European Alternatives to Selling on Amazon

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Amazon may be an e-commerce powerhouse in countries like the USA and the UK, but in the rest of Europe, it’s a slightly different story. While Amazon dominated almost 50% of the American e-commerce market in 2017.

By comparison, the brand only maintained 21.7% of the e-commerce market share in Western Europe, which already has the highest volume of Amazon customers on the continent. While this is a respectable share across Europe as a whole, the company is in constant competition with domestic, home-grown platforms.

While it’s unlikely that these platforms will outperform Amazon across the continent, the domestic markets for the most popular platforms are impressive, with some even dominating locally. It is easy to assume that Amazon has the power to conquer any territory it touches, but it is important to understand how Amazon’s top European competitors are finding ways to capitalise on spending habits across the European Union.

ALLEGRO:

Founded: 1999

Country of origin: Poland

Sells: Electronics, groceries, beauty, books, home goods, kitchenware, clothing, baby items, sports equipment

Consumer base: 14 million (active)

Allegro is currently the fifth most popular e-commerce platform across in Europe. This is particularly impressive when considering that 95% of its users are found within Poland, a country with a population of just 38 million people. Such is their sway that the term ‘Allegro’ has even become a synonym for e-commerce amongst Polish customers.

Allegro holds nearly 60% of the total e-commerce retail market in Poland, with a consumer base of 14 million people. It offers an impressive range of products, with the categories that hold the biggest market share being Electronics (62%), Home & Garden (74%), Child (71%) and Fashion (46%).

Mobile optimisation is particularly important in Polish e-commerce, with 35% of Polish users using their mobile phones to make an online purchase at some stage. Allegro’s mobile optimisation has been extremely successful, and the mobile app has been downloaded an impressive 6 million times.

According to surveys, 24-hour access to shopping and convenience are the top priorities for Polish e-commerce customers; 82% of people said this is what attracted them to online shopping over anything else. There are, of course, other important factors, such as low prices (62%), and more specifically lower prices than in physical stores (58%).

With Amazon slowly gaining ground in Poland, it certainly has the business model to cater to these consumer behaviours. But there is another reason why Allegro currently beats out Amazon as the most popular platform. Over half of Polish consumers stated that they prefer to shop on a domestic platform, and only 16% said that they use foreign e-commerce platforms to shop online.

Despite this, there has been concern from Polish consumers for the future of Polish e-commerce platforms, with the possibility of Amazon.pl being introduced in the near future. In fact, Allegro has even launched its own version of Amazon Prime (called Allegro Smart) in the hopes of maintaining its popularity in its domestic market.

CDISCOUNT:

Founded: 1998

Country of origin: France

Sells: Over than 9,000 partner merchants offering products in over 40 categories, including home goods, toys, furniture, baby items, sporting and electronics.

Consumer base: 8.6 million (active)

Unlike Poland, Amazon is still the dominant e-commerce platform in France - but Cdiscount is not far behind. Nearly 89% of the site’s user base is French, and one in three French e-commerce customers have purchased from Cdiscount.

As the name suggests, Cdiscount is a discount retailer, and is home to approximately 7,00 third-party sellers across numerous categories. However, cheap prices are not the only reason for Cdiscount’s success within France.

The company prides itself on its constantly evolving nature, both logistically and technologically. One example is its distribution centres: Cdiscount has a total of 10 centres covering three major cities, as opposed to Amazon’s 6. This allows for speedy delivery, including same-day delivery, which is currently in high demand.

Cdiscount is also at the forefront of using technology to advance its e-commerce tactics. Warehouse robotisation and drone deliveries are just some of the ways in which the company has managed to create a more efficient delivery process. Furthermore, Cdiscount has added an Augmented Reality Visualisation function to its mobile app, which shows customers what an item/appliance would look like in their home. Not only does this make the customer experience better, but it also increases customer engagement with the app.

