Amazon builds up its European marketplace

April 30, 2015 09:00 PM

Cross-border e-commerce is only very slowly taking shape in Europe’s mostly national online retailing markets—only 15%, or 34.7 million web shoppers, out of 231 million web shoppers—shop online across national borders, says trade group Ecommerce Europe.

But, No. 1 in the Internet Retailer 2014 Europe 500 and No. 1 in the 2015 edition of the Top 500 Guide is adding retailers to its marketplace and seeing more European consumers shop online across national borders.

In the past year Amazon says that businesses selling on the marketplace sections of its European websites in France, Germany, Italy, the Netherlands, Spain and the United Kingdom generated total sales of 2.80 billion euros ($3.08 billion). Amazon didn’t share figures for the prior year or disclose other numbers, such as how much marketplace sales represents of its total European sales.

But Amazon says years of building up its fulfillment and distribution network in Europe, a localized approach to different European nations, and e-commerce technology features such as one-click checkout have helped build its European marketplace business. Amazon now has 28 fulfillment centers across Europe and offers across much of Europe Amazon Prime, its subscription fulfillment service that features free two-day shipping and other perks such as free digital entertainment streaming.

“Amazon has approached Europe as a single market since we launched here more than 15 years ago,” says Amazon director of European Union seller services Francois Saugie. “European businesses are able to sell on any of our websites, to any customer, anywhere in Europe.”

While not disclosing specifics, Amazon says its European marketplace is growing because it offers outside merchants such services as Fulfillment by Amazon, where Amazon warehouses goods and handles fulfillment, as well as customer service localized for various European countries. “We operate marketplaces in five different languages with over 100 million products, and ship products to customers across the EU from 28 fulfillment centers—both for Amazon and on behalf of our sellers,” Saugier says. “European businesses are able to sell on any of our websites, to any customer, anywhere in Europe and many of these businesses are using Fulfillment by Amazon, which means they simply send their inventory to one of our fulfillment centers across Europe.”

Amazon was one of the first U.S. web merchants to develop a European e-commerce base. Amazon, which began selling online in the United Kingdom and Germany in 1998, generated Internet Retailer-estimated European web sales 13.60 billion Euro ($18.82 billion). Internet Retailer will publish fully updated numbers for Amazon and other merchants in the 2015 edition of the Europe 500, scheduled for publication in a digital and database edition in June.

Numbers on just how much of the all European e-commerce sales happen across borders is hard to measure—last year all e-commerce sales across Europe grew by about 11.1% to 410 billion euros ($453.04 billion), says Ecommerce Europe. But driven by factors such as younger shoppers using their web-enabled mobile devices to shop for goods across Europe, cross-border e-commerce will grow over time, Forrester analyst Michelle Beeson says.

“European online cross-border purchasing is happening, but, with almost a quarter of European online adults buying cross-border, it has not yet reached a critical mass,” Beeson writes in a recent Forrester report. “But online cross-border buyers continue to be desirable consumers, as they outspend other online buyers.” Based on 2013 data, Forrester estimates European consumers who buy from websites in other countries spend on average 337 euros online every three months, versus 228 euros for other European web shoppers.

Saugie says Amazon’s diversified customer service, fulfillment and e-commerce technology platform will keep its European marketplace sales growing.  “Amazon enables tens of thousands of businesses in Europe to sell their products to Amazon customers,” he says. “Increasingly, these sellers are reaching customers living outside their home countries.”




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