Online Goliaths

Ein fertig verpacktes Paket liegt am 11.12.2012 in der Versandabteilung des Amazon Logistikzentrums in Pforzheim (Baden-Württemberg) auf einem Fließband. Das Weihnachtsgeschäft von Amazon läuft auf Hochtouren, auch das neue Logistikzentrum in Pforzheim mischt kräftig mit. Foto: Jan-Philipp Strobel/dpa [ Rechtehinweis: (c) dpa ]
Amazon’s clever combination video streaming, e-books and free expedited shipping for online purchases has strong customer loyalty that reaches beyond traditional retail.
  • Why it matters

    Why it matters

    Germany’s online retail business is becoming increasingly concentrated, with U.S. giant Amazon’s domination threatening smaller online merchants.

  • Facts


    • In 2015, the combined sales of Germany’s top three online retailers almost equalled that of the rest of the top 100 combined, according to a new study.
    • Amazon’s sales were almost triple those of Germany’s second-largest online retailer, Otto.de.
    • Much of Amazon’s success is down to subscription service Amazon Prime.
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Two years ago the Cologne Center for Research in Retailing (IFH) sounded an alarming prediction for the e-commerce industry: Amazon’s market dominance would mean only 10 percent of exclusively online retailers in Germany could survive long-term. Only specialized online retailers would stand a chance.

The latest revenue figures confirm this dramatic development. According to “E-Commerce Market Germany 2016,” a new study obtained by Handelsblatt in advance, Germany’s online market has become increasingly concentrated.

The study shows that the combined sales of the three biggest online retailers –Amazon, otto.de and Zalando – nearly equaled the sales of all other retailers in the top 100 combined. Amazon’s retail sales totaled €7.8 billion, or $8.7 billion in 2015, accounting for nearly a third overall.

“With [Amazon] Prime, Amazon has created its own ecosystem, which it continues to expand.”

Lars Hofacker, EHI Retail Institute Head

Such dominance has been achieved thanks to the overwhelming success of the Amazon Prime subscription service.

Amazon Prime cleverly combines the company’s various segments into one subscribable package, including video streaming, e-books and free expedited shipping for online purchases. It’s created strong customer loyalty that reaches beyond traditional retail. No wonder Ralf Kleber, chief executive of Amazon Germany, describes Amazon not as a retailer but an “infrastructure company.”

“With [Amazon] Prime, Amazon has created its own ecosystem, which it continues to expand,” said Lars Hofacker, head of e-commerce research at EHI Retail Institute, which helped conduct the study.

Amazon still has major competitors, like Hamburg-based Otto Group which is trying to stand up to its U.S. rival. In addition to Otto.de, Germany’s second-largest online retailer operates dozens of successful online shops under different names, like the Bonprix fashion retailer which made €485 million, or $541.7 million, in 2015. Otto also owns the year’s biggest rising star, Aboutyou, a clothing retailer founded less than two years ago, which is now ranked at 70th.

At Zalando, a new platform strategy is paying off. It transforms the retailer into a marketplace, in which fashion labels are given extensive freedom to design their own websites. More than 2,000 shops by have been created on the platform by fashion brands.

Embattled clothing company Esprit has also undergone a remarkable transformation. Chief executive José Manual Martinez, who took office in 2012, is on track to bring the company out of the red by closing shops and simplifying procedures. It’s becoming clear that significantly improved online business is also contributing to Esprit’s turnaround. With online sales of €342 million, or $382 million, the fashion retailer has advanced from 24th to 12th on Germany’s list.

Despite market consolidation, overall sales growth remains high. Total sales of the 100 largest online retailers increased by more than 13 percent to €24.4 billion, or $27.2 billion, this year. By comparison, sales in the entire retail trade sector grew by only 3.1 percent last year, according to the HDE trade association.

Electronics retail giants made big gains, with Media Markt jumping from 30th to 18th and Saturn from 51st to 33rd. “Clearly, the additional customer services the company has introduced are bearing fruit,” said e-commerce expert Hofacker.

But a look at Switzerland shows what might have been possible if these merchants had not taken so long to enter the online game. Startup Digitech, with sales of €600 million, or $670 million, is ranked first in the country’s ranking of online retailers – well ahead of rivals Zalando and Amazon.


Florian Kolf heads the consumer goods, luxury and fashion desk for Handelsblatt.  To contact him:kolf@handelsblatt.com

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