Amazon made $300 billion a year! This market is doing well again

As the global e-commerce giant, Amazon achieved remarkable results worldwide last year. According to the financial report, Amazon's annual revenue in 2024 reached 638 billion US dollars, an increase of 11% year-on-year; net profit was 59.2 billion US dollars, an increase of nearly 95% year-on-year.

Among Amazon's global sites, the development of the UK and Germany is particularly noteworthy.

The German market has made Amazon 300 billion in profit a year

Data shows that in 2024, Amazon's revenue in Germany will increase by 8.7% year-on-year to 39.6 billion euros (about 301.1 billion yuan at the current exchange rate), accounting for 6.4% of its total revenue. Germany is also Amazon's largest overseas market.

In addition, Amazon's penetration rate in the German e-commerce market has reached 64%, and it is also the most popular online shopping platform for German consumers. 79% of respondents said they choose to buy their favorite products on Amazon.

Amazon's achievements in Germany illustrate the potential of this market, and Amazon's investment and construction of facilities such as German logistics centers also illustrate the importance of this market.

Although it experienced a decline in 2022 and 2023, according to the latest data released by the German Federal E-Commerce and Transport Association bevh, Germany's online spending increased by 1.1% year-on-year in 2024, and total online spending reached 80.6 billion euros (about 613.02 billion yuan). And bevh predicts that this growth will continue.

This judgment is well-founded.

In terms of population, Germany has a population of over 83 million, making it one of the most populous countries in the European Union; in terms of per capita GDP, Germany's per capita GDP ranks among the highest in the world; in terms of Internet penetration rate, Germany is as high as 93.42%, far higher than the average level of Internet users in Europe of 88.73% and the world's 70%.

In terms of online shopping participation rate, more than 80.57% of German Internet users shop online, and the number is still growing; 99% of adult consumers are accustomed to online shopping. Online shopping has been fully integrated into the daily lives of Germans, whether it is buying daily necessities or purchasing gifts for festivals. In addition, more than 52% of Germans spend more than 500 euros on online shopping each year, with an average customer unit price of 134 euros.

In addition, Germany also has world-class logistics infrastructure, and the existence of logistics giants such as DHL provides a solid logistics foundation for the development of local e-commerce.

Marketplaces are the mainstream, accounting for 83% of German web traffic

It is worth mentioning that 73% of German consumers believe that e-commerce platforms are the simplest and most convenient shopping places compared to brand websites .

The "German E-commerce Market Report 2024" released by RetailX also mentioned that market platforms account for 83% of Germany's Internet traffic, so sellers interested in the German market can focus more on e-commerce platforms.

In the German market, in addition to Amazon, eBay, OTTO, Zalando, Temu, etc. are also well-known platforms.

eBay: 184 million monthly visits and 17 million active users . Products cover automobiles, fashion, home furnishings and electronics, and it is one of the most frequently used shopping websites for German consumers . Its rules are relatively flexible and friendly to small and medium-sized sellers .

OTTO: 65 million monthly visits and 11.7 million active users . Its products cover fashion, home furnishings, electronic products, toys, etc. It is the second largest B2C retailer in Germany . It has strict qualification review for sellers and high requirements for brand image and product quality .

Zalando : With more than 50 million active customers , its products cover footwear, fashion apparel, accessories and beauty categories , and it is Europe's leading fashion e-commerce platform . It focuses on the fashion field and has high requirements for fashion brands and products .

Temu: With 16 million monthly active users , its products cover household goods, electronic products, clothing, shoes and hats, beauty and personal care products , etc. It is one of the fastest growing e-commerce platforms in the German market ; its rules are relatively flexible and friendly to new sellers .

MediaMarkt: With 35 million monthly visitors , it is one of the largest consumer electronics retailers in Europe . Its products cover consumer electronics, household appliances, etc .; its rules are relatively strict, and it has high requirements for product quality and after-sales service .

Kaufland: With 32 million monthly visits , its products cover food, electronics, home furnishings, fashion and other fields . It is one of Germany's comprehensive e-commerce platforms . Its rules are relatively flexible, but it has high requirements for product quality and price.

In terms of product categories, the most obvious growth in online sales in Germany in 2024 will be in medicines (6.3%), groceries (5.5%) and pet supplies ( 5.4% ), all of which have a year-on-year growth rate of more than 5%; fashion category spending remains basically stable (apparel and footwear growth rates are 0.1% and 0.8% respectively); although sales of electronic products have declined, they are still one of the important categories in the German e-commerce market . At the same time, books, beauty products, sports and leisure products, hobby products, and furniture products are also products that German consumers like to buy online.

In addition, the reasons why German consumers choose online shopping cannot be ignored. Among them, 49% of German consumers regard "cheaper prices" as the primary factor; home delivery (43%), saving time (35%), sufficient supply (35%) and a richer variety of products (32%) are also major reasons .

In the German market, these risks cannot be ignored

Like other markets, there are risks in the German e-commerce market that cannot be ignored.

The first problem is the high return rate . Data shows that Germany's return rate is as high as 50%, the highest among other European countries. This is not because Germans are difficult to please, but because of strict regulations on consumer rights protection; in addition, many consumers will buy multiple colors and sizes of the same product, and then return it after receiving and trying it.

Therefore, sellers who are preparing to enter the German market must improve their return policies and provide customers with as detailed product information and online real-time response services as possible . For example, some clothing retailers not only provide customers with product sizes, but also describe the effects of different sizes of clothing on the body, and provide 360-degree product photos and model effect videos.

Secondly, there are risks in taxation and other policies and laws . In 2024 , Germany's tax compliance requirements will be further tightened, especially in terms of VAT tax registration and tax reporting. Sellers must ensure that the VAT tax number is valid and report it on time; and the German Packaging Law requires all importers, online retailers, etc. that sell goods in the German market to register and obtain a license. While preparing solutions to arrange packaging recycling after the goods are used, they must declare the packaging materials, types and weights sold. In addition , Germany also has strict compliance requirements for specific products, such as CE certification for electronic products and the Electronic Waste Law.

In addition, due to the large number of sellers on mainstream e-commerce platforms, product homogeneity is serious . In order to stand out from the competition, sellers need to continuously improve product quality and innovation capabilities and provide differentiated products and services. At the same time, sellers also need to strengthen brand building, improve brand awareness and reputation, and enhance consumer loyalty.

At present, the US market faces great uncertainty due to policy reasons, so the return to the growing German market is an opportunity. When operating in the German market, sellers need to fully understand the market characteristics, seize market opportunities, pay attention to risk prevention, and formulate reasonable business strategies. By continuously improving product quality, innovation capabilities and service levels, I believe that sellers can make a name for themselves in the German e-commerce market.

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