Amazon-Apocalypse in Sweden?

Amazon worldSo it is confirmed now, finally tech profiles from ”the Swedish community” know it is certain, Amazon will launch its services in Sweden. The article from Breakit has it all. Maybe this is not exactly breaking news, because it has more been a question of when will Amazon, more than will Amazon. Here are three likely scenarios that could occur in the Swedish e-commerce landscape.  One scenario does of course not rule out the other. This is based on qualified guessing and experience, no guarantees or inside sources for my part.

Scenario 1

Amazon will use Sweden and the Nordic Region for testing new services and products. The Swedes are above average wealthy and generally tech savvy. The market is also relatively isolated from mainland Europe (read Germany/UK) Which means that un-successful launches can be axed and forgotten quickly. The regional market value only represents limited growth potential for Amazon, and mistakes will not be that expensive. A number of American companies already use Sweden/The Nordics as their prefered testing ground.

Scenario 2

Amazon will launch a series of highly localized B2B services in Sweden. Amazon is not only focusing on e-commerce, instead Amazon will target the real heavyweight value, which is B2B and data handling/data management. I am sure Amazon at a global level will launch a range of data intelligence services, and in the long run, these services could potentially be more valueable than e-commerce itself?

Scenario 3

The Top 100 e-commerce players in Sweden will probably feel the threat, and sales are likely to decrease if everyone should offer everything in the same marketplace, it will have a significant impact for the large players.

Get in bed with Amazon or get out of business? I don’t agree here. The e-commerce market in Sweden is valued at roughly 110 billion SEK (13.5 billion USD), which is only a fraction of Amazons annual revenue of 136 billion USD. Sweden is not going to make a huge impact on the chart below, neither is any other country in the Nordic Region, so I think there is room for both a new massive marketplace and the established e-commerce players. Market evolution will clean up and blow out players that have not earned a position.

Amazon revenue

So is this the end for Nordic E-commerce as we know it, is this the Amazon-Apocalypse coming?

I am sure the local e-merchants will put up a brave fight. This is also the time where the Nordic e-merchants consider their place in the market, becoming a slave of Amazon is not difficult, but developing your niesch and work to be the best in your category, that is far more challenging. Perhaps it is also time for Nordic players to expand their business horizon to include countries, where e-commerce is not as developed as it is in Sweden. Where is the new growth coming from? – if prices and margins are spiraling downwards?

What do you think, is the market doomed, will we all be shopping from Amazon in the future?