Amazon’s launch in Sweden six months ago shook the industry. But what happened next? Not much turns out, but experts warn against calculating the investment.
At the end of October, Amazon was established in Sweden. Prior to the launch, there was speculation about tougher competition in e-commerce with tight margins and lower prices. But also great opportunities for third-party sellers to establish themselves and expand their market.
After launch, it became strangely quiet about the e-commerce giant. According to Google’s search analysis tool, the interest among Swedes was greatest on the day Amazon was launched, and the price comparison site Pricerunner has so far seen no price changes since its inception, says CEO Nicklas Storåkers.
– It has not left any mark. So far, I would say that there has been quite a lot of pancake of it all. When we look at the most popular products in Sweden, they have only an extremely limited share and not good enough prices to want to shop with them.
Started with books
Amazon once started as an online bookstore, and before launching in Sweden, there was speculation about the future of Swedish online bookstores. Bokus, which together with Adlibris is dominant in the online book market in Sweden, has also not noticed any difference since Amazon entered the market.
“Sweden differs from other markets where Amazon has entered. Here, the online bookstore was already in 2012 about the physical bookstore as the largest channel. We follow them just like our other competitors “, writes Bokus CEO Maria Edsman in an email.
At the same time, several Swedish companies were quick to start selling via the platform – among them were the home furnishing company Lagerhaus, which chose not to comment on its sales on Amazon, and the e-commerce company Ellos Group.
“We see that sales on Amazon are an opportunity to reach new and more customers with our offer. Selling on other platforms is part of Ellos Group’s strategy for increased growth,” writes business development manager Alexandra Dornérus in an email.
Despite the initially cool interest, the industry organization Svensk Handel sees a certain interest in Amazon among its members and chief economist Johan Davidson believes that it will grow as the company develops.
– The Swedish market is already quite mature and competition is high, with small margins and low profitability. This means that it has been difficult to see that Amazon would quickly take a lot of market share. But I belong to those who believe that Amazon will eventually become a strong and challenging competitor, precisely because of its size and its ability to push even a little more in already low prices, says Johan Davidson.
“Know his niche in Sweden”
Anna Nordlander is a consultant and Amazon expert who has followed the company for over ten years.
– I think the shockingly bad launch should not be read too much into. The Sweden launch follows a fairly common pattern for how Amazon enters new countries. When they think they are good enough to offer something of value to the end customer, you press “play” and sort things out as you go, says Anna Nordlander.
A lot needs to be in place, she continues. Amazon’s competitive advantage is based on its “Prime” subscription service, which includes music and movie streaming as well as free shipping and fast delivery. The logistics are not there yet, but according to a report from the consulting company Boston Consulting Group (BCG), the platform offered around 150 million different products in Sweden at the turn of the year.
– We are already used to fast and free delivery in Sweden. What we are not used to, however, is the concept of “everything store”, and it is very clear that Amazon has it as its niche here, says Anna Nordlander.
Carl Helgesson, CEO of Amazon agency Rankona Mazon, reckons that a lot will happen for Amazon already this year.
– We will see a more finished product during the year and if you look at the long term, Amazon will take a strong position in Sweden, I am completely convinced of that. For those who want to sell on Amazon, we are right now in a window that will never come back. I hope that many Swedish companies take advantage of this, he says.
The company was founded in 1994 by the entrepreneur Jeff Bezos and is today one of the world’s most highly valued listed companies.
In 2020, Amazon had sales of $ 386 billion, compared to $ 280 billion in 2019.
Amazon has local websites in 20 countries. The largest markets are the United States, the United Kingdom and Germany.