Internet Retailing in France - New Market Report

Although not all operators in internet retailing in France agree on the efficiency of the online marketplace business model, ‘marketplace’ was the main buzzword in internet retailing throughout 2015. According to its supporters, the online marketplace enables online retailers to solve one of the major issues inherent in their channel, namely the lack of margins and low levels of profitability. Indeed, with online marketplaces, online retailers are able to charge commissions of between 7% and 25% whilst also avoiding the cost of maintaining an inventory of products in stock. They also represent an opportunity for companies to engage in faster diversification than usual, as illustrated by the activities of Darty in recent years. The company recently took the decision to develop an online marketplace for traditional toys and games, childcare items and home improvement products, with gardening products set to be added in 2016. Even so, diversification is point which is raised most often by the detractors of online marketplaces. These detractors tend to underline the risk of dilution of the initial positioning of online retailers that sell products different from their core business, with some pinpointing the mixed results of the online marketplaces of players such as PixMania and RueduCommerce.

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Competitive Landscape

The 14% value share and outstanding value growth recorded by third party merchants in internet retailing during 2015 demonstrate the extent to which online marketplaces have been increasing in popularity in recent years. However, with a value share of 8%, Amazon.com remained the leading player in internet retailing in France in 2015. The company’s success in France can be attributed mainly to its well-known strategy of offering an extremely wide range of products at very low prices. Amazon has also invested in its supply chain and warehousing in France in order to reduce delivery times and costs. In 2015, Amazon.com even managed to post the most dynamic growth in actual value terms in internet retailing notably thanks to its promotional operations. 15 July 2015 saw the retailer engage in its Premium Day promotion, which offered outstanding discounts to Amazon Premium members, beating all sales records with 700 items purchased per minute in France alone.

Industry Prospects

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