Thanks to Corona: Amazon is expanding its power in retail

Published on: May 27, 2021 / Update from: May 27, 2021 - Author: Konrad Wolfenstein

Thanks to Corona: Amazon is expanding its power in retail

The online shipping giant Amazon is further expanding its strong position in German retail during the corona pandemic. As the graphic based on data from the German Trade Association shows, the share of online retail sales in 2020 is already 53 percent (Amazon proprietary trading plus Marketplace). This is an increase of five percentage points compared to 2019. Amazon's share of total German retail sales is now 6.7 percent.

About half of the goods that people buy on Amazon do not come from Amazon itself, but from smaller retailers. They pay Amazon a monthly fee for allowing them to use the digital marketplace as a sales platform. There are also fees for processing the order and shipping fees, of which Amazon also retains a portion. Market observers and former employees criticize that the retail giant is exploiting its market position to push out retailers who are successful on the marketplace by adding corresponding products to its own range, advertising them prominently and thereby generating growth.

Germans are divided when it comes to assessing Amazon's position in retail: In a survey by Pepper Media Holding, almost 44 percent of those surveyed said that they consider Amazon's market power in Germany to be questionable. Almost 41 percent of those surveyed did not consider Amazon's market power to be a concern.

Amazon is particularly strong in the areas of electronics/computers, toys/baby/sports/leisure and books/office supplies: here the market shares in the entire retail sector in the second half of 2019 are between 14.7 and 24 percent. When it comes to products from the kitchen/household/living segment, almost one in nine Germans still decides to buy them 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.