The bitter truth about the e-commerce boom: Why only Amazon ultimately benefits

"The problem is before the decimal point": Why the classic online shop is facing extinction

Growth as an illusion: How a single giant is devouring the entire German retail sector

German online retailers are celebrating – at least on paper. With solid sales growth, the consumer crisis seems to be over, but appearances are deceiving. Behind the recent success stories from the HDE Online Monitor lies a dramatic market shift: The much-lauded industry growth does exist, but it is almost exclusively concentrated in the hands of a single giant – Amazon. While the US corporation absorbs around 80 percent of the total growth, medium-sized retailers are struggling. As if this dominance weren't overwhelming enough, a second wave of attack is rolling in with Chinese discount platforms like Temu and Shein, which will permanently disrupt the price structure in Germany. At the same time, we are facing a technological watershed: Artificial intelligence and social commerce are revolutionizing the customer journey so radically that the classic online shop could soon become obsolete. This is an unvarnished analysis of why cosmetic shop optimizations are no longer sufficient and why we are experiencing a completely new market dynamic.

The Great Redistribution: Why German online retail is growing, but almost no one benefits from it

The end of online shopping? How AI agents and TikTok are completely destroying our purchasing habits

German online retail is growing. The figures from the HDE Online Monitor 2026, compiled in cooperation with IFH Cologne, show net sales of €84.9 billion for 2025, an increase of 5.8 percent compared to the previous year. At first glance, this looks like an industry on the rise, a recovery, a dynamic growth. But anyone who takes the time to look beyond the aggregated figures will encounter a reality that sounds less like an upswing and more like quiet consolidation. The sales haven't disappeared; they've just shifted. This statement, which e-commerce strategist and former CEO of eBay Germany, Stefan Wenzel, has used for years as a guiding principle in his analyses, describes the core problem of German retail more precisely than any official growth forecast. Because the growth is happening; it's just not being distributed. It's concentrating. And it's concentrated in the hands of a single player.

The gravitational core is called Amazon

Amazon.de now commands more than 60 percent of the German online retail market. According to the latest surveys by IFH Cologne, the platform accounts for around 63 percent of total German online retail sales when combining its own sales and marketplace offerings. That alone would be remarkable. But the truly striking figure lies in the distribution of growth: According to calculations by Stefan Wenzel based on HDE and IFH data, Amazon absorbs almost 80 percent of the already modest growth in online retail. What remains for the rest of the sector is a nominal increase of approximately 2.4 percent, which, adjusted for inflation over the past few years, amounts to zero growth. In other words, the entire German online retail sector, excluding Amazon, is essentially stagnant. The growth celebrated in press releases and industry reports is essentially Amazon's growth. The rest of the sector is stuck in a rut.

This concentration is not a new phenomenon. As early as 2017, Amazon contributed almost two-thirds of total online growth, amounting to €3.3 billion. But the momentum has not slowed since then; on the contrary, Amazon's market share of German online retail has increased by 15 percentage points in the last ten years. The platform has evolved from a dominant player into a near-monopolistic center of gravity, attracting all growth and stifling other market participants.

What the industry figures really tell

The HDE Online Monitor 2026 presents a nuanced picture of German online retail at first glance. All sectors recorded nominal sales increases. The growth rates of the individual segments are converging. The online share of total retail sales rose slightly to 13.5 percent. Particularly striking is the growth in fast-moving consumer goods (FMCG), which stand out with an increase more than 2.5 times the industry average. Groceries, drugstore items, and personal care products are among the fastest-growing product categories online.

But this sectoral perspective obscures the essential point. In 2025, net growth in online retail amounted to €3.1 billion compared to the previous year. That sounds like a lot, but it's modest in the context of a total market of almost €85 billion. And when you consider that a single player is pocketing the lion's share of this growth, the situation for the broader market becomes precarious. While the growth rates of the different formats—that is, those with an online focus, brick-and-mortar presence, and manufacturing—have converged, they remain at a low level. Brick-and-mortar retailers active online have seen little growth in their online market share since the COVID-19 boom; in the fashion and DIY sectors, it has even declined.

At the presentation of the figures, HDE Deputy Chairman Stephan Tromp stated that the sector had proven to be a growth engine for the entire retail industry, despite weak consumer sentiment. This is true in the overall picture. However, it obscures the fact that this engine has only one cylinder generating the majority of its power. And all the other cylinders are sputtering.

Urban densification as a structural paradigm

Stefan Wenzel uses the term "densification" to describe this phenomenon. This doesn't refer to urban densification within a neighborhood, but rather to an economic concentration in which market share, growth, customer attention, and ultimately profitability are concentrated in the hands of a few players, while the breadth of the market thins out. The term is deliberately chosen because it implies that space is limited. There is no expansion of the overall market that benefits everyone. Instead, a roughly equal-sized pie is divided among fewer and fewer participants, who take ever larger slices.