Similarly to Poland, French e-commerce customers place a large amount of emphasis on trust when buying products online. As many as 40% of French shoppers have said they would not shop on a foreign website due to lack of trust. Although Amazon remains the most popular e-commerce platform in France for now, this could be an important factor as to why its popularity is still not as strong as in marketplaces such as the UK.

OTTO:

Founded: 2016

Country of origin: Germany

Sells: The site carries some 1.8 million items from about 6,800 brands in categories such as clothing, furniture, kitchenware, toys, household items and electronics.

Consumer base: 6.6 million people (active)

Amazon dominates in Germany, with net sales amounting to approximately 11 billion USD. However, Otto is the second-biggest e-commerce platform in the country, and claims to be the biggest online retailer for fashion and lifestyle products. Otto may not be a direct threat to Amazon’s position in Germany at the moment, but the site saw an increase in revenue of 10.2% between 2017-2018, amounting to a staggering 5.4 billion EUR in gross profits.

Although German consumers are far less attached to their home-grown websites (in fact, other than China, they buy more products from UK websites than any other country), trust, familiarity and security are still extremely important values for German e-commerce customers. This bodes well for Otto, which mandates that all new merchants have at least 100 products available and previous marketplace experience, and that all content be translated into German.

Otto also has a slight advantage over Amazon with regards to the varied payment methods that it offers. Although Amazon does offer an invoicing system to German and Austrian customers, this does not extend to any items bought through the Amazon.com marketplace. Being home-grown, Otto offers the invoice system to all its customers for any item purchased.

BOL

Founded: 1999; launched its marketplace in 2011

Country of origin: Belgium and The Netherlands

Sells: Holds nearly 16 million items in more than 20 categories, including electronics, toys, books, baby items, health and lifestyle products, jewelry and accessories, sports and leisure.

Consumer base: 8 million (active)

Within the Netherlands and Belgium, Amazon has managed to fall far behind the homegrown website Bol. Bol is the largest and most popular marketplace in the Netherlands, with net sales amounting to 1-1.5 billion USD. Amazon on the other hand sits in 8th place, putting it behind even Apple, which comes in 5th.

In Belgium (its second largest market), Bol sits in second place with net sales totaling 200-300 million USD. As with the Netherlands, Amazon sits far below homegrown markets in Belgium, at a lowly 6th place.

Bol operates under a very similar model to Amazon by selling directly to the consumer as well as offering a platform for third-party sellers. The reasons for Amazon’s lack of traction in this part of Europe seem to be cultural, with Dutch consumers specifically preferring to buy from local brands. Considering that Amazon only launched its Dutch platform this year (and so far, only provides e-book sales for Kindle), this could explain why Dutch consumers have been more inclined to favour Bol.

As in Germany, Dutch consumers also have a preferred payment method: the Dutch e-commerce payment system iDeal. This payment method now has a market share within the Netherlands of 57%, far ahead of either PayPal or credit card payments. This is not a service that Amazon can provide while it lacks an established Dutch platform.

Amazon’s place in European e-commerce

Amazon’s influence within Europe is undeniable, and it remains the largest e-commerce platform on the continent. Considering the majority of Europeans value speedy delivery, it makes sense that Amazon's Prime delivery service is very attractive to European customers. And while their new FBA service has provided some challenges with VAT payments, with Amazon now looking for over 1,300 fulfillment warehouses across Europe to improve its delivery speed even further, it is understandable that domestic, home-grown platforms are watching with trepidation.

However, Europe is not, and cannot be viewed as one single market. Cultural differences certainly play a role in Amazon’s lack of growth in certain countries. Many of the most popular e-commerce platforms within Europe have been attracting customers since the late 90s, far earlier than Amazon’s arrival into the European market. With consumers used to local e-commerce customs that are tailored to their home country (with features such as payment methods or returns policies), it can prove difficult for a giant like Amazon to adapt to such a diverse e-commerce landscape.