industry report retail - expandera … sweden 3 the german retail sector offers numerous...
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CONFIDENTIAL
FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY
INDUSTRY REPORT
RETAIL
BUSINESS SWEDEN
Berlin, Germany
2016
THE GERMAN RETAIL INDUSTRY
With more than 80 million inhabitants and 80 cities exceeding 100.000 inhabitants, Germany is a highly
attractive retail market. Being the third-largest retail market in Europe, with EUR 408 billion in turnover, it
is more than five times bigger than the Swedish retail market. The German retail market is characterised
as highly competitive. Despite a high level of maturity, the market shows a continuously positive growth.
Trends show a particularly strong growth in e-commerce, while stationary retail still dominates the
market.
BUSINESS SWEDEN
Business Sweden in Germany is working with a broad range of Swedish companies within the retail
sector, including companies from grocery retail, electronics and home appliances, furniture and apparel.
Business Sweden continuously supports Swedish companies’ internationalisation processes through
market analyses, partner searches, acquisition target support, local company establishments as well as
marketing and sales support. Business Sweden also organizes promotional activities, such as seminars
on selected themes, campaigns for Swedish goods in German stores, and showcases on food fairs.
BUSINESS SWEDEN 2
INTRODUCTION
BUSINESS SWEDEN 3
THE GERMAN RETAIL SECTOR OFFERS NUMEROUS
OPPORTUNITIES
Industry
characteristics
Industry
structure
Opportunities
and trends
Germany is the third-largest retail market in Europe with EUR 408 billion in turnover,
more than five times bigger than Sweden
Retail is an important industry, employing 3 million people across 355,000 companies
The retail market shows a continuously stable growth
The retail market is oligopolistic, dominated by large domestic retailers
The market is mature and highly competitive and prices are among the lowest in Western
Europe
Grocery and electronics and household appliances are the largest retail segments
The demographic transition toward older people and growing number of single
households together with urbanization create new customer groups with new demands
Fastest growing customer base is in cities and urban areas
E-commerce & mail order are the fastest growing sales channels
SOURCE: BUSINESS SWEDEN ANALYSIS
KEY TRENDS IN THE MARKET
BUSINESS SWEDEN 4
KEY TRENDS AND BUSINESS OPPORTUNITIES
DEMOGRAPHIC
TRANSITION
1 Aging population, higher number of
immigrants and increasing share
single households
URBANISATION
Urban regions growing, retailers
concentrating to locations with
highest consumer density and flow
2
MARKET
CONSOLIDATION
Competition drive consolidation.
Large retailers take larger market
shares
3
E-COMMERCE
With a growth rate of 17% in 2014,
online sales is the fastest growing
sales channel in retail
4
SOURCE: HAMBURG WORLD ECONOMICS INSTITUTE, GERMAN TRADE UNION, STATISTA (2016)
437,9
445,4 450,9
458,3
472,4
2011 2012 2013 2014 2015*
TURNOVER GERMAN RETAIL MARKET AND
FORECAST 2015 IN BEUR*
KEY STATISTICS IN THE MARKET
* STATIONARY E-COMMERCE ** ESTIMATED FORECAST
2015**
BUSINESS SWEDEN 5
SOURCE: STATISTA
428 420 408 397
255
194
146
95 84 84 81 73 53 46
GERMANY IS THE THIRD-LARGEST RETAIL MARKET IN
EUROPE, FIVE TIMES BIGGER THAN SWEDEN
* STATIONARY RETAIL
THE 14 LARGEST RETAIL MARKETS IN EUROPE BY TURNOVER IN BEUR* 2014
BUSINESS SWEDEN 6
THE GERMAN RETAIL MARKET IS LARGER THAN
SWEDEN’S
SOURCE: HDE (2015), STATISTA (2016), HANDELSRÅDET (2015), SCB (2016)
More than six
times more turnover
73 BEUR turnover
17% of GDP*
127 000 companies
250 000 employees
#REF! #REF!
