The acquisition will add more than 300 products to L’Oreal’s lineup.
Otto Group is one of several Europe 500 merchants localizing sites.
For the world’s biggest e-commerce market, online retailing in Europe is pretty local.
Unlike the universal e-commerce market in the U.S. with its common language and a centralized Internet infrastructure, Europe is made up of national e-commerce markets with different languages, currencies and online shopping behaviors. E-commerce also is mature in Western Europe, but fledgling—and flourishing—in southern countries such as Italy and Spain and in Eastern European countries including Poland and Russia.
In order to build a bigger base across all of Europe, some big Europe 500 web merchants, such as Germany’s Otto Group, No. 2 in the 2013 Europe 500 are leveraging their e-commerce investments, making acquisitions and launching new mobile initiatives in order to offer more localized web sites and online offers.
Already well on its way to selling online across Europe is Otto Group. With nearly 100 direct marketing and e-commerce brands, only about 58.5%—$4.30 billion (3.30 billion euros)—of Otto’s total 2012 e-commerce revenue of $7.35 billion (5.64 billion euros) came from its core base in Germany, the company says. That means, with more than 40% of its online sales coming from outside of Germany, Otto Group already has a broader European e-commerce base than many other merchants.
What’s more, the German cataloger and web retailer is investing nearly $390 million (297.8 million euros) to reach a total European e-commerce revenue goal of about $10.47 billion (8 billion euros) as soon as 2015. “Possibly more than any other player on the market, the Otto Group is in the position to cover the full e-commerce value chain, from the expansion of promising start-ups to the delivery of goods to the end customer,” says Otto executive vice chairman Rainer Hillebrand.
To reach that goal Otto Group plans to upgrade its mobile commerce capability and launch more niche e-commerce sites in core categories such as apparel and home and furnishings. Otto also plans to expand further in Eastern Europe, especially in Russia, where Otto began developing a direct marketing base about seven years ago.
Going forward, mobile commerce also will be a big driver of more web traffic and sales for Otto, Hillebrand says. Trade association Ecommerce Europe estimates that mobile commerce accounted for $68.23 billion (52.29 billion euros), or 17% of all European retail, travel and ticket sales of $401.35 billion (307.60 billion euros) in 2012. It’s higher in mature Western European e-commerce markets, such as the U.K. Mobile commerce accounted for about 20.2%—$34.06 billion (26.08 billion euros and 22.20 billion British pounds) of all U.K. retail, travel and ticket sales of $168.60 billion (129.04 billion euros and 109.92 billion British pounds) in 2012.
To reach more Europeans shopping via mobile devices, Otto has built a mobile commerce site for about 80 of its more than 100 e-commerce brands, the company says. About 50 e-commerce sites also have been optimized for iPads and other tablet computers. “Tablets in particular are playing a big role in the future growth of e-commerce for us,” Hillebrand says. “Smartphones are used above all to gather information about products, but thanks to the large-format and inspirational display of goods, tablet personal computers invite customers to purchase.”
Equally important to Otto is its Eastern European expansion.
To generate more sales in Russia, which amounted to about $653.3 million (500 million euros) in 2012 and is growing in excess of 20% annually, Otto late this year or in early 2014 plans to launch targeted web sites such as Project Collins, a contemporary apparel, accessories and home furnishings e-commece site for younger female web shoppers. Otto, which already offers several of its biggest brands online in Eastern Europe, including Otto, Bon Prix, Quelle and Witt, also plans to launch other of its more established e-commerce sites, such as Promendae, an online shoe store. “Otto has been active in Russia since we launched a separate company, Otto Group Russia, in 2006,” Hillebrand says. “We continue to focus on emerging markets in central and Eastern Europe.”
More on these and other metrics and analysis is contained in the 2013 Internet Retailer Europe 500.
The 2013 Europe 500 is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the new 2013 Europe 500 is available here.