This consolidation has several drivers. First, the infrastructure: Amazon has a logistics network that is unparalleled in Germany. Prime deliveries within one day, a nationwide fulfillment network, the integration of Amazon Haul as a low-price alternative to Temu – all this creates a level of service that medium-sized online retailers simply cannot match. Second, the data economy: Amazon understands its customers' purchasing behavior better than any other player in the market. The platform optimizes prices, recommendations, and visibility in real time with a database that no individual retailer could ever build. Third, the marketplace logic: Amazon is no longer just a retailer, but primarily a platform. More than half of the goods purchased on Amazon come from third-party sellers. Amazon earns a commission on every transaction without bearing any inventory risk – a business model that allows for scaling with almost no proportional increase in costs.

Temu, Shein and the second front line

As if Amazon's dominance weren't enough, a second front has opened up in the last two years. Temu and Shein, the two Chinese ultra-low-cost platforms, have an estimated combined market share of almost 3.7 percent of German online retail, according to the IFH Cologne, which corresponds to a turnover of around 1.8 billion euros. Extrapolated, 17.9 million online shoppers in Germany now buy from Temu and Shein. The average order is worth 38.70 euros, with an order frequency of 8.5 times per year. This equates to roughly 419,000 packages being shipped from China to Germany every day.

The perception of quality on these platforms is ambivalent. The percentage of respondents who report that the products are of poor quality is increasing year-on-year. At the same time, actual buyers indicate that they intend to buy from these platforms again. This reveals a pattern that is threatening for the rest of the retail sector: Consumers know they are buying inferior goods, but do so anyway because the price is right. This undermines the willingness to pay across the entire market. Someone who has been buying T-shirts for €3.99 from Temu for years will no longer consider €19.99 at a German fashion retailer reasonable, but rather overpriced.

Amazon recognized the threat and launched its own low-price platform, Amazon Haul, in Germany in June 2025. Four months after the launch, a third of internet users were already familiar with the service, and 19 percent had already made a purchase there. Amazon is thus closing the last gap in its portfolio and putting its Chinese competitors in a bind, while at the same time traditional German online retailers are being squeezed between the two fronts.

Why optimizing at the edges is no longer enough

Stefan Wenzel succinctly summarizes the dilemma faced by most German online retailers: "For most, simply optimizing the grooves isn't enough; the problem lies before the decimal point." What he means is that improving the conversion rate by 0.2 percentage points or increasing the average order value by three euros is pointless if the fundamental business model is no longer viable. The levers most retailers pull affect the decimal places of their business. The real problem lies before them: a lack of relevance, a lack of differentiation, and a lack of willingness to pay.

This diagnosis is supported by the data. The share of brick-and-mortar retailers selling goods online will remain at 50 percent in 2025 and is stagnating. The importance of their own online shop is even declining. Online sales are clearly no longer a promising channel for many retailers. Their own online shop, once hailed as the lifeline of brick-and-mortar retail, is proving to be an expensive loss-making venture for many. Traffic acquisition costs are rising, conversion rates are mediocre, and logistics costs are barely sustainable in the face of Amazon Prime expectations.

Per capita spending in online retail is indeed rising, but primarily because average per capita spending is increasing, not because the number of online shoppers is exploding. Customer growth is 1.2 percent overall, and 3.1 percent among those over 55. The greatest potential, therefore, lies in an age group that is traditionally more price-sensitive and brand-loyal. These are not customers who readily try out new shops. They go to Amazon because they know the brand and trust the service.

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The tectonic shift caused by AI and agentic commerce

While most retailers are still struggling to operate their existing online shops profitably, the next disruption is already on the horizon. The HDE Online Monitor documents that 45 percent of internet users already use AI chatbots, with the 25- to 29-year-old age group standing out at 53 percent with regular usage. Fifteen percent of consumers already use AI chatbots for product research, primarily for comparing product features, quality ratings, and price comparisons.

This sounds like a gradual change, but in reality, it's the beginning of a fundamental transformation. The Online Monitor outlines four scenarios for the development of AI in retail, ranging from AI-optimized webshops and simple shopping assistants to all-in-one shopping experiences and a fully autonomous AI concierge. In the more advanced scenarios, the webshop becomes irrelevant as a customer interface. The consumer no longer interacts with the shop, but with an AI agent that autonomously searches for, compares, and buys products. The retailer is reduced to a data provider and logistics partner; the customer relationship belongs to the AI ​​platform.

Stefan Wenzel analyzed this development in detail in his book "Agentic Commerce: How AI Agents are Reshaping Commerce and Shifting Decision Power." His thesis: When AI agents take over the purchasing process, decision-making power shifts fundamentally. Consumers no longer consciously decide which retailer to buy from; the algorithm does. Visibility then depends not on SEO or shop design, but on the platform logic of the AI ​​system. For retailers who already generate 60 percent of their traffic via Google and are increasingly being displaced by AI-generated results, this poses an existential threat.

