Foreign competitors squeeze Swiss e-commerce firms

Amazon could increase its 8% market share in Switzerland with investment Keystone

The Swiss e-commerce sector became more crowded last year, with more foreign firms and the increasing online presence of brand names putting pressure on domestic enterprises such as Ricardo and Siroop.

A study by the University of Applied Sciences and Arts Northwestern Switzerland found that revenues dropped for a third of the 36 Swiss online retailers surveyed. Some 90% of the respondents felt that foreign competitors would make life even harder in future.

The e-commerce study revealed that foreign enterprises increased their market share from 18% to 20% last year. Domestic market share would shrink even further if Amazon picks up its meagre investment in Switzerland, with no domestic firm really equipped to beat off the US giant, the report concluded.

But domestic online retailers are not taking the pressure lying down, according to the study’s author Ralf Wölfle. “Swiss companies are no longer blind to e-commerce growth,” he said.

Such companies are investing more heavily in logistics and in improving their operational efficiency, recognising that customers can be lost if anything goes wrong with the first delivery.

Switzerland’s largest retail chain Migros has also started experimenting with physical pick-up points for customers. Migros opened up 290 such stations last year which increased their physical connection and visibility with customers.

Eight out of 10 companies surveyed believed that such a strategy would reap benefits in future.