The investment forms part of IKI’s strategy to offer home delivery services in Lithuania that will be profitable over the long term. To date, the business has not had its own e-commerce department. This investment therefore also signals that an agreement has been reached about the development of an e-commerce strategy and investments in programming resources and digital marketing.
In Lithuania, food retailers offering home delivery services face a number of challenges that limit their opportunities to generate profits. For this reason, some have not yet invested in a traditional e-commerce model with an in-house network for the collection and delivery of goods to customers.
In an interview with Verslo Zinios, the Lithuanian news platform, Palink CEO Nijolė Kvietkauskaitė said that the LastMile model was the only option offering long-term profitability in a small, less populous country such as Lithuania. Following the acquisition, the principal aim of the e-commerce business is to expand the product range and have around 20% more IKI customers in three years’ time.
UAB Palink is a Lithuanian retail company that was founded in 1991 by three Belgian brothers, George, Oliver and Nicolas Ortiz. Today, it is one of the largest employers in the country and has over 230 supermarkets in 67 cities under the IKI brand — the second largest retail chain in Lithuania. The REWE Group has been the largest shareholder in IKI since 2008. Along with fresh products, IKI supermarkets offer their customers a wide variety of products at bakery, fish and delicatessen counters. Additionally, the supermarkets offer non-food items tailored to meet customers’ needs. IKI has also shown itself to be innovative by becoming the first retailer in Lithuania to implement self-service checkouts. As an additional option to conventional checkouts, self-service checkouts make it possible to pay quickly even during busy periods.