German Holiday Web Sales Robust

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German Web merchants enjoyed a record holiday season with brick-and-clicks far ahead of pure Internet players.


"We believe that this year's Christmas business was the breakthrough on the Web for traditional companies who are massively entering e-commerce," said Christian Nolterike, CEO of Forrester Germany. "But we expect a sharp reduction in the number of Internet-only firms."


Forrester estimates holiday Web sales at 1.5 billion deutsche marks ($760 million), a dramatic increase from DM 350 million in 1999 (close to $200 million at 1999's exchange rates).


That would be 30 percent of total German Internet sales in 2000. The estimate correlates well with one issued by the German retail trade association, which put Web turnover in 2000 at DM 5 billion ($2.4 billion).


PrimusOnline, the Internet subsidiary of the Metro retail chain, reached daily sales of DM 1 million in