The Structure of eCommerce Overseas

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Chris Jones

Author: Chris Jones, Independent Multichannel Retail Consultant


Marketplace dominated countries: a challenge?


In IMGR’s comprehensive guide to all things international – A Nation of Shopkeepers – we took a look at one way in which the structure of ecommerce might be different in various countries: the prevalence of online marketplaces and platforms1:


eCommerce Worldwide Cross-Border Structure of Overseas eCommerce Graph


For British retailers and brands used to selling through their own websites, with full control over the brand-experience they offer, using marketplaces can be off-putting. Back home they are traditionally regarded as, at best, clearance channels, and at worst, places to avoid.


In reality, the brand-integrity possibilities offered by these platforms varies considerably: Tmall in China offers the possibility of building an almost fully branded customer experience for example, with only limited links exposing shoppers to competitor brands or, worse, discounted versions of your own brand… or, worst of all, fake versions of your own brand. At the other extreme, Allegro is rather less sophisticated.


At our September eCommerce Worldwide event, we heard the CEO of M&M Direct, Jonathan Brown telling us that he had decided to stop using marketplaces as a channel in Poland. Given that M&M Direct is itself essentially a clearance-store, this puts the challenge in a particularly clear light!


So if you aren’t attracted by tackling a country via a marketplace, what about the other option: your own website?


Pure-play dominated countries: an opportunity


There is, in fact, another way in which the structure of ecommerce can be different to that familiar to UK brands and retailers – the dominance of online pureplays.


The UK is actually quite exceptional in this respect. OK Amazon is here, and is big, but it doesn’t dominate online retail in the way it does in the US. But apart from Amazon, the top online retailers are mostly true multichannel players.


eCommerce Worldwide Cross-Border Top Online Retailers


Compare this with Germany, where the top online stores are basically all pureplays2 (even those listed as multichannel are not really retailers in the traditional sense).


eCommerce Worldwide Cross-Border Top Online Retailers in Germany


In general British high street retailers got on top of the changes that online retailing brought early on. In Germany, by contrast, there was a more conservative (some might say heads-in-sand) view, which means that German retailers are now playing catch-up. Even if you extend the top 7 in the slide to the next few, many of the names are international brands such as H&M.


There are some definite advantages for British retailers in this structure. The most obvious is that Germans are more prepared to buy online from someone who doesn’t have local stores. As an obvious corollary, although Germans increasingly like to click-and-collect, they don’t expect to collect from a store, preferring lockers3.


eCommerce Worldwide Cross-Border Collect locations in UK and Germany


Similar comments could be made about other European countries, such as France, although the situation there is less stark than in Germany.


However, site names like “” = “cheaper notebooks”, or the French number 2 online player “” do point to another less helpful consequence: ecommerce is still, to a significant extent, seen as primarily a channel on which to seek bargains.


Nevertheless this structural difference does represent a window of opportunity. Few UK retailers would willingly write in their 2014(!) annual accounts, as the top German consumer electronics store group Media-Saturn did last year, that “critics frequently say that especially [the] online business has some catching up to do.”


Beware, however, of the window closing quite quickly. In the rapidly developing online markets of Western Europe and Australia, the situation mirrors that in the UK just a few years ago. Between 2008 and 2011 the overall percentage of online retail from pureplays shrank from 59% to 49%4 in the UK, and this trend has continued. There is every expectation that other countries with highly developed brick-and-mortar retailing will follow the same trend.


In short, in such countries, the best recommendation is carpe diem!


1 - Data source (except UK): Nyenrode Business University et al, 2015.
2 - Source: EHI Institute.
3 - Source: IMRG’s bible on the topic of click-and-collect - IMRG Collect+ UK Click & Collect Review 2015.
4 - Experian: “The Changing Face of Retail in Today’s Multichannel World”, 2011.

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