BUSINESS NEWS

JENS BERGERMANN

In today’s digital age, where technology is inseparable from daily life, online marketplaces are playing an increasingly vital role. These platforms act as virtual marketplaces where sellers showcase their products and services, and customers can shop with ease. With the rise of digitization and changing consumer buying habits, online marketplaces are gaining more and more importance in Switzerland. From global giants like Amazon and eBay to platforms like Galaxus and Manor, the offerings cater to both local and international sellers.

What are the strengths and weaknesses of Swiss marketplaces? Swiss marketplaces stand out for their reliability, local presence, and high-quality standards, which contribute to a positive shopping experience. However, compared to global marketplaces, they have limited offerings, reach, and higher prices. Despite these weaknesses, Swiss marketplaces provide attractive business opportunities for both local and international sellers, contributing to the vibrancy of the Swiss retail sector.

The goal of this article is to provide you with a compact overview of the diversity of Swiss marketplaces and to help you make an informed decision when choosing the right online platform.

Advantages of Online Marketplaces

The advantages are clear: They offer a wide range of products and services from various industries, allowing consumers to shop conveniently from home. The extensive reach of Swiss marketplaces today not only influences shopping behavior but also impacts the business landscape and the competitiveness of the Swiss economy.

For local sellers, online marketplaces provide an opportunity to make their products accessible to a broader audience without the costs and challenges of maintaining a physical store. By reaching a larger market, they can expand their reach and increase their revenue potential. Additionally, local sellers benefit from the platforms’ technological infrastructure and marketing expertise to promote and sell their products more effectively.

For international sellers, Swiss online marketplaces also offer an attractive entry point into the Swiss market without needing a physical presence. By leveraging these platforms, they can reach potential customers in Switzerland and tap into local distribution channels without navigating complex regulatory requirements. This opens up new business opportunities and enables them to benefit from the strong purchasing power and high standard of living of the Swiss population.

Overall, the variety of online marketplaces in Switzerland and their significance for both local and international sellers contribute to the dynamism of the Swiss retail sector, creating an efficient and diverse shopping experience for consumers while offering opportunities for growth and expansion for sellers.

Galaxus: The Largest Marketplace in Switzerland

Digitec Galaxus AG is by far the largest marketplace in Switzerland and a market leader ahead of Amazon, offering a wide range of products across categories such as electronics, household goods, fashion, sports equipment, and more. Galaxus was founded in 2001 by three friends, Florian Teuteberg, Oliver Herren, and Marcel Dobler. The online giant acts as a mediator between marketplace partners and Swiss consumers: managing product data, administering orders, and handling the entire payment process.

Interested sellers can register and, after approval, list their products and services on Galaxus and Digitec, the most relevant platform in Switzerland for digital products such as IT, telecommunications, and consumer electronics. There are no registration or initial fees to sell on Digitec Galaxus AG. The online marketplace charges a variable fee for each successfully sold item, ranging between 7% and 20% depending on the product category. The Swiss online shop places great importance on full transparency: more detailed information about Galaxus’ services and costs is available on their website. Shipping, order processing, customer service, marketing, and customer relationship management fall under the responsibilities of the respective sellers.

Since transitioning into a marketplace in 2016, Galaxus has continuously expanded its product range and now offers over 6.3 million products. An impressive 85% of this assortment comes from 300 marketplace partners, ensuring a diverse product selection and broad market presence. The COVID-19 pandemic gave Galaxus an additional boost, with a 59% revenue increase in 2020 and a platform revenue of 1.826 billion CHF. These remarkable figures are mirrored in the platform's growing user base: over 3 million active users in 2023 and an average of 27.3 million visits per month.

Notably, Galaxus provides excellent services such as same-day delivery, which was expanded to cover 60% of Swiss households as of last August. This makes shopping on the Galaxus marketplace not only convenient but also highly appealing to customers who value fast delivery.

With a revenue of 2.744 billion CHF in 2023 and a strong growth rate of 45% between April 2020 and March 2021, Galaxus solidifies its position as a major player in the Swiss e-commerce market.

