Amazon is now the world’s most valuable company
The e-commerce giant has, after several years of significant growth, overtaken the top spot as the largest publicly traded company in the world.
With this leap, it surpasses tech giants like Apple and Microsoft and can boast a value of 5 trillion Danish kroner. This is an almost unimaginable amount – to put it in perspective, Denmark’s entire GDP in 2018 was 2.4 trillion kroner! It is this enormous capital, combined with an outstanding business acumen, that the company brings when entering new markets.
One of the biggest reasons for Amazon’s success is their robust business model in combination with their understanding of the market and consumer behaviour. Amazon makes optimal use of its extensive customer database by analysing purchasing patterns and targeting products directly to individual consumers.
Whether you are planning to collaborate with Amazon or not, you might see this as either a threat or a golden opportunity. Whatever your stance, it is crucial to approach it correctly to avoid costly mistakes. Find our best advice on choosing the right Amazon agency here.
In this article, we will address the following topics:
- Amazon is making waves and heading for Denmark
- Should you compete – or collaborate?
- Do you need help getting started?
Amazon is making waves and heading for Denmark
In recent years, Amazon has entered several new markets, both commercially and geographically, and has now established a strong presence across most product categories. In the countries where it operates, Amazon has captured significant shares of existing e-commerce, often with detrimental effects on businesses that have been unable to keep up with developments.
Currently, Amazon accounts for about 2% of online trade in Denmark – despite not yet officially entering the Danish market. However, rumours have long suggested that Amazon’s entry is imminent.
Amazon’s focus is on offering the largest selection of products in every category, which is why all industries should pay close attention and recognise the competition Amazon brings.
As shown in the graphic above, there is no doubt that Amazon’s arrival in Denmark will have a significant impact on Nordic e-commerce. According to consultancy Boston Consulting Group, Amazon could end up taking as much as 20% of Danish e-commerce within the first five years if developments mirror those seen in other European countries. [1]
Logistical superpower
Logistics is one of Amazon’s absolute strengths, and Amazon Prime Delivery can in some areas offer delivery in as little as two hours. However, Amazon has just renewed their contract with PostNord for a further three years, so it is not expected that Amazon Prime Delivery will be available in Denmark for another 3-4 years. Danish online businesses therefore still have some time, but it is already worth considering how you can offer faster delivery to better compete.
But should you – and can you – actually compete with Amazon?
Should you compete – or collaborate?
Whether you should fight against or partner with the world’s largest marketplace is a question you will need to address sooner or later. And your answer may be crucial to your company’s survival. According to Emil Stamp, Principal at Boston Consulting Group, producers and brands are best served by collaborating, while retailers should prepare to compete.
Brands and manufacturers should collaborate
Especially for brands with unique products or smaller manufacturers, working with Amazon can open up enormous opportunities and might be just what your business needs to accelerate growth.
One of the biggest advantages of working with Amazon is the possibility of letting them handle warehousing, shipping, returns, and more. If you are a smaller manufacturer, you may be spending a lot of time on packing, shipping, and handling returns – time that could be better spent developing your business. By letting Amazon manage packing and delivery, you avoid the need for extensive warehouse capacity, and your products can reach customers at a speed few small online shops can match.
Read more about the three ways to sell through Amazon here
With 340 million users – all potential customers – small businesses have the chance to reach a much wider audience and quickly enter new markets.
Retailers must compete
If you are a retailer, there is a genuine risk of being outpaced by Amazon in terms of product range, price, and delivery time. Therefore, you should already be considering what your business can offer that Amazon cannot. Can you leverage your local expertise, or provide a level of service that goes beyond the purchase itself? In short: what is your unique selling point if you can no longer compete on product or price?
Do you need help getting started?
If you are unsure about the right strategy for your business, we are always ready to offer advice and guidance.
At WeMarket, we have already helped several businesses launch on Amazon and have the expertise to guide you safely and smoothly through the process as well.
Read more about how we can help you here or contact us for a no-obligation conversation.
You may also be interested in:
– What does it cost to sell through Amazon?
– Wild, wilder, Amazon!
– Amazon is coming to Denmark – for better or worse
[1] https://www.dr.dk/nyheder/penge/klar-til-amazon-effekten-verdens-mest-vaerdifulde-virksomhed-kan-vaere-paa-vej-til
