On 10 March 2020, the largest e-tailer in the world, Amazon, was officially launched in the Netherlands. This meant the final step for the American retail giant in a long-speculated intention to conquer the Dutch market, a process that lasted almost six years. How will it position itself in the country and the hearts of the Dutch?
Just making “.nl” official
The Amazon launch in the Netherlands was made official by launching its Dutch domain name – Amazon in practice already served the Dutch market for years. Dutch consumers could shop through amazon.de in Germany, while the .nl domain until now offered only ebooks and Kindles. Just last year, the brand received more than three hundred million euros from the Dutch market, and its customer service has been available in Dutch since 2016.
The difference is that now, its virtual (and physical) shelves have millions of products from the distribution center in Germany available for the Netherlands. And it seems it’s just a matter of time before the American webshop opens one in the Netherlands.
During this long process, Amazon began focusing on the Dutch market with baby steps. These included a translation for every product page from German into Dutch. Also, it added iDeal as a payment method, and made Amazon Prime Day available for the Netherlands since 2018.
Now, with its official launch, it’s clear that these investments by Amazon in the Dutch market paid off well.
What about Dutch webshops?
The Dutch e-commerce segment, which includes major players bol.com, Coolblue and Wehkamp, has to welcome a new competitor into the game. Will this be a pleasant addition or a complete disruption for the sector?
With $240 billion in revenue in 2019, a gross profit of $14.5 billion, 800,000 employees, a global distribution network including its own airport, and a fleet of Boeing cargo planes, Amazon’s business power is enormous. Its dominance is so apparent that the question on everyone’s minds is how big of a threat it poses to national webshops in the Netherlands.
But Amazon comes in peace, and wants to lead by example. “We are not going to demand exclusivity from suppliers, for example; producers can continue to sell their items through bol.com or others and also display them in our shop,” said Alex Ootes, the Dutchman overseeing Amazon’s expansion into Europe.
Amazon even offers an option to other companies to use their platform and reach other markets. “Dutch companies can tap into new markets by selling their products elsewhere in Europe through us.”
Right now, bol.com is dominant in the Dutch market, but on opening day, the American retailer started off the battle with heavily discounted electronics. This disruptive discount strategy forced bol.com to lower its prices to be able to compete with the international billion-dollar company.
Yet, recent polls show that Dutch customers do not necessarily go to Amazon for the price, as they still consider the American website to be expensive. Ultimately, they find bol.com a trusted marketplace, and therefore it’s expected that bol.com will remain more popular than Amazon.
Another significant advantage that bol.com and Coolblue maintain is their excellent customer service, as well as their service points in the physical world. So, Amazon has to up its added value in this regard if it wants to be a real competitor in this race.
Things seem so uncertain right now that predictions and actual outcomes may surprise everyone in the future; with time, it will become clear what position Amazon will acquire in the Netherlands.
The webshop in times of COVID-19
The current business climate under the worldwide corona virus regulations has had its effects on webshops. Now that busy places like restaurants are closed, and people are generally on lockdown, most of the economy relies on companies which offer gaming, video and movie streaming, as well as meal deliveries.
The current situation has increasing demand for the services Amazon provides, such as ordering groceries online, which means a higher number of employees is needed to handle these requests. This has seen Amazon hire a total of 100,000 temporary workers. The American retailer is specifically targeting people from the hospitality, travel and entertainment industries, which are suffering the biggest hit to their regular jobs. “We want to let these people know that they are welcome to join us until life returns to normal, and their previous employers can take them back,” said Amazon.
The online department store giant is temporarily raising its minimum salary to $15 an hour, which will cost the company an estimated $250 million worldwide.
Edition 10 April, by Bárbara Luque Alanis