Thanks to Corona: Amazon is expanding its power in the retail sector

Published on: May 27, 2021 / Updated on: May 27, 2021 – Author: Konrad Wolfenstein

Thanks to Corona: Amazon expands its power in retail – Image: Kraft74|Shutterstock.com

Thanks to Corona: Amazon is expanding its power in the retail sector

The online retail giant Amazon is further expanding its strong position in German retail during the coronavirus pandemic. As the graphic based on data from the German Retail Federation shows, its share of online retail sales in 2020 already reached 53 percent (Amazon's own stores plus Marketplace). This represents an increase of five percentage points compared to 2019. Amazon's share of total German retail sales now stands at 6.7 percent.

Approximately half of the goods people buy on Amazon don't come from Amazon itself, but from smaller retailers. These retailers pay Amazon a monthly fee for the right to use the digital marketplace ("Marketplace") as a sales platform. In addition, there are fees for order processing and shipping, from which Amazon also retains a portion. Market observers and former employees criticize the retail giant for exploiting its market position to displace successful retailers operating on the Marketplace by including their products in its own assortment, prominently advertising them, and thereby generating growth.

Germans are divided in their assessment of Amazon's position in the retail sector: In a survey conducted by Pepper Media Holding , nearly 44 percent of respondents stated that they consider Amazon's market power in Germany to be a cause for concern. Conversely, almost 41 percent of respondents did not consider Amazon's market power to be a cause for concern.

Amazon is particularly strong in the electronics/computer, toys/baby/sports/leisure, and books/office supplies sectors: its market share in these categories ranged between 14.7 and 24 percent of the total retail market in the second half of 2019. For products in the kitchen/household/home segment, nearly one in nine Germans still chooses to buy from Amazon.

Thanks to Corona: Amazon expands power in the retail sector

Online shipping giant Amazon continues to expand its strong position in German retail during the Corona pandemic. As the chart based on data from the German Retail Association shows, its share of online retail sales will already be 53 percent in 2020 (Amazon's own retail plus Marketplace). That's an increase of five percentage points compared to 2019, and Amazon's share of total German retail sales is now 6.7 percent.

About half of the goods that people buy from Amazon do not come from Amazon itself, but from smaller retailers. They pay Amazon a monthly fee for being allowed to use the digital marketplace as a sales platform. In addition, there are fees for processing the order and shipping fees, of which Amazon also retains a portion. Market observers and former employees criticize the retail giant for exploiting its market position to squeeze out retailers successfully operating on the Marketplace by including corresponding products in its own range, advertising them prominently and thereby generating growth.

Germans are divided in their assessment of Amazon's position in the retail sector: In a survey conducted by Pepper Media Holding , just under 44 percent of respondents said they were concerned about Amazon's market power in Germany. By contrast, just under 41 percent of respondents did not consider Amazon's market power to be a cause for concern.

Amazon is particularly strong in the electronics/computers, toys/baby/sports/leisure and books/office supplies segments: here, its market shares in the overall retail sector in the second half of 2019 range from 14.7 to 24 percent. In the case of products from the kitchen/household/home segment, just under one in nine Germans still decides to buy from Amazon.

Retail giant Amazon expands its power in the retail sector – Image: Statista