Amazon and the German Book Market 1

The German Book Market 2012 2

The German Book Market - Reading is on position 11 in Germany regarding leisure time activities Main Competitors are TV, time with friends or familiy, listening to music, outdoor activities - Sales of German book market in 2012: 9, 6 billion Euro, quite stable, sales of book stores declining by 3% per year, 4, 8 billion Euro = 50% of the market (1997: 60%, 1985 64%). - Internet 17% = 1, 6 billion Euro (plus 5% per year), Market share of Amazon: 80% = 1, 2 billion Euro (Osiander: Internet sales = 5% of sales of Osiander) - 6000 book stores, 10% of them make 70% of the sales: huge concentration! - Germans buy on- and offline and not on- OR offline. And: People buy real books (as they like books in paper and books as a gift) AND Ebooks (for convenience). - Germans buy spontaneous in stores but well-direct in the Internet - click an collect is important: 33% of the Osiander Webshop-sales are collected in a store - Show-Rooming is important: information via Internet and purchase in store is stronger than vice versa, but both is increasing 3

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Amazon on the German Book Market and the part of fixed prices - Sales of Amazon in German retail Trade: 7, 7 billions Euro = 25% of the German E-Commerce, rising twice as fast as the rest of the German retail trade in E-Commerce - no safe figures for book sales of Amazon, estimated 1, 2 billion Euro with books and E-books, market share more than 80% -Market share E-Books 41%, E-Reader 40% - Amazon started with books beginning 1990, today they deliver everything - Amazon changed the whole retail industry in Germany significantly – only the fixed prices of books prevented an even worse scenario. - But: English and American book prices are not fixed and Amazon is very cheap, as well as used books have no fixed prices. As only 20% of the German population know, that prices are fixed, many people rate Amazon as a good buy company. In case of free prices the market share of amazon would definitively rise - Despite fixed prices in the book market the price is the most important feature, as other goods are cheaper with Amazon and German customers buy combined books and other goods at Amazon. 12

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What do German Booksellers and Publishers think of Amazon Booksellers: Amazon is main Competitor, forced the German booksellers to invest, to improve the service level, to play a local role, to invest in own Webshops and E-Commerce and to improve the own competence. Booksellers who failed to do this minimum of things have disappeared or been bought, Thalia and Hugendubel are the two main chains. Thus German booksellers are unhappy and do complain much about amazon The main advantage of booksellers are the stores and the essential factor human beings and encounter and emotion, which a webshop has not got. Publishers: They like the sales they have with Amazon, they dont like the pressure of Amazon regarding terms and conditions. As Amazons position is getting more and more market-dominating, they put many publishers under pressure regarding terms and conditions. 14

What do German customers think of Amazon compared to traditional booksellers? Do they like to buy books/goods online? - The huge advantages of the internet have made the German customer lazy and egoistic, as thexy like to shop cheap, quick and easy and delivery-free - Despite the fact, that amazon does not pay taxes, is sitting in Luxemburg, does not generate jobs in the towns, does not educate young people, does not contribute anything to the social and cultural life of the towns but blocks all streets with delivery-vans, an enquiry has resulted in the following result: As the performance of Amazon is very high, Amazon is the most known retailer in German, one of the most liked and sympthetic retailers, und nowhere the level of costumer satisfaction is higher than with Amazon!!!! With Amazon, Ebay and others on the market, Germans buy more and more online every year! Buy Local Initiatives try to convince the public of local shopping, with limited success Cheap, easy and quick are the most important terms regarding Shopping via Internet in germany 15

Influence of ebooks and kindle -E-Books are getting more and more important, sales 2013 1% of the sales, rising by 200%. - Expectations for 2020: market share of E-Books 10% - Market share of Amazon with E-Books and the kindle 40% - Problem: E-Book-market is not economic, as invest is high and outcome low, E-Reader have no margin, and there are only 8 purchased E-Books per E-Reader. -The German book chains Thalia and Hugendubel have their own E-Reader „Tolino“ with an unexpected high market share of 40%. -Self-publishing is rising dramatically, but to be honest 95% is rubbish. Nevertheless most E-Books out of the top ten Bestsellers are self-published. 16

How should Norway be prepared and what can a bookseller do? 1. 2. 3. 4. 5. 6. BE PREPARED Safe fixed prices Invest in own Webshops delivery free Delivery by bike as Osiander is doing in 5 cities. Service: Solution selling instead of product selling Strong Stores: Point of Emotion instead of point of sale, seller instead of bookseller 7. Cross channel-strategy with strong Webshop and E-Commerce: start now! Marketing important for a high degree of fame. An App is importnat, as 2020 95% of the internet sales will be made via smartphone. 8. Adapted Product Line and profit margin important, as sales in certain book areas decline. 9. A strong brand is importnat, at least regional 10. Growth helps 11. Be efficient and organized to reduce background costs 12. Marketing of the whole branch is necessary to make clear, what the traditional bookseller achieve. 17

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#bokdagen 2014