Otto sales partners generate revenue growth
Otto expects slightly higher revenue for the upcoming year-end period compared to the same period last year. According to CEO Marc Opelt, the platform model is the “key growth engine” of the online department store.
Opelt describes himself as “cautiously optimistic” about the sales results at the end of this challenging year. “2023 has not been an easy year for online trading. We now expect a slight recovery for Christmas activities.”
More orders, smaller amounts
Otto observes that customers spend an average of 7 percent less per order, but the number of orders is increasing twice as fast (plus 14 percent). In economically challenging times, Otto.de manages to engage online shoppers. As Opelt states:
‘Overall, we are making a slight gain in market share.’
The CEO attributes the growth to the “very positive development” of the platform business model. Currently, 6,500 partners are connected to Otto.de, compared to only five hundred at the beginning of 2020. Investments in self-service and automatic integrations have paid off.
The growing importance of third-party sales
Otto is the namesake and flagship of the Otto Group, which, after the COVID-19 period, is facing declining revenues. Third-party sales are an important and growing source of income for Otto, just as they are for MediaMarkt and Zalando, also based in Germany.
MediaMarkt and Zalando also increasingly dependent on platform sales
Ceconomy, the owner of MediaMarkt and Saturn, saw its online revenue decrease, but the marketplace revenues more than doubled. By the end of July, there were more than a thousand sales partners active on the consumer electronics websites. Zalando now attributes 39 percent of its slightly decreased trading volume to sales partners on its website, which is 4 percentage points more than a year ago.