Ranked ninth in the world! A niche platform is making money in the trillion-dollar market

Not only does Germany rank high in terms of economic size, its development in the e-commerce sector cannot be underestimated.

As the largest economy in the European Union, Germany's per capita GDP ranks fourth in the world, and its per capita consumption capacity ranks first in Europe and third in the world, which provides fertile soil for the booming development of its e-commerce.

Geographically, Germany is located in the heart of Europe, with a superior geographical location and influence that can radiate almost all of Europe. In addition, Germany has strong local logistics capabilities, with the support of logistics giants such as DHL , which has created a solid logistics foundation for the development of e-commerce.

Data shows that the German e-commerce market revenue is expected to reach US$98.31 billion (approximately RMB 717.66 billion) in 2024, and will continue to grow in the next few years. By 2029, the market size will grow to US$146 billion (approximately RMB 106.58 billion).

Germany's mainstream e-commerce platforms such as Amazon and eBay occupy a large market share, but there are also many high-quality local e-commerce platforms. OTTO, which was founded in Hamburg, Germany in 1949, is one example.

Founded 75 years ago, OTTO has become the largest e-commerce platform in Germany

OTTO is an e-commerce platform under Otto Group , Germany's largest retail giant . Backed by the Otto Group, OTTO has become one of the largest e-commerce platforms in Germany and ranks second in the global comprehensive B2C ranking.

Specifically, OTTO started as a self-operated platform and launched an e-commerce model in the 1990s; in 2014, the OTTO platform proposed and implemented an open business model for the first time in the German e-commerce market; in 2019, OTTO opened the third-party seller market; in 2020, OTTO recruited investors in China, and China ( Otto China ) was established, bringing new business opportunities to Chinese merchants.

The popularity and reputation accumulated over 75 years have also made consumers more trusting of OTTO. OTTO is very popular in Germany, with 62.4 million online users , which is expected to grow to 68.4 million by 2025, accounting for more than 80% of the total population of Germany.

It is worth mentioning that the "2023 Cross-border E-commerce Development Report" jointly released by the Shanghai Academy of Social Sciences, Standard Chartered Bank, "Financial Weekly" and Dun & Bradstreet shows that the Auto Group has successfully ranked 9th among the top 50 global cross-border e-commerce platforms . It is also the only European e-commerce platform on the list , which shows its broad prospects.

In 2023, OTTO's data performance was outstanding, with gross merchandise volume (GMV) reaching 6.5 billion euros (approximately 49.3 billion yuan), achieving rapid growth in performance.

There are many categories of goods on the OTTO platform, covering furniture, electronics, home textiles, home appliances, sports and outdoor, kitchen supplies, tools and hardware, gardening, home decoration, luggage, maternal and child toys, clothing, pet supplies, beauty and other fields. Among them, clothing, home furnishings, and 3C products are the most popular .

In addition to a wide range of product categories, the OTTO platform also has other advantages.

First, the average order value on the OTTO platform is high , and German consumers have strong purchasing power , so sellers can enjoy considerable profits and development space by investing in this platform .

Secondly, the platform adopts an invitation review system. The platform selects sellers, which makes entry have a certain threshold. Only sellers who meet the relevant conditions can enter, reducing the losses caused by vicious competition.

Third, OTTO has complete basic services and has built its own financial and logistics systems, which can effectively improve consumers' shopping experience and increase user stickiness.

Fourth, the platform provides targeted support to high-quality sellers and provides them with a high-quality business environment.

As early as 2020, OTTO turned its attention to the Chinese market and actively recruited Chinese sellers.

As of 2023, more than 600 Chinese sellers have successfully entered the platform. In addition, there are about 200 to 300 Chinese sellers on the platform .

OTTO can be said to be a blue ocean platform. As the only European e-commerce platform on the 2023 global cross-border e-commerce platform rankings , it shows its huge development potential. It can enable sellers to easily reach consumers and gain more exposure opportunities.

The prospects are broad, and many industry leaders have entered the market

As the bonus period gradually fades away and in the context of internal competition, more and more sellers are starting to deploy on multiple platforms, hoping to tap into new blue ocean markets and platforms to realize their life value and financial freedom.

In recent years, while overseas local e-commerce companies are recruiting Chinese sellers , Chinese sellers have also been trying to " put their eggs in different baskets " to seek stability as well as new development opportunities.

Data shows that after only two and a half years of entering OTTO, Zhiou Technology's GMV has reached 570 million yuan, which is enviable. Specifically, in 2022 and 2023, Zhiou Technology's revenue on the platform reached 138 million yuan and 250 million yuan respectively, with an annual increase of 80.99%.

In the first half of 2024 alone , its revenue exceeded the total of 2022, reaching 185 million yuan, a year-on-year increase of 97.11%.

In addition to Zhiou Technology, the well-known best-selling Stone Technology has also invested in OTTO, and many of its smart sweeping robots have been labeled " Sehr beliebt (very popular) " .

China is one of the main sources of cross-border shopping goods in Germany , accounting for as much as 44%. At present, the Auto Group is still constantly recruiting Chinese cross-border e-commerce sellers who are " destined " , and the platform has not yet reached the point of being very involuted , so there will be more room for development in the future.

Previously, the CEO of Otto China mentioned that the development strategy of OTT O this year is still focused on the Chinese market . In addition , in July this year, Otto Group's e-commerce platform limango also announced that it would open to Chinese third-party sellers. This series of signs indicate that sellers will have more choices.

Opportunities and challenges coexist

It is a new blue ocean platform, but it also has certain challenges and risks. While sellers rely on the OTTO platform to gain more exposure and sales opportunities, they must also be aware of its own drawbacks.

For example, the model has certain limitations. The platform currently only supports the self-delivery model, and all merchants must ship locally in Germany . It is necessary to establish a certain cooperative relationship with the OTTO platform, including cooperation in supply chain, logistics, etc., and must use designated logistics such as DHL for delivery , etc. This requires sellers to have a certain strength and energy to maintain.

Therefore, when sellers are planning to develop the OTTO platform, they should conduct a comprehensive investigation and only enter the market when it is suitable for their own development.

Although Amazon still has a great influence in Europe, local platforms such as Germany's OTTO, Poland's Allegro and France's Cdiscount have also been developing and breaking through in recent years, and are attracting more and more sellers with their respective advantages.

The layout of local e-commerce platforms provides sellers with a new development direction for deepening their presence in the European market. When making their layout , sellers can conduct comprehensive investigations, grasp market trends in a timely manner, and make adjustments according to their capabilities , so that they will surely find new development opportunities in the future .

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