The mobile revolution and social commerce as a parallel shift

Alongside the AI ​​revolution, another quiet shift is taking place: 50 percent of online sales already come from mobile devices, i.e., smartphones and tablets. Half of all mobile purchases are made via apps, not mobile websites. This means that anyone without an app or a presence in any relevant app store is losing half the market. Amazon is profiting disproportionately from this, as its app is among the most installed shopping apps in Germany.

TikTok Shop, which only recently launched in Germany, has achieved 52 percent brand awareness among internet users after just six months. Nine percent have already made purchases there, primarily of clothing, cosmetics, and leisure products. According to PwC, TikTok Shop's revenue was estimated at €225 million in 2025. While this is still modest compared to the overall market, the growth momentum is enormous. Social commerce is fundamentally shifting the customer journey: the purchase impulse no longer arises from a Google search, but rather from scrolling through a TikTok feed. Product discovery and purchase merge into a single moment. For traditional retailers using classic funnel marketing, this is a structure they can hardly utilize.

On average, 31 percent of internet users have purchased products they discovered through social media. Among 20- to 24-year-olds, this figure rises to 53 percent. This generation is developing purchasing habits that have little to do with traditional online shops. They buy where they are entertained. And that's not the product detail page of a mid-sized retailer.

The Secondhand Paradox

One segment that is growing at an above-average rate, with an average annual growth of 5.3 percent, is the online secondhand market. Online sales of used goods reached a volume of approximately 3.5 billion euros in 2025. Books account for the largest share of the secondhand market, followed by fashion and consumer electronics.

At first glance, this could be interpreted as driven by sustainability, and to some extent it is. However, the driving force is increasingly economic: consumers buy secondhand to save money. In a period of stagnant real income growth and rising living costs, consumers are turning to cheaper alternatives. For the new goods market, every euro that flows into the secondhand cycle means one euro less in revenue. The growth of the secondhand market is therefore not only a sustainability trend, but also an indicator of the declining purchasing power and willingness to pay among broad segments of the population.

Brick-and-mortar retail as a silent loser

The offline perspective completes the picture of the structural shift. A five-year comparison shows a decline in total sales for the DIY and garden, home furnishings, and consumer electronics/electrical sectors. Offline, with the exception of FMCG, the figures are almost universally negative. Per capita spending offline is decreasing in most categories, while it is increasing online.

This means that brick-and-mortar retail is not only losing market share to online retailers, but is shrinking in many segments. The question is no longer whether city centers are under pressure, but how quickly this structural change is taking place. Online sales in the non-food sector already account for over 25 percent and are continuing to grow. In certain product categories, such as photography, music, or leather goods, online sales share is 40 percent or more. For brick-and-mortar retailers in these segments, the situation is becoming critically existential.

Return costs as a behavioral economics lever

A minor detail, but one with structural relevance: The HDE Online Monitor shows that rising return costs are measurably changing consumer behavior. 50 percent of respondents avoid online shops with excessively high shipping and return costs. 39 percent research products more thoroughly to reduce the likelihood of returns – a figure that has increased year-on-year.

This is economically relevant because it underscores the market's price sensitivity. Consumers react not only to product prices but also to the total transaction costs. And here, Amazon, with its free Prime shipping and generous return policy, has a structural advantage that smaller retailers cannot replicate without completely sacrificing their margins.

Why the industry needs a new narrative

The facts are clear: German online retail is growing nominally, but this growth is highly concentrated. Amazon dominates with over 60 percent market share and absorbs the majority of the increase. Chinese platforms are encroaching on the market from the bottom up. AI and agentic commerce threaten to eliminate the remaining customer touchpoints of retailers. Social commerce is shifting the impulse to buy away from online shops. Brick-and-mortar retail is shrinking in absolute terms. The secondhand market is cannibalizing the new goods market. And consumers' sensitivity to returns favors platforms with deep pockets.

What the industry needs isn't further optimization of the levers, better newsletter marketing, or another 0.1 percentage point improvement in the conversion rate. What it needs is a fundamentally different understanding of where value creation is still possible in a platform-dominated economy. This means, firstly, radically differentiated products that defy price comparison. Secondly, customer relationships that go deeper than an email address in a newsletter database. Thirdly, business models that don't rely on Google traffic, which is absorbed by AI systems anyway. Fourthly, an honest assessment of which retailers actually have a future in this new landscape and which don't.

The statement that sales haven't disappeared, but are simply elsewhere, offers no comfort. It's a warning. Because elsewhere, in this case, means: on Amazon, on Temu, on TikTok Shops, on AI platforms. For the vast majority of German small and medium-sized retailers, elsewhere means: out of reach. The consolidation of retail spaces is not a temporary phenomenon. It's the new physics of the market. And in this physics, mass attracts mass. The larger the gravitational center, the stronger the attraction, the more difficult the path for everyone else. Anyone who doesn't understand this is like optimizing grooves on a record that no one plays anymore.