What opportunity does Amazon’s launch in the Netherlands provide advertisers?
On the 10th March this year, Amazon launched their full service in the Netherlands. Whilst the site has been active since 2014, previously you were only able to get books from the service.
However, the Netherlands hasn’t suffered too much from the absence of Mr Bezos’ full repertoire, as online retailer bol.com offers a very similar service and with free delivery on most products without having to be a premium member. Although, Amazon is challenging this by offering prime for only €2.99 per month, which is still €2.99 more than free.
In Amazon’s existing markets we talk about the ‘Amazon Tax’: having to give Amazon commission on your product because they cannibalise the environment where consumers are searching for your product. Where Amazon dominates the market space, sellers often have no choice but to hand over the commission and agree to tough terms – however, for companies spending in the Netherlands, the introduction of Amazon presents an interesting opportunity. Bol.com has already lowered its commission for sellers and Amazon has said that they won’t be forcing exclusivity for people coming to their platform.
For the first time, bol.com is also running a radio campaign targeting sellers, spending just under €400k in March indicating that it is most certainly a sellers’ market.
Of course, the current Coronavirus situation has meant that even without the 133% year-on-year increase in bol.com’s media spend, they are seeing a big increase in orders, with products such as nail clippers, fridges and bread makers amongst those that have seen a large increase in sales. Based on SimilarWeb figures, Amazon is not seeing the numbers that bol.com does, with an average of 200k visits per day vs 1.2m on bol.com, with that increasing to 1.5m after people were told to stay at home.
All Response Media viewpoint
Amazon launching into an already mature market does provide an interesting opportunity for sellers to negotiate on commission rates and exclusivity clauses. Bol.com is fiercely trying to protect its position as the top online retailer in the Netherlands and so will be open to negotiations, as will Amazon, who have failed to make as much of an initial splash as they probably expected. The current climate is only likely to propel online retail further ahead of bricks and mortar, so if you were thinking of launching in the Netherlands via an online platform, 2020 might be the time to do it.
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