The Swedish eCommerce sector is growing rapidly. For 2015, HUI Research and Postnord forecasts a growth of 15 percent.
But the competition is fierce. Market’s assessment of 80 pure-players within eCommerce (Market 1-4/2015) shows that approximately for the third of the companies the sales decreased and they made a loss last financial year. For the smaller pure-players it is even tougher.
What will happen when the giant Amazon enters the Swedish market? Probably the same what happened when Zalando entered Sweden: the margins are lessened and the price of traffic goes up. Something that probably leads to small online stores having to close down.
Smaller online stores will have no choice but to sell their goods through Amazon because it provides traffic. However, what many do not know is that Amazon uses all connected stores statistics to evaluate which products are selling well and then bring them into their own product range - at a lower price. Add to that Amazon's accessibility and service, and it is easy to understand that they can break an eCommerce market. In the long run Amazon's entry may lead to a narrower offering which will affect the consumers.
One way to protect yourself is to have a strong brand and a clear niche. Building a brand is not easy and takes time. But everyone can determine what distinguishes themselves from the competitors, and based on that position themselves as an industry expert with the greatest expertise or have the best offering within a narrow niche, or why not aim to be the one with the best customer service.
A well-functioning eCommerce site is also vital when Amazon gives almost no room for individual customization. We at Vaimo have met clients who have been forced to a rapid site development at a record pace, when large and financially strong foreign competitors establish themselves locally, in order to not completely fall behind.
To be able to have a choice the day Amazon enters the scene, e-retailers have to start to position themselves. It is not too late yet!
(The original article in Swedish was published on Marketer.se)
David Holender, CEO at Vaimo