redcoon

» see redcoon.de as it lived, on the wayback machine

~ the last words ~

redcoon was a discount electronics shop out of Aschaffenburg, selling white goods and consumer electronics online at prices the high street could not match. Reiner Heckel founded it in 2003 after a career inside MediaMarkt, so he knew exactly which margins the big chains were protecting and built a business aimed at every one of them. It ran shops in Germany and Italy, and for a stretch it was the German internet's default answer to where you actually buy a television.

The growth was steep. Revenue was 138 million euros in the 2007/2008 financial year and 354 million two years later, then settled at 432 million for 2011 and 2012. In March 2011 Media-Saturn, the retail group behind MediaMarkt and Saturn, announced a deal to buy the company for 125 million euros. The chain had tried and failed to build its own online shop, and buying the discounter that was beating it looked like the shortcut.

Media-Saturn completed the takeover in June 2013, when Heckel sold his remaining ten percent and left the management. After that the story is one long unwinding. In April 2017 redcoon.de went offline without warning and the company explained it as a planned rebuild. The shop came back weeks later running off the shared MediaMarkt and Saturn product database, which meant it was no longer a discounter in any sense that mattered, because its prices were now drawn from the same well as the chain it had been built to undercut.

In May 2018 Media-Saturn took redcoon.de down for good. The Polish shop lasted until 31 March 2020. I was not a customer, because none of this reached Turkey: redcoon sold into Germany and Italy and the Polish market, and a German electronics discounter is only useful if a German courier can reach you. The shopping habit behind it is familiar enough. In Turkey that habit lived on donanimhaber, where you compared component prices for a week before committing to anything.

~ the record ~

~ the early days ~

The pitch was narrow and it worked. No stores, no salespeople on commission, a catalog of brand-name electronics, and a price. German shoppers of that period were already using price comparison engines as the first step of any purchase, so a retailer that could sit at the top of those listings got the sale without having to be known for anything else.

Being disliked was part of the method. The German advertising standards council formally censured redcoon over its advertising twice, in 2011 and again in 2013. A discounter being told off for its ads is free publicity in a market where the serious chains cannot afford to be.

~ the fall ~

The acquisition went wrong in a way that ended up in court. Media-Saturn later sought to unwind the purchase altogether and sued the former owners for around 300 million euros, claiming damage from alleged competition-law breaches, and won a first judgment against one of them. In August 2017 Manager Magazin reported that redcoon had been caught up in an illegal VAT carousel with potential tax claims of up to 64.4 million euros.

The same reporting put numbers on how bad the trading had become. In the 2015/2016 financial year the company posted a gross margin loss of about 45.2 million euros and an operating loss of 120.3 million. A business billing 432 million euros a year can lose 120 million in a year only by selling goods for less than they cost, consistently, as policy.

~ the two deaths ~

The archive shows the shutdown cleanly. Captures of redcoon.de through April 2018 are full shop pages of around 58 kilobytes. The last one is dated 27 April. By 3 May the whole site is 1.2 kilobytes: a logo and a short note.

The note is polite and says the thing plainly. redcoon.de has been fully integrated into mediamarkt.de, where you will continue to find a broad range of consumer electronics; everything ordered on redcoon.de will be delivered and warranty claims will still be honored. Then a freephone number and a sign-off from your redcoon.de team. A company that spent fifteen years telling Germany that the big chain charged too much ended as a referral link to the big chain.

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