly, many consumers get used to the new standard and pricing, forcing many industries to decrease their pricing throughout. Finally, some merchants become very dependent on the campaigns and can not function normally without them. It is also not uncommon for business to go bankrupt, leaving hundreds of buyers disappointed (Although Cherry, Zizu and others usually take it upon themselves to compensate the loss).
These are just some of the concerns that Cherry and others will need to address in the future and it is extremely good to see that Cherry Media Group already on this path.
In 2011, they started to offer physical goods and this became such a popular initiative that in order to cope with the demand, they had to establish warehouses and opened 10 pick-up points in shopping malls in Tallinn, Riga and Vilnius.
In July 2012, they started experimenting with the fashion industry by launching Beta.lt, which is an e-commerce store that is offering high quality clothing from leading brands at highly discounted prices. They already launched a similar store in Latvia and are planning to launch one in Estonia in the first quarter of 2013.
Another key aspect for Cherry Media is online travel. Over 3000 people used Cherry deal coupons to purchase package tours to Turkey and other countries. Local tourism deals in the Baltics were also very popular, bringing increased number of visitors to neighboring countries.
So when Kirvaitis said “We have became a true e-commerce company and plan further major growth here,” we could not agree more. Not only are they entering exciting new markets and experimenting with new business models but they are also differentiating enough so that to ensure a strong future. Perhaps this is what sets Cherry Media Group apart from other players in the field.
Which is not surprising, considering that so many familiar faces are behind the success. Chery Media co-founders and investors are Allan Martinson and Andres Susi (both of MTVP), Aldas Kirvaitis, Vilius Juraitis and Romualdas Dumcius (previous co-owners and managers of ONE.LT, the largest local social network in Lithuania) as well as Alvyde Palaimaite, Ilja Polivanovas, Priit Tomp, Janis and Normunds Bergs, Reinis Vaivars, George Shabad and a number of other individuals.