Will Amazon concur the Dutch E-commerce market? An interactive thread.


amazon vs. bol.com

Will Amazon concur the Dutch E-commerce market? An interactive thread.

International tech giants like Google, Facebook and Amazon have extended their reach and influence successfully on a global scale, hence disrupting and changing industry structures and dynamics. Also the Dutch market is familiar with this trend. Surprisingly, though, in contrast to successful Dutch market entries of Google and Facebook, Amazon has not made any meaningful difference yet and remains focussing on selling e-books only. This made me wonder what holds back such a big conglomerate and more importantly; how high are the odds of Amazon disrupting the Dutch E-commerce market in the future?

The 2015 Dutch e-commerce market is dense with over 45.000 online stores and contains financially strong (in Dutch terms) market leaders like bol.com (Ahold), Coolbue, Wehkamp and Marktplaats. Additionally, the Dutch market with its unique language is only a small fish to capture in the global e-commerce market. Yet, the revenues grow steadily by 20%+ each year, which makes the Dutch e-commerce market interesting to enter for international corporations with a better financial position and larger product portfolio, like Amazon.

When Amazon decides to enter a market, it is known for its fierce low-pricing strategy to weed out competitors while simultaneously forcing margins to shrink on the side of the suppliers such as publishers. In Europe it is already one of the most, if not the most, dominant player in the market by being market leader in the U.K. and Germany.

Concerning their Dutch entry, there is a second interesting development namely that Amazon opened up a Dutch office to “support their cloud services”. Currently there are 19 vacancies open and more are to be expected. So with Amazon’s new Dutch office and recently introduced e-books business, opening up their entire web shop sounds like the logical next step. Unsurprisingly, Amazon has been asked the question if and when they will fully enter the Dutch market and their answer might not come as a surprise to most of you by stating: “We will enter when we think the time is right”.

So therefore the questions that I raise are:

  1. What do you think that will happen in the future, will Amazon concur the Dutch e-commerce market?
  2. If yes, what can the Dutch e-commerce players do to higher Amazon’s burden to entry and to increase their own chances of survival?

I will post my thoughts later on as well, so let’s make this an interactive thread!

Sources:

Entry Amazon Dutch Market

http://www.maeur.nl/blog/amazoncom-enters-dutch-market

http://nos.nl/artikel/2030802-amazon-opent-kantoor-in-nederland.html

http://nos.nl/artikel/2002682-komst-amazon-baart-uitgeverijen-zorgen.html

http://nos.nl/artikel/2003328-webwinkelreus-amazon-ook-in-nederland.html

http://www.amazon.jobs/location/netherlands

E-commerce figures

http://www.marketingfacts.nl/statistieken/channel/e_commerce

http://www.marketingfacts.nl/statistieken/channel/e_commerce

http://ecommercenews.eu/ecommerce-per-country/ecommerce-the-united-kingdom/

http://ecommercenews.eu/ecommerce-per-country/ecommerce-germany/

Author: Roeland Diks, 357272

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2 responses to “Will Amazon concur the Dutch E-commerce market? An interactive thread.”

  1. jurgenlangbroek says :

    As someone who works at Coolblue I’m somewhat biased, so keep that in mind while reading the rest of my reply. I have given this some thought before, and I think one of the reasons for the tough market entry is because of the high standard of customer service and delivery. If Amazon wants to capture the Dutch market they will have to compete with free next-day delivery and fluent Dutch customer service. In addition, both Bol.com and Coolblue are doing a lot of effort in marketing, especially on social media.

    Amazon would need very low prices to compete with these two e-commerce companies, as that is the weakest point of both Coolblue and Bol.com. Both companies are local, so lack the economies of scale that Amazon build up over the last years. Another approach would be a local strategy, opening up a dutch warehouse to compete on delivery times and investing heavily in local marketing. But this has the potential to increase the prices of the products, to the point where it is no longer profitable.

    The Dutch companies should further improve customer service and delivery standards to stay ahead of Amazon, as the shipment costs are one of the reasons Amazon is perceived as expensive and less customer friendly. In addition the companies could look into competing with other services of Amazon, as Ahold has done by buying Bol.com to combine groceries and consumer goods.

    • 357272rd - Roeland Diks says :

      Interesting comment and I definitely agree that both Coolblue and bol.com need to increase their service level in order to increase the boundaries to entry.

      The price sensitivity of Dutch customers is an interesting research topic in that perspective. If the price sensitivity namely is high to the extent that a customer is willing to wait longer for cheaper products, than Amazon has a solid chance to enter successfully. Amazon would then namely be able to ship their goods from Germany to the Netherlands for example, which requires relatively less investments and would not drive the prices up dramatically.

      However, right now mostly above-average earning individuals are ordering online who have a low price sensitivity as they regard customer service and delivery to be important.

      So in order for an Amazon entry to succeed, a change of mind-set is necessary as much more Dutch citizens should start shopping online. Or would Amazon himself enable this change, by means instant aggressive pricing? We shall see!

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