In Italy and other large European countries, such as Germany, France and the United Kingdom, Amazon is the largest, most important and well-known e-commerce company, with market shares that in some cases even exceed 30 percent. Elsewhere in Europe, however, Amazon's dominance is much less solid: in some countries because it has not yet arrived, in others because it is hampered by competing indigenous companies that are already very strong and active, as reported in an article by Sifted, an online magazine. which deals with technology in Europe created in collaboration with the Financial Times.
Amazon is one of the few e-commerce companies in the world to have a worldwide presence. It is dominant in North America, it is very strong in Western Europe and has a notable presence in the huge Indian market. It is also one of the largest companies in the world, with a market capitalization of approximately $ 1.5 trillion. But in Europe Sifted has identified several countries where Amazon has either not yet entered or is struggling to enter.
Among the first are the countries of Eastern Europe, where the absence of Amazon has allowed the development of very strong e-commerce companies, which for some time now have been making preparations in case Amazon decides to enter the their market. Among these is Allegro, which dominates the market in Poland, with 21 million registered users out of a population of 38 million. Amazon does not have a Polish site, but it still sells products in Poland, as does Aliexpress, the international e-commerce service of the Chinese company Alibaba. Despite this, Allegro has a very difficult market position to beat, also because over the years its brand has gained significant recognition. A similar argument can be made in Romania with eMAG, which holds 20 percent of the e-commerce market in the country and also has a strong presence in Hungary and Bulgaria.
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These companies know their markets and are well valued by customers. This means that in order to try to enter Eastern Europe and oust them, Amazon would have to invest heavily, hire a lot of people on site and build infrastructure – it might not be worth it, especially for markets that aren't that big or that rich.
These difficulties are present in Sweden, where Amazon opened the amazon.se site in October of this year. Sweden is a small market (it has 10 million inhabitants), a difficult one (the country is large, 50 percent larger than Italy, and partly included within the Arctic Circle) and already has numerous companies of e – thriving and very aggressive commerce. And according to analysts, Amazon has so far failed to live up to the effort it would take to conquer the Swedish market.
At the time of amazon.se's launch there were a number of laughable and embarrassing problems. The most cited by the media concerned the fact that the company would use an automatic system to translate its product catalog from English to Swedish, with often terrible results: on some products the word “cock” has been translated. with the Swedish word meaning “penis”; “Rapeseed”, that is rapeseed, has been translated as “rape”; «Switch», the famous Nintendo console, with «switch». Amazon made other trivial mistakes: for example, in the window to select the various national sites, it used the flag of Argentina to identify Sweden.
Almost 24 hrs after @amazon has launched in Sweden, something still does not add up here…. @ StatsmanBruno are you behind this ?? pic.twitter.com/D8ElxtS1wa
– Cristian Tamas (@ Trancez0r) October 28, 2020
If all these problems can be solved (but they indicate a limited investment in the country, especially machine translation), others are structural and more complicated: Amazon currently has only one warehouse in Sweden, with a rather limited capacity. This means that most of the products have to arrive from other European countries, taking a lot of time, sometimes even a week. For these reasons, among other things, Amazon users in Sweden cannot subscribe to a Prime subscription, one of the company's most popular and sought-after services. Amazon also had major problems with Swedish unions, which imposed strict conditions to protect workers.
This does not mean that Amazon will not be successful in Sweden – the company has enormous resources and potential. But its difficulties indicate that it is much more difficult to enter a new market today than it was ten or twenty years ago (in the UK and Germany Amazon entered in 1998; in Italy in 2010), when the e-commerce was a relative novelty and the companies that dealt with it were few and far between.
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Another similar example is the Netherlands, where Amazon decided to make an investment a few months ago but found an already structured and competitive market. The amazon.nl site has existed since 2014 but with a very limited catalog: only in March of this year did it begin to expand into categories such as electronics, fashion, home products and so on. The problem is that the catalog is still empty, and users prefer to shop on amazon.de, the German site, which has much more choice, or on the competition. In the Netherlands, many local e-commerce sites have strengthened in recent years, the most important of which is Bol.com, which recently expanded its catalog in part to counter Amazon.
Cases where native competition is managing to thwart Amazon's success are not just in Europe. If we exclude China, which with a closed market regulated by the government makes its own history, the most notable example is probably that of MercadoLibre, an Argentine company that has managed to become the leading e-commerce company in Latin America, expanding practically across the continent despite the presence of Amazon (and the Chinese Alibaba) in some of the same countries. According to Morgan Stanley, quoted by the Financial Times, in the last five years MercadoLibre has increased its market share in Latin America from 19 to 28 percent; Amazon in the same period went from 2 to 4 percent.
