Rocket Internet shares fall on first day of trading

Rocket Internet shares fell on their first day of trading in Frankfurt, failing to replicate in Europe the investor hype over e-commerce stocks sparked by Alibaba Group's debut. The stock lost 3.9 per cent to €40.84 at 11.15am, valuing the start-up investor that became famous for replicating businesses from Groupon to Airbnb at €6.3 billion.

Oliver Samwer describes the company he founded with his brothers Marc and Alexander as the world's largest internet incubator. It can develop and launch a new online company in six to eight weeks, rolling out aggressively in multiple markets worldwide.

Oliver, the 41 year-old public face of the company, sees himself as a online retailing prophet. Traditional shops are “post-Jesus, completely Middle Ages, an invention because there was no internet”. His company is focused outside the US and China, he says, because “the fewer stores a country has, the faster e-commerce grows”.

A hot dispute over Rocket Internet, and what future shareholders are actually buying this morning, will roll on long past today’s stock market debut. Samwer admirers say the siblings are daring risk-takers and right to push Rocket Internet as a global presence. Critics say the shares are a pig-in-a-poke punt by investors who crave a new dotcom success story. The German company, critics say, is a cut-and-paste sweatshop of loss-making copycats rather than sustainable innovation.

The Samwer brothers don’t deny they copy ideas, but view it as a sincere, and profitable, form of flattery. They sold their auction site Alando, an Ebay clone, to the US original at a huge profit. Others followed and, with it, came the Rocket model: identify a winning concept, set up a copy, provide staff, investment and marketing assistance and cut it loose.

The most successful Rocket spin-off is clothing retailer Zalando, now Europe's biggest online fashion site with annual sales likely to top €2 billion in 2014.

Zalando sells everything from designer dresses to golf shoes and had its own IPO yesterday. It raised €605 million when shares surged 14 per cent after a Frankfurt debut that valued the company at €5.5 billion.

Berlin tech scene observers say Rocket Internet’s fans and critics are both right in their competing claims about the company.

"The Samwers clone companies - logo, name, website design, sometimes even the site code - and are often very cheeky about it," said Joel Kaczmarek, a Berlin tech writer and author of a biography of the brothers. "On the other hand, rolling out companies in six weeks, parallel in several countries, is something no one else is able to do."

He says the Samwer brothers’ love-hate relationship with the German business community and media arises from their “very un-German” opportunistic approach to business that clashes with Germany’s dominant business values of low-risk, low-debt and modesty.

Oliver Samwer says Rocket Internet has merely brought German business values like hard work and good organisation up to date.

With his restless air and “die to win” approach, however, insiders say Mr Samwer has coloured the aggressive corporate culture at Rocket Internet, which he dubs “McKinsey on steroids”.

Today, after rapidly building up muscle mass, German analysts say the task for post-IPO Rocket Internet is show its new bulk can be sustainable - and profitable.

Additional reporting: Bloomberg