2015 Will Be a Very Interesting Year for Dutch Online Retail

After years of speculation Amazon.nl finally went live. In 2011 we reported on Amazon’s international European expansion. Back in those days Italy and Spain were considered larger markets offering more opportunity for Amazon. In the Netherlands, Amazon will initially start selling 20.000 out of 35.000 existing Dutch e-book titles, and of course its 3 million other e-book titles. No plans or dates have been revealed for selling physical books and other products.

AmazonThe Dutch web shop market is currently dominated by Ahold (bol.com), RFS holding (Wehkamp, Fonq.nl), Zalando, Coolblue and Thuisbezorgd. However, Thuisbezorgd specializes in food delivery while Wehkamp, Zalando and Coolblue focus on physical products. Amazon’s first and largest competitor is therefore bol.com. bol.com has made great progress as an online book retailer and after its takeover by Ahold became the number on-line retailer with a total online revenue of € 686 million in 2013. But although bol.com is by far the largest e-book reseller it’s marketshare (currently 60% according to bol.com) is steadily dropping in favor of Dutch book retailers Bruna and Ako, and also to Kobo and Apple. For bol.com this has not yet been translated in diminishing sales because of the rapid growth of the Dutch e-book market. According to the Centraal Boekhuis some 7 million e-books will be shipped this year representing 5% of the total sales of books. Next year e-book shipments are expected to reach over 10 million copies. Amazon, which already ships over a million and a half parcels to the Netherlands, has set eyes to a much larger piece of the Dutch online retail pie. Preferably a piece that resembles the one it has in the DACH countries (German, Austria and Switzerland) where it is by far the largest web-shop.

In a fast growing market there is room for many web-shops but Amazon is in a league of its own. Most Dutch web shops should be worried, not just bol.com. Even though Amazon’s arrival did not come as a surprise, giving web-shops ample time to prepare, it still remains to be seen if they can continue business as usual. bol.com is ready: it has copied almost everything from Amazon’s business model including much of the site interface and structure and its affiliate and sell-through program. It can also rely on the business and logistics infrastructure of Ahold. However bol.com is not known for their aggressive pricing. The other Dutch top web-shop players such as Wehkamp and HEMA should be worried as when Amazon starts selling similar retail products. They can’t match Amazon’s scale of operations. Coolblue and Bas Group (dixons, iCenter, MyCom) are electronics specialists and are strong brands. But Amazon has proven it can competer inthismarket as well with its sell-through program. Zalando and H&M are into fashion and clothing which puts them outside the red zone. The same goes for the other top-10 web-shops (KPN, Ticketmaster and Thuisbezorgd) whose products and services fall outside Amazon’s scope.

Amazon’s arrival will change the Dutch e-commerce landscape. Their scale and mature e-commerce business model will cause many small web shops to sell products through Amazon.nl. The Dutch web-shop community still has some time left before Amazon goes all out with its retail product offerings. As for the e-book landscape: it will be interesting to see what will happen to Dutch e-book pricing. Amazon made clear that publishers and authors can decide on the e-book price. Apparently it does not want to pick a fight with the publishers straight away. This makes sense since they do not yet have the footprint they have in other countries. But as they grow their Dutch business they may change that policy and lower e-books prices as a leverage for selling more other products. For Dutch authors Amazon.nl could also serve as a publishing alternative to the existing traditional publishers platform. 2015 will be a very interesting year for Dutch online retail.