In the Netherlands, amazon is ‘only’ the 7th largest online retailer. Its presence on the Dutch market has, for now, been modest in comparison with Germany, where it is market leader by great margins. However, there are some signs that amazon is looking to increase its market share in the Netherlands.
Previously, Amazon has translated over 2 million German webpages to Dutch in order to establish presence in the Netherlands and sales are around €230 million. Amazon has recently been building a 110.000 m2 distribution centre in Monchengladbach, which is just over the German border. Furthermore, it has introduced Dutch payment system iDEAL and has introduced its Dutch version of Prime Day.
In 2018, Bol.com and Coolblue had growth rates of respectively 30% and 40%. Question is if these Dutch retail giants should fear a possible new entrant. On the one hand, Amazon scale and marketing budgets would be very difficult to compete against. On the other, Amazon has an expensive image in Dutch market research, and consumers are not particularly trustworthy of the retail giant.
CEO Huub Vermeulen of Bol.com envisions that the future of bol.com is to function as a platform, where everybody can buy and sell products. Bol.com seems to anticipate the entry of international players as well as the rise of competitors as Coolblue. Amazon excels in the amount of data, logistic power and scale. They are able to serve a more complete customer journey, however they do not have the strong reputation as a pleasant business partner. If Bol.com wants to remain its leading position in case on an entrance, they should become the ideal partner of the sellers it can attract to its platform. What do you think? Will Amazon enter the dutch retail market? And how should current market leaders react to a potential entry?
References
https://www.privacyshield.gov/article?id=Germany-eCommerce
https://retailtrends.nl/news/53996/bol-com-blijft-de-grootste-webshop-zalando-terug-in-top-drie
https://www.logistiek.nl/supply-chain/nieuws/2019/06/bol-com-zet-volgende-stap-op-weg-naar-platform-101168602
https://retailtrends.nl/item/56980/bol-com-vs-amazon-gaat-de-strijd-nu-echt-beginnen-
https://www.dgoc.nl/amazon-in-nederland/
https://www.marketingfacts.nl/berichten/komt-amazon-naar-nederland
I am convinced that Amazon will eventually enter the Dutch market. Currently, they are already widely represented in the Netherlands in the cloud computing business with Amazon Web Services. Amazon has already enrolled Amazon Prime and it’s streaming services to the Netherlands. And as you mentioned, Amazon has translated their German website amazon.de to Dutch already in 2017. Personally I think these signs are a harbinger of Amazon trying to gradually enter the Dutch market.
The battle between retailers will probably be fierce. Given the amount of data that Amazon possesses and the cash flows it generates across different business units, they would win the battle. Amazon can easily lower their prices since they generate immense amounts of money from AWS and other business units.
Current market leaders should now focus on strengthening their brand and empower their current customer benefits. In this way, customers might still choose for the current market leaders instead of Amazon. Because in the end, it is the customers that decide who will be the market leader.
Hi Simon,
Thank you for your interesting post. I am totally sure that Amazon will enter in the Dutch market. The main strength of Amazon is its size, in 2017 it reported a revenue of $178 billion and in one year it has increased by 30.93% reaching $233 billion. In the American market it has been estimated that for every dollar spent online 0.43 cents are spent on Amazon. But its size and its economic power are not the only factors that will determine the success of Amazon in the dutch market.
What I strongly believe is that Amazon will enter and maybe win in the Dutch online retail market thanks to its strong focus on the customer satisfaction and experience. Amazon has developed during the last years a series of products such as Dash button and Echo which not only are focused on making their customer’s life easier and in some ways strictly related to Amazon but they are also really far from the “newborn” Amazon which was limited to selling book at first and then also other products. Amazon is in a constant and continuos evolution process in which the royal road is the customer experience and its loyalty.
The Dash Button are an example of this “customer-centric”. With the Dash button technology every person could easily order different products ( according to the type of button that he/she had bought, there are button for trash bags, detergent, and much more) by just clicking a button without the need of connecting to the website, making the buying process way easier and direct.
Now the buttons are gonna disappear because its functionalities will be easily replaced by Echo, the new home-assistant created by Amazon. This assistant will allow Amazon to literally enter in the house of its customers, that will be fundamental for further understanding and broadening its knowledge about customer’s habits and needs.
Finally, the online shop which is tailored for every single customer, according to his/her evolving needs, it advices the customers new products that he/she may like ( and maybe he/she does not know), it has a clear and straightforward buying process ( which includes the one-click buying functionality), and last but not least it has the best Customer Service which is not only always on the side client but it is accessible in several methods ( email, calling, live chat etc..) and it is extremely efficient.
Nevertheless, I believe other competitors could still remain on the market. For doing so, each company should focus on its strength and it should avoid to either copy or challenge Amazon on its main assets. A research has shown that Bol.com is seen as more trustworthy, it evokes more positive emotions among consumers; thus improving this relatonship with the customers and differentiating its range of products from the one of Amazon will allow Bol.com and other competitors to compete in this market. Finally, all the already existing actors in the online retail market should prepare in advance to the entrance in the Dutch Market of Amazon because of its great amount of resources, data and range of products which make its entrance disruptive for an unprepared market.
https://www.retailintelligencelab.com/blog/2018/5/23/how-can-bolcom-survive-the-amazon-threat
https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenue
https://www.bloomamsterdam.com/2017/08/22/amazon-coming-to-netherlands-we-better-get-ready/