The news that Amazon is now selling groceries in France presents a new route to market for the major FMCG players.
Albeit in beta form for now, Amazon’s offer encompasses 30,000 items, with circa 4,000 beers/wines/spirits. While it might take time for Amazon to build a grocery range to compete with Auchan or Carrefour, there is a more immediate threat.
If Amazon Prime members, or regular Amazon shoppers, start adding grocery items to their frequently purchased bulky cupboard essentials, or health & beauty products, for that matter, it is sure to take a bite out of the major grocers’ share of wallet.
A fresh food offer, however, is likely to be some way off at Amazon France, with the UK and Germany more of a priority for now. Rumours of a launch of Amazon Fresh in London have been circulating for some time now, with a launch in Germany, the retailer’s largest market outside of the US, also seeming increasingly likely.
Talks with German suppliers
The retailer is reportedly in talks with several German suppliers of fresh groceries and German Amazon managers have been preoccupied with researching logistical processes for such categories as of late. According to inside sources any launch in the market would not happen before Autumn 2016.
In France, Amazon is, as in other markets, building an ecosystem that caters for all aspects of shoppers’ lives and their shopping missions. For big brands, it is now a case of being where the customer is, not where you want them to be. It is this that will attract the likes of Unilever and P&G to sell through Amazon.
As there is virtually no volume growth on offer in the French grocery market, and the competitive environment is nearing overcapacity, any newcomer is unwelcome. Sales generated by Amazon’s new grocery offer can only come at the expense of other players.
The convenience, speed, ease of shop and fulfilment capabilities provided by the leading marketplace is changing the way consumers shop their favourite brands. Those in France are no exception. This poses a huge opportunity for brands, but places established retailers under ever unwelcome competitive pressures.