Strengths of Galaxus

Galaxus provides Swiss consumers with a convenient and diverse shopping experience through its user-friendly interface and comprehensive product range. Additionally, the platform offers numerous benefits for sellers. Here are the key highlights:

• Access to a broad customer base thanks to its immense reach and popularity in Switzerland

• Potential for increased revenue through presence on one of the most profitable online shops

• A professional environment for selling products

• Support with customer acquisition and retention

• A technologically advanced platform for an efficient sales process

Weaknesses of Galaxus

As a major sales platform in Switzerland, Galaxus offers numerous advantages for German merchants. However, there are also some drawbacks to consider:

• lack of insights into the target audience, such as customer search behavior

• customer data cannot be used for marketing purposes outside the platform

• complex system architecture leads to inconsistent visual presentation of product categories and complicates navigation

• no option for joint marketing campaigns between Galaxus and merchants

• high standards for delivery performance (short response times, etc.) and product data quality result in significant effort for merchants

• high technical requirements for merchants in terms of IT expertise and integration capabilities

• preference for partnerships with large and established merchants

Zalando: The Marketplace for Fashion and Beauty

Zalando, Europe’s leading platform for fashion and beauty, has experienced impressive growth since transitioning to a marketplace model in 2015. With over 35 million active customers across Europe and a focus on local merchants, Zalando has established itself as a major player in retail.

Despite strong growth in 2020 and 2021, the company saw growth stagnate in 2023 but maintained stable revenues of €10.3 billion. In Switzerland, Zalando generated a low double-digit share of its total revenue. Since 2021, Swiss merchants have been able to partner with Zalando, and the company plans to expand its network from 4,000 to 6,000 stores as part of its “Connected Retail” program, signaling continued platform expansion and diversification.

The Zalando Partner Program, which includes the marketplace and Connected Retail, has gained importance and contributed 36% of total revenues in 2022. Zalando's future looks promising, with the company aiming to expand its offerings and strengthen customer loyalty through innovative services and partnerships.

Strengths of Zalando

With a wide range of products and a user-friendly online shopping experience, Zalando offers numerous strengths for German merchants in Switzerland:

• profitable positioning and high brand recognition in the Swiss market

• massive reach and a broad customer base

• renowned fashion and lifestyle specialist with strong customer loyalty

• brand partnerships

• high flexibility in pricing

• Swiss merchants have only been accepted since June 2021, providing an opportunity to establish a strong presence early and secure better terms

• offers logistics services through Zalando Fulfilment Solutions (ZFS) in Europe, including distribution in Switzerland

Weaknesses of Zalando

Despite its popularity and reach in Switzerland, there are some weaknesses:

• marketplace partners strengthen major competitors of Swiss fashion retailers

• €40 base fee, with increased sales commissions starting in April and July 2024, sometimes above industry averages

• time-consuming and lengthy KYC (Know Your Customer) process

Manor: Major Non-Food Retailer in Switzerland

Manor, founded in 1902 by brothers Maus and Léon Nordmann in Lucerne, is now the leading Swiss department store chain and the largest non-food retailer in Switzerland, operating 59 department stores. Since launching an online marketplace in 2021, Manor has significantly strengthened its market presence, achieving a 98% brand recognition rate in Switzerland and generating a revenue of 100 million CHF.

In 2022, Manor introduced a new frontend and mobile-first strategy for its marketplace, which now accounts for over 70% of its traffic. Although online sales in 2023 still represented a single-digit percentage of total revenue, CEO Roland Armbruster continues to invest in more profitable online ventures, including a dedicated mobile app and omnichannel solutions.

The company plans to expand its product range by integrating selected partners, who can easily register via a contact form. Partners pay a fixed base fee of 39 CHF per month and variable costs that vary depending on the product category. Partners must align with Manor's assortment policy and meet certain basic requirements, such as service-level agreements.

Manor's Strengths

With its extensive presence and strong reputation in Switzerland, Manor offers marketplace partners a range of advantages:

• long-standing history and strong brand recognition

• extensive network of stores and an omnichannel approach, meaning marketplace partners' products are available in all department stores through in-house ordering

• synergies created by department stores, such as Click & Collect

• deep market knowledge from long-standing presence in the Swiss market, effectively leveraging local insights

• high flexibility in pricing strategies

Manor's Weaknesses

Despite its strengths, Manor also has some drawbacks:

• lower online presence and visitor numbers compared to other Swiss online shops

• does not offer logistics services

• reliance on store sales and brick-and-mortar retail, making the platform more vulnerable to market fluctuations

• highly selective in onboarding new vendors and limited integration of new products

Home24

Home24 is a leading online marketplace for furniture and home accessories, headquartered in Berlin. Founded in 2009 by Philipp Kreibohm and Felix Jahn, the company has grown into a key platform in the furniture trade sector. With its wide range of products and focus on high-quality items, Home24 offers customers a convenient way to shop for furniture online. The company operates in seven European countries, including Switzerland.

