Retailers shift their ad spending from TV, radio and print ads to digital ads.
Yoox and others blanket Italy and Spain.
With many big players already dominating key categories in Europe’s oldest e-commerce markets, other Internet Retailer Top 300 Europe companies are growing by carving out successful niches or investing in newer e-commerce economies such as Italy and Spain.
A decade ago Yoox SA was a small start-up online apparel and accessories retailer based in Milan. But over time Yoox grew by leveraging its ties to brand name clothing manufacturers in Milan and building up a unique inventory of apparel, accessories and jewelry from newly discovered or trendy local designers.
The strategy has paid off. In 2010 online retail sales, which include sales at Yoox.com and TheCorner.com, grew 31.8% to 163.7 million euros (US$227.9 million) from 124.2 million euros (US$172.9 million) in the prior year. Sales in Italy increased year over year about 23.6% to 49.2 million euros (US$68.5 million) from 39.8 million euros (US$55.4 million) in 2009.
“We’ve grown because we have a strong local presence and ability to tailor our offering to different geographies,” says CEO Federico Marchetti.
E-commerce will remain a growth industry and there are still opportunities for expansion, but retailers have to take a close look at each market and then build unique web sites with local appeal, say European retail analysts.
“There are key differences in the markets in Europe,” says eMarketer analyst Karin von Abrams. “In some of the smaller countries the Internet still only accounts for a small portion of total retail sales, and that presents an opportunity for new players to create a base.”
In Spain, where the combined sales of the 13 Spanish merchants ranked in the Top 300 Europe increased year over year 17.9% to 500.2 million euros (US$696.4 million) from 424.4 million euros (US$590.9 million), private-event sales sites are especially popular. Three of the largest home-grown online retailers in Spain—BuyVIP, El Corte Ingles, Cub Privado—are private-event sites.
“There is still a huge demand for high-quality retailers such as private-sale sites to achieve an even faster growth in the Spanish e-commerce market,” says Cesar Tello, director of corporative development for the Spanish Association of the Digital Economy, an e-commerce trade group. “The level of market maturity is still low so Spain is full of opportunities for global retailers.”