Otto aims to expand its marketplace offering within the EU. The German distance-selling icon announced this alongside its annual financial results. In the fiscal year 2023/2024, Otto’s revenue decreased by 8 percent to 4.2 billion euros. 

This performance was “still well above market comparison,” Otto says, referring to figures from the Bundesverband E-Commerce und Versandhandel Deutschland (bevh), which noted an 11.8 percent decline and described 2023 as a “low point” for e-commerce in Germany.

In its press release, Otto highlights the positive development of Gross Merchandising Value (GMV), which increased by 2 percent to 6.5 billion euros. “The slight increase in Otto’s platform sales, despite the ongoing crisis atmosphere in retail, makes us cautiously optimistic,” says CEO Marc Opelt. He previously referred to the platform model as the “key growth engine” of the online department store.

Otto bets its expansion on ‘marketplace partner alliances’ 

Otto expanded the number of marketplace partners by 33% to over 6,500 during 2023. Together, they accounted for one-third of the revenue on the shopping platform. Despite the long and growing distance in terms of revenue on Amazon, Otto claims it is “very well positioned” with German marketplace sellers. “Now we are preparing to open it up to European marketplace partners.” 

Initially, Otto will connect warehouses of German marketplace sellers in other European countries to its platform. Starting next year, marketplace participants from other European Union member states can also offer their products on Otto’s platform. Currently, a German VAT number is required for this.

How will sellers be selected? 

Opelt indicates that Otto has deliberately chosen the European perspective: “We rely on products that meet the highest quality and sustainability standards. Therefore, we carefully select who may sell their goods on our marketplace – and who may not. In the future, cheaply produced disposable items will also not play a role in Otto’s business model.”

‘We carefully select who can sell on Otto, and who cannot.’

From summer onwards, Otto will open its marketplace to additional product categories, including dietary supplements and energy technology.

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Zalando, one of the largest e-commerce fashion platforms, was planning to launch in the U.S. next year with an estimated investment of over a hundred million euros. However, current financial results have delayed the plan.

Zalando called its American expansion ‘project Kangaroo’ and it had a headcount of over 100 employees already working on the project. 

The company wanted to launch in the wealthiest regions, starting from the northeastern states, such as Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. 

A slow year for Zalando

The main reason to put the project on hold was the poor financial situation that Zalando reported at the end of the Q1 of this year: with a total revenue of 10.4 billion euros, Zalando decreased its global revenue by 1.5 percent. 

It might not seem as much of a decrease, but the fact that Zalando reduced its global revenue, instead of increasing it, poses a heavy blow for the company and a clear warning that the e-commerce boom is finally over. 

Additionally, its market capitalization decreased from 26.35 billion euros by July 2021 to 9.4 billion in May this year.

The end of the e-commerce boom?

As reported to media and investors, between January and June 2022 Amazon posted a loss of 20 cents per share versus the 13 cents per share analysts had expected, a drop after posting net income of 15,885 million in the same period of 2021. And despite this, expectations and the investment market have received the figures as positive news. And why is that?

The accounts include 3.9 billion loss from Amazon's investment in Rivian Automotive, an electric car manufacturer in which it has an 18% stake, which it has not been able to offset with the rest of its businesses, since, excluding this operation, the firm would have made a profit of 1.9 billion dollars. This is the main reason why the market has not taken the losses negatively.

The post Zalando won’t expand into the U.S. ... for now appeared first on Cross-Border Magazine.

India is often described by companies in three words: poverty, bureaucracy and corruption. Conclusion: stay away. Wrong. This extremely simplified view of India can seriously harm the future of your business.

Infographic  provided by Ecommerce Foundation

It is undeniable that poverty, bureaucracy and corruption are part of the Indian business environment. However, these same three evils do not prevent most companies from doing business in Brazil, Russia and China, right? And while the other BRIC countries struggle with stagnating growth, the Indian economy has only been gaining momentum in recent years. Indeed, Dutch financial daily Het Financieele Dagblad sent out a wake up call this spring, urging businesses to finally take India seriously.

The esteemed newspaper admitted it had been part of the problem itself. The negative, and often missing press coverage of the Indian subcontinent has seriously clouded the enormous business opportunities in India, concluded Het Financieele Dagblad. Whether you like it or not, India will become the largest consumer market in the world by 2050. Larger than the US and China, according to The Economist. So every company that cares about its future business, should take some time to explore the Indian market. Considering the fact that building relationships takes time and is crucial for success in India, this exploration should start sooner rather than later.

Most multinationals have known the importance of India for decades. Philips, Siemens, Unilever, Heineken, TomTom, Elsevier, AkzoNobel and Shell have all been present in India for years. And not just to outsource their IT and other business processes. Philips has an inspiring innovation campus in Bangalore, Heineken is the largest beer vendor in the country, supermarkt chain Carrefour buys its grapes in India and Volkswagen is building its cars in automotive hotspot Pune.

The opportunities for SME’s in almost every sector are overwhelming. Companies with expertise in (sustainable) energy, smart mobility, water and waste management can offer their help in the construction of over 100 smart cities throughout India. Agricultural expertise is needed too: 40% of all veg and fruits currently rots away before it reaches domestic markets. Greenhouse builders, logistical solutions, cold storages, it’s all needed – and it is needed now. Also, retailers who are struggling in Europe can enjoy high growth in India. Hunkemöller, that opened its first stores in Bangalore and Delhi this year, is a great example. The retail chain expects to expand quicker than expected to twenty stores in various cities: its sexy lingerie is clearly selling well.

Or take the creative industry. Thanks to digitalization and the fast adoption of smartphones, this sector is growing at dazzling speed: TV-production house Endemol/Shine managed to become the biggest television producer in India within 10 years. Reality show Big Brother (in India called Big Boss) is already in its 10^th consecutive season. The popular show is screened in three different versions – all adapted  to regional languages and regional cultural context. Music festivals and live events are a huge growth market too. The worlds biggest festival for electronic music, Amsterdam Dance Event, just finished its first sold out edition in Mumbai.

Companies that complain about poverty, bureaucracy and corruption in India miss the bigger picture. While Europe fights economic stagnation and unemployment, European companies should more than ever look abroad for growth. To overlook India would be foolish.

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