In 2022, the number of active customers across Europe reached approximately 1.99 million. The previous year, Home24 had its peak with around 2.2 million customers. Over the years, Home24 has demonstrated steady growth, further strengthening its presence in the furniture and home accessories market.

According to Home24's annual report, the company maintained a steady presence in the Swiss market, with revenue contributions accounting for 12% of total sales, equaling 63.8 million CHF. This share has remained stable since 2017, with a slight drop to 11% in 2019. In 2020, Home24 experienced a 43.7% growth in revenue in Switzerland, outpacing the overall growth of online retail. In the Home & Living category, the company achieved remarkable growth of 78.9%, with temporary spikes exceeding 150% compared to previous year periods.

The fees Home24 charges merchants in Switzerland are not publicly disclosed and are typically negotiated on a case-by-case basis. Common arrangements include a combination of a fixed base fee and variable costs per sold item or a percentage of the sales revenue.

Strengths of Home24

These strengths make Home24 a leading platform in the Swiss online furniture market, offering an attractive option for both customers and merchants:

• wide product range

• user-friendly platform

• high product quality

• reliable customer service and strong customer loyalty

• presence in seven European countries

Weaknesses of Home24

The following weaknesses could impact Home24's performance in Switzerland and may require strategic actions on your part to address them:

• the furniture market in Switzerland is highly competitive, posing challenges for differentiation and positioning on a platform

• limited local adaptation to the Swiss market

• dependence on external partners, such as various suppliers and logistics providers

• mandatory 30-day return policy leads to high logistical efforts and the need for warehousing in Switzerland

Amazon: Larger Marketplace in the EU Without a Foot in Switzerland

The unique features of Swiss marketplaces compared to Amazon mainly lie in the specific requirements and conditions of the Swiss market. This is partly due to the different tax and customs regulations. As a result, many retailers decide against selling through Amazon in Switzerland. Additionally, Amazon is not as established in Switzerland as in other countries, which reduces its appeal as a sales platform.

Although Amazon.de offers international shipping, free shipping and Prime benefits are not available to customers in Switzerland. Furthermore, there are import restrictions on certain products that limit shipping to Switzerland, such as food, medical products, or items for business, industrial, or scientific use.

Since January 2019, Amazon.de has been charging Swiss VAT and import fees on products shipped to Switzerland. While Amazon covers these fees for items sold by Amazon, it does not cover them for products from Marketplace sellers. Customers do have the option to request a refund for customs fees, but the decision ultimately lies with the sellers. These factors make it less attractive for many retailers to sell their products to Switzerland via Amazon.

However, Amazon can still be an option for Swiss retailers to sell to other countries due to its massive reach. Swiss retailers can benefit from Amazon's global presence and sales opportunities without dealing with the specific challenges of selling in Switzerland.

Comparative Analysis and Conclusion

The leading online marketplaces in Switzerland, including Galaxus, Zalando, Home24, and Manor, as well as eBay and Ricardo, each have specific strengths and weaknesses. If your company is not up for the effort of offering products on one or more online marketplaces, you don’t have to turn your back on e-commerce. Distribution partner SURS helps you successfully distribute and sell your products on the major Swiss marketplaces.

For foreign retailers, different recommendations apply depending on the product category and target audience. Galaxus stands out for its wide range of products, while Zalando excels with its international presence and strong brand. Home24 offers an extensive selection in the Home & Living category and a user-friendly platform, while Manor focuses on its regional expertise and store network.

In the future, trends such as omnichannel strategies and personalization will continue to shape the Swiss online marketplace business. Integrating these e-commerce trends in Switzerland into business models will be crucial to maintaining your competitiveness and improving the Swiss online shoppers’ customer experience in a future-proof manner. Against this backdrop, it will become increasingly important to present your products on the largest marketplaces.

FAQs

How can I start selling on a Swiss marketplace?

To start selling on a Swiss marketplace, register on platforms like Galaxus, Zalando, or Manor. Create an account, list your products, and familiarize yourself with the specific features and requirements of each platform.

What fees do sellers face on Swiss marketplaces?

The fees for sellers on Swiss marketplaces vary depending on the platform and services offered. Typical costs include monthly base fees, sales commissions, and optional add-ons such as advertising. It is advisable to review the fee structures of each platform.

How can I successfully sell my products on a Swiss marketplace?

To successfully sell your products on a Swiss marketplace, optimize your product descriptions and images, offer competitive prices, comply with local laws and regulations, and strategically use marketing tools such as advertising and promotions.

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