Amazon is now the world’s most valuable company
The e-commerce giant has, after several years of rapid growth, secured the top position as the world’s largest publicly traded company.
With this achievement, Amazon has overtaken tech giants such as Apple and Microsoft and now holds a market value of 5 trillion kroner. That figure is almost unimaginable – for context, Denmark’s entire GDP in 2018 was 2.4 trillion kroner! This enormous capital, coupled with outstanding business expertise, is what Amazon brings when entering new markets.
A key reason for Amazon’s success is its robust business model and thorough understanding of both the market and consumer behaviour. Amazon leverages its vast customer database, analysing purchasing habits and targeting products directly to each customer.
Whether you intend to work with Amazon or not, this development can be viewed as either a threat or a unique opportunity. Whichever way you see it, it is crucial to choose the right approach to avoid costly mistakes. See our top tips for choosing a trusted Amazon agency here.
In this article, we address the following topics:
- Amazon is on the rise and heading for Denmark
- Should you compete or collaborate?
- Do you need help getting started?
Amazon is on the rise and heading for Denmark
In recent years, Amazon has expanded into a wide range of new markets – both in business areas and geography – and now dominates most product categories. In the countries where it is established, Amazon has captured significant shares of the existing e-commerce market, often to the detriment of companies unable to keep pace with the changes.
Here in Denmark, Amazon currently accounts for around 2% of online sales, despite not yet having officially launched in the Danish market. However, there have long been rumours that Amazon’s arrival is imminent.
Amazon’s strategy is to offer the broadest possible range of products in every category, meaning all industries should pay close attention and recognise the competitive challenge Amazon presents.
As shown in the graphic above, there is no doubt that Amazon’s entry into Denmark will have a major impact on Nordic e-commerce. According to consultancy Boston Consulting Group, Amazon could capture up to 20% of the Danish e-commerce market within the first five years if developments follow the same pattern as in other European countries. [1]
A logistics superpower
Logistics is one of Amazon’s greatest strengths, and in some cases, Amazon Prime Delivery can provide delivery within just two hours. However, Amazon has recently renewed its contract with PostNord for a further three years, so Amazon Prime Delivery is not expected to launch in Denmark for the next 3-4 years. Danish online businesses therefore still have some time to prepare, but it is worth considering faster delivery options now to stay ahead of the competition.
But should – and can – you even compete with Amazon?
Should you compete or collaborate?
Whether you should compete with or collaborate with the world’s largest marketplace is a decision every business will face sooner or later. Your choice could be crucial for your company’s future. According to Emil Stamp, Principal at Boston Consulting Group, manufacturers and brands are generally best served by collaborating, while retailers may benefit more from competing.
Brands and manufacturers should collaborate
For brands with unique products or smaller manufacturers, collaboration can present substantial opportunities, and Amazon could be the catalyst for significant growth.
One of the main advantages of working with Amazon is that they can handle warehousing, shipping, returns, and more. For smaller manufacturers, dealing with packaging, shipping, and returns can be time-consuming – time that could be better spent developing your business. By letting Amazon take care of logistics, you avoid the need for large storage facilities, and your products can reach customers faster than most small online shops could ever achieve.
Read more about the three ways to sell on Amazon here
With 340 million users – all potential customers – smaller companies also have the chance to reach a much wider audience and rapidly enter new markets.
Retailers should compete
If you are a retailer, there is a real risk that Amazon will outpace you in product range, price and delivery times. You should already be considering what your business can offer that Amazon cannot. Can you leverage your local knowledge or provide customer service that goes above and beyond the sale itself? In short: what will make customers choose you if you can no longer compete on products and prices alone?
Do you need help getting started?
If you are unsure which strategy is right 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 necessary experience to guide you through the process smoothly and effectively.
Find out more about how we can help you here or contact us for a no-obligation chat.
See also:
– What does it cost to sell on Amazon?
– Wild, wilder, Amazon!
– Amazon comes to Denmark – for better or for worse
