Online marketplaces in Switzerland

Marketplaces dominate a large number of national e-commerce markets. The strongest players include Amazon in the USA and large parts of Europe, Alibaba in China and Rakuten in Japan. In Switzerland, the market is considerably more fragmented. Why is this? And what are the most important marketplaces in Switzerland?

In 2018, the Alibaba Group (Taobao, Tmall) achieved a market share of 56% in the B2C e-commerce market in China. Amazon already holds a 50% share in the USA, Germany and France but there is no such dominance in Switzerland. If you add together the market shares of the three national Amazon marketplaces Swiss consumers use for shopping – amazon.de, amazon.fr and amazon.it – this produces a total market share of 8% in 2018.

There are various reasons for this fragmentation. Switzerland is seen as a less interesting market by international players due to its smaller size as well as customs duties and several official languages, which make it harder to tap into. In contrast to the many European countries where it has been present since the late 1990s, Amazon has not taken on a pioneering role in online retail in Switzerland. This role has been played by a range of strong local players: Digitec, Brack, Microspot, Ricardo and Leshop.

Although currently less dominant in Switzerland than in neighbouring countries, the importance of the marketplace model is growing all the time. There are four main variants that I’d like to present in order of popularity among Swiss consumers in 2019.

C2C platforms still very popular

The most popular marketplace in Switzerland is ricardo.ch (named by 80% of consumers). This platform along with tutti.ch (52%), ebay.ch (49%) and anibis.ch (40%) primarily facilitates retail between private individuals (C2C). Although popular, these platforms only hold a limited market share in Swiss B2C e-commerce (estimated < 5%) but they are indispensable in certain product categories such as cars (auto.ricardo.ch and autoscout24.ch). There is no charge for placing ads but promotional campaigns incur a fee. While tutti.ch and anibis.ch do not charge commission, Ricardo holds onto 9% of the sales price and ebay.ch retains between 5% and 9%.

Major European players increasing their presence

At number two on the list of most used platforms by Swiss consumers are the major European players Amazon (76%) and Zalando (63%). Zalando is the largest online shop in Switzerland with revenue of CHF 785 million. Together with the various Amazon sites (.de, .fr, .it), these major players are growing by around 10% each year and enjoy very high numbers of online visitors. This makes them especially appealing places for Swiss retailers to offer their products and enables the strategic focus to be more about increasing their own visibility instead of developing an important new sales channel. Zalando charges its third-party partners commission of between 5% and 25% of the sales price, which varies according to product type and the respective contract with the platform. With Amazon, this commission is between 7% and 15% depending on the product.

Swiss marketplaces are changing

67% of consumers say they purchase from Digitec/Galaxus, which is owned by Migros. Its cumulated revenue of 950 million in 2018 makes it the single most important marketplace based in Switzerland. Coop on the other hand relies on a more generalized marketplace at microspot.ch (revenue of 242 million in 2018) following the failure of Siroop in 2018.

Digitec/Galaxus demands commission of between 7% and 20% on sales depending on the product. However, unlike Amazon, both of these examples are selective marketplaces, i.e. the providers take an active role in deciding who is permitted to sell on their marketplaces.

Microspot recently allowed the first provider outside the Coop Group to access the online shop: Orell Füssli. Digitec/Galaxus already has a handful of selected third-party providers in its range. Even if these two marketplaces are currently restrictive and, in turn, less appealing to Swiss retailers, they’re sure to become “Swiss Amazons” at some point in the future given the latest developments. The online significance of both owners is also set to grow based on their dominance of high street retail.

The outrageous growth of Chinese platforms

The Chinese marketplaces Wish and Aliexpress are named by 40% and 35% of consumers respectively. Both experienced virtually unbelievable growth rates in 2018: +170% for Aliexpress.com and +154% for Wish. Both platforms are open to every retailer and require commission on each sale averaging 8% for Aliexpress and 15% for Wish. According to our survey, only a very small number of Swiss-based retailers sell their products on these marketplaces. Their appeal for Swiss retailers is limited due to costs and margin-related reasons. The vast majority of sellers on these platforms are either producers based in China or retailers who operate via drop shipping.