E-Commerce Report Switzerland

Aktuelle Pressemitteilung zum E-Commerce Report Schweiz

E-commerce in Switzerland: Foreign providers in the fast lane

Global competition now also affecting Swiss online commerce

Global competition now also affecting Swiss online commerce

For such a small country, Switzerland has quite a distinct provider landscape compared to other countries around the world. Since 2011, international providers have also had their sights locked on the high profit margins in Switzerland – and are succeeding. Zalando started out small but created a big stir, bringing about a climate that is putting Swiss providers under serious pressure. The strength of the competition is the result of advantages related to currency and customs duties as well as greater determination to focus on what benefits customers. Swiss providers are being challenged to mobilise their full potential to keep up with the competition.

Since 2009, the E-Commerce Report Switzerland is the only independent series of studies carried out from the perspective of the providers to examine the value, transformation and trends in sales to end consumers. The survey is conducted by online payment processor Datatrans and the University of Applied Sciences and Arts Northwestern Switzerland (FHNW).

Rapid, steady shift toward e-commerce
In 2017, Swiss consumers placed online orders totalling around CHF 9 billion. The figure already reflects the roughly 10% stagnation in total volume in the Swiss retail sector. In 2017, e-commerce grew 10% over the previous year and the value of orders placed with foreign online vendors more than doubled in comparison to Swiss vendors. The foreign share is now hovering around 20% – twice that of brick-and-mortar purchases. Taken over a period of five years, sales growth among foreign vendors was more than triple that of Swiss vendors. Significant growth is expected again in the current year, 2018.

Swiss e-commerce players with a distinctive profile
The development of the Swiss e-commerce market, which was barely affected by what was happening beyond the borders for a long time, has produced a number of strong and innovative e-commerce players that also stand out in the international comparison. The most notable concepts mentioned in this year’s study report include: market leader Digitec Galaxus with its distinct positioning and strong growth; [email protected] with its advances in offering fresh products and its own high-quality delivery service; SBB with its successful smartphone ticketing solution; BRACK.CH with its ability to incorporate its own core competencies in a diverse range of collaborations; Beliani with its international expansion through a dual sales strategy; Nespresso with its strong customer loyalty and consistent service-focused attitude in areas like recycling at home; Hotelplan subsidiary Bedfinder with its focused concept of integration into global metasearch platforms; the PCP.COM group with its seamless, speedy logistics spanning from procurement abroad all the way to delivery in STEG stores; Ex Libris as a pioneer of a radical transformation in retail; and start-up Farmy that is employing a new logistics concept to explore new opportunities in food e-commerce.

‘The Swiss e-commerce market has open-minded and discerning customers. As a result, it has produced some very capable national providers,’ explains Ralf Wölfe, author of the study. ‘But e-commerce remain highly dynamic and no one can afford to rest on their laurels.’

The trend continues in traditional retail  Unlike in Germany, even the healthy economy and the increased strength of the euro in comparison to the previous year have not triggered new growth among traditional retailers. The fundamental drivers of structural change are continuing to chip away at capital. Previous digitalisation measures are no longer able to achieve much more than slowing market share losses. One of retail’s major shortcomings is its failure to connect goods in bricks and mortar stores to customers’ online searches.

A different kind of brick-and-mortar store from online vendors
The trend of vendors that started out as online-only businesses to open brick-and-mortar stores does not affirm the viability of the traditional business model. E-commerce vendors are transforming their companies into tangible brands through direct contact points. They offer a specific selection of locally useful services. They do not load up their small spaces with their often vast product range. Yet they are still very powerful as nodes in a cross-channel network of value creators.

Transformation in commerce continues moving forward
Observing how traditional functions in commerce are forming new combinations with new participants to deliver new service concepts proves that the digital transformation in commerce is still in full swing. In addition, other sweeping changes are to be expected in the area of consumer sales. Considering the hazard of falling behind the ever speedier and more efficient foreign competitors, Swiss providers will need to be more decisive, faster and more willing to perform key functions themselves and form partnerships for this purpose.

Local proximity of Swiss providers as a competitive advantage?
Swiss providers have long benefited from the customer-friendly aspects of cross-border package shipping to Switzerland using the ordinary postal service. Even Amazon is now optimising its exports to Switzerland – with the help of the Swiss postal service. Deliveries are getting faster all the time, and the ways in which Swiss providers are able to set themselves apart continue to dwindle. If they want to gain a competitive advantage in delivery logistics, Swiss providers will have to find ways and means that are unavailable to their foreign competitors – such as the direct deliveries [email protected] offers independently.

‘Delivery logistics has been neglected by many Swiss providers,’ explains Wölfe. ‘It would be disastrous if foreign competitors found a way to offer better solutions in Switzerland than those of domestic providers.’

Grappling with powerful digital platforms
In Switzerland, too, large digital platforms continue to gain steam and are wedging themselves between vendors and customers. The love-hate relationship that now typifies such collaborations is a result of the ambivalent role of platforms: in creating channels for approaching customers, they are not merely service providers but also competitors. There are, however, no alternatives other than finding appropriate ways to work with them. The study report explores various solution approaches.

Click-free checkout with seamless payments
When making recurring purchases, the payment process – especially from phones – is tedious. Seamless payments offer the solution. Switzerland is at the forefront of this development with apps like Lezzgo and Fairtiq, which cover the entire public transit network. Once a framework agreement is set up and a payment method has been selected, the provider can initiate payments when the customer simply uses its service, without any additional action required by the customer.

Growth trend in e-commerce to remain stable for the next five years
The expectations of the study panel for growth in turnover in the next five years have remained virtually unchanged in the last few years: half of all study participants predict that e-commerce sales of physical merchandise in 2023 will be around 50% or more than current levels in 2018. The other half expect slower growth, but no one expects a decline. Over the five-year period from 2012 to 2017, e-commerce growth was 53%. If the predictions prove to be true, the Swiss retail sector can expect to see an e-commerce volume of around 15% in 2023.

Topics covered in the E-Commerce Report Switzerland 2018

  • Taking stock of Swiss e-commerce in 2018 
  • Weight of foreign online providers (i.e. Amazon, Zalando, Chinese providers, Google and Facebook) 
  • Swiss online marketplaces with products (i.e. siroop, Galaxus, ricardo.ch) 
  • Assessing the perspectives for the Swiss retail segment as a whole 
  • Logistics as a competitive advantage? 
  • This year’s focus: grappling with powerful digital platforms 
  • Click-free checkout with seamless payments 
  • Continuing transformation of commerce 
  • Five-year outlook to 2023 for Swiss e-commerce

The study is available free of charge here: 
www.e-commerce-report.ch/orders

Objective
The E-Commerce Report Switzerland is the only independent series of studies carried out from the perspective of providers. Each year it examines the importance, transformations and trends in retail networks.

Methodology

  • Long-term study, repeated annually, since 2009 
  • Empirical, primarily qualitative 
  • Survey method: expert interviews and questionnaires 
  • Survey period: 9 January to 20 April 2018

Sampling

  • 35 Swiss online and multi-channel providers of consumer goods and services with the potential to shape the market
  • Together, they represent an e-commerce volume of over CHF 6 billion.
  • Selection criteria: several years of success in e-commerce, industry significance, innovativeness of business model
  • List of study participants: www.e-commerce-report.ch/panel_en

Realisation
Institute for Information Systems at the University of Applied Sciences and Arts Northwestern Switzerland FHNW, on behalf of Datatrans, the leading Swiss specialists in Internet payments.

More information
www.e-commerce-report.ch/press

Contacts

  • Prof. Ralf Wölfle, University of Applied Sciences and Arts Northwestern Switzerland
    Head of Competence Centre E-Business
    061 279 17 55, [email protected]
  • Urs Kisling, Datatrans Ltd
    044 256 81 91, [email protected]

Download study for free or read the Management Summary.