Otto invests in own website to fight Amazon

Otto, the second biggest ecommerce player in Europe, is investing some serious money in its own online business in order to keep up with the rapid expansion of Amazon in Europe. A ‘mobile-first’ approach and a new fashion website should help Otto making this ambitious plan happen.

Otto may be a household name in Germany and running more than 60 websites worldwide, it still has to acknowledge Amazon as its superior. If you’re not convinced, just look at the numbers: Otto saw its total online sales rose 7.6% to 6 billion euros in 2013 (online sales in Germany grew 7.8% to 4 billion euros), while Amazon saw its German sales grow 21% to 7.6 billion euros. For comparison: Zalando saw online sales rose 52% to 1.76 billion euros last year.

You might say Otto didn’t perform that bad in Germany, but the 7.8 percent growth is in fact slower than the average for all ecommerce in Germany, which grew 12 percent in 2013 (to 33.1 billion euros). So clearly, some things have to changes if Otto wants to remain a big ecommerce player in its home country.

Otto is investing
Otto would like to see its online sales grow to 8 billion euros by 2015 and for that to happen, the company is investing 300 million euros in its online business. The money goes to new software for the Otto website, mobile payments firm Yapital (which was launched by Otto Group in the summer of 2013) and other ecommerce startups.

Otto is also working on a company-wide mobile-first initiative. With this, it hopes to drive half of traffic onto smartphones and tablets by 2016, Reuters says. The German company is investing as well in a new online ecosystem for young fashion-conscious women with several special fashion shops. Such is desperately needed, as Otto at the moment appeals to an older market than Zalando or the British online retail Asos.

The Otto Group was originally a mail order firm founded in 1949, but it made the shift into e-commerce in 1995. Otto GmbH owns several European companies like 3 Suisses, Hermes Europe, Shopping24, Bonprix and Neckermann.de.