408 BEUR turnover
15,8% of GDP*
355 000 companies
3 000 000 employees
Employs 12 times
more people
More than twice as
many companies
GERMANY SWEDEN
Similar economic
importance
* 2013
KEY STATISTICS (2014)
BUSINESS SWEDEN 7
THE NUMBER OF COMPANIES ARE DECREASING WITH A
FEW COMPANIES DOMINATING THE MARKET
NUMBER OF COMPANIES 2005-2013
2005 2007 2009 2011 2013
360,000 companies
410,000 companies
NUMBER OF COMPANIES BY TURNOVER SIZE AND
MARKET SHARE OF LARGE COMPANIES
2013
750
88 050
271 200
Large companies
Medium companies
Small companies
54%
SMALL COMPANIES = 17 500 EUR TO 500 000 EUR, MEDIUM COMPANIES = 500 000 EUR TO 50 MEUR, LARGE COMPANIES = 50 MEUR TO AND OVER 250 MEUR SOURCE: FEDERAL STATISTICAL AGENCY
RETAIL REVENUE DISTRIBUTION BY SALES CHANNEL,
2009- 2014
2009 2010 2011 2012 2013 2014
E-COMMERCE AND MAIL-ORDER IS GAINING MARKET
SHARE
SOURCE: GERMAN TRADE UNION (HDE), MC KINSEY RETAIL REPORT, STATISTA 2014
8
Stationary retail E-commerce and mail-order retail
5,5%
E-COMMERCE AND MAIL ORDER TURNOVER IN BEUR
NOMINAL CHANGE PER YEAR %
21,9 23,7
26,1
29,5
33,1
38,7
2009 2010 2011 2012 2013 2014
8% 10%
13%
12% 12%
17%
5%
5%
5%
6%
6%
7%
BUSINESS SWEDEN
GERMAN RETAIL IS CHARACTERISED BY HIGH QUALITY,
LOW PRICES AND WIDE ASSORTMENT
SOURCE: FEDERAL STATISTICAL AGENCY, STATISTA
9
German customers require high
quality products
Quality is specified through
certificates and standards
Many international industry
standards rests on German
foundation
Quality certifications
High Quality
Price is the dominating sales strategy
Low margins have made it difficult for
foreign companies to establish in
Germany
Low prices
Retail price index EU28
The individualization of German
customers is demanding retailers to
have a wide variety of products
Wide assortment
Variety of products
Sweden Germany
BUSINESS SWEDEN 10
THE RETAIL MARKET CONSIST OF FOUR MAIN PRODUCT
CATEGORIES
2014
204
Furniture &
DIY
Electronics
&
Household
appliances
Apparel
Groceries
& tobacco
41
85,5
77,5
CHARACTERISTICS
RETAIL TURNOVER BY PRODUCT CATEGORY
IN BEUR
SOURCE: FEDERAL STATISTICAL AGENCY
BUSINESS SWEDEN 11
GROCERY RETAIL IS THE LARGEST MARKET SEGMENT
SOURCE: TRADE DIMENSIONS HDE, STATISTA 2015
Market
Trends
The size of the German market attracts many international
companies and the competition is fierce
The market structure is highly oligopolistic with extremely low
margins
Five retail groups control 75% of the market for grocery and
non-grocery retail
Price is the dominating sales strategy and the market has
many large discount retailers
Online grocery sales is growing fast but from very low levels
The market for organic- and fair trade food is constantly
growing
204
BEUR
GROCERY RETAIL IS CHARATERISED BY HIGH COMPETITION AND LOW PRICES
2014
204
GROCERY RETAIL TURNOVER IN BEUR
CHARACTERISTICS
BUSINESS SWEDEN 12
THE RETAIL MARKET FOR ELECTRONICS IS STRONGLY
OLIGOPOLISTIC
SOURCE: STATISTA 2015
Market
Trends
Saturn and Media Markt account for half of the market
The price consciousness by the customers is driving the
demand
The share of consumer electronics sales online is increasing
and more than 30% of all computers are bought online
20%
15%
15%
50%
85,5
BEUR
85,5
BEUR
ELECTRONICS RETAIL IS CHARACTERISED BY FEW, STRONG PLAYERS AND PRICE-CONSCIOUS CUSTOMERS
2014
85,5
ELECTRONICS & HOUSEHOLD APPLIANCES
TURNOVER IN BEUR
CHARACTERISTICS
BUSINESS SWEDEN 13
THE MARKET FOR FURNITURE & DIY IS GROWING
SOURCE: TRADE DIMENSIONS HDE, STATISTA 2015
Market
Trends
66,3 73 74
77 80
83
2010 2011 2012 2013 2014 2015*
66,3 1 529
1 813 2 040
2 328 2 575
2010 2011 2012 2013 2014 2015*
Retail sales DIY & Furniture 2010-2015
DIY online sales 2010-2015 in MEUR
*ESTIMATED VALUES
77,5
BEUR
77,5
BEUR
THE MARKET IS EXPERIENCING STRONGER GROWTH IN ONLINE SALES THAN STATIONARY SALES
2014
77,5
FURNITURE AND DIY TURNOVER IN BEUR
CHARACTERISTICS
BUSINESS SWEDEN 14
THE GERMAN APPAREL MARKET HAS EXPERIENCED
STRONG GROWTH THE LAST COUPLE OF YEARS
SOURCE: STATISTA 2015
Market
Trends
Zalando is controlling the largest market share of the online
market
66,3
62,1 66,5
69,1 71,2
73,6
2008 2009 2010 2011 2012 2013
Private household spending on clothing and shoes 2013 in BEUR
8400 8900 10200 11200 12300 13500 14700
2014 2015 2016 2017 2018 2019 2020
Apparel e-commerce sales and growth projection until 2020
41
BEUR
APPAREL IS A GROWING MARKET, WHERE E-COMMERCE HAS BECOME INCREASINGLY IMPORTANT
2014
41
APPAREL RETAIL TURNOVER IN BEUR
CHARACTERISTICS
PHASES OF INTERNATIONALISATION
PREPARATION AND A THOROUGH EXPORT STRATEGY IS
RECOMMENDED
SOURCE: BUSINESS SWEDEN ANALYSIS
EVALUATE
ENTER
ESTABLISH
EXPAND
Preparing for
internationalisation and
growing your business
Prioritising between
markets
Understanding specific
markets chosen
Setting the market
entry strategy
Finding a business
partner or strategic
alliance
Establishing contact
with opinion leaders
and stakeholders
Establishing a legal
entity and
requirement for entry
Recruiting the right
personnel
Arranging for
administrative
services
Expanding your
business through
business development
Growing your business
through joint Swedish
initiatives
BUSINESS SWEDEN OFFER TAILOR-MADE SOLUTION TO FIT THE NEEDS OF YOUR BUSINESS WHEN GOING ABROAD
BUSINESS SWEDEN 15
REACH YOUR FULL
INTERNATIONAL
POTENTIAL
BUSINESS SWEDEN 16
Business Sweden Goethestr. 85, 10623 Berlin, Germany
T +49 (0) 30 893 60 600 F +49 (0) 30 893 60 666
www.business-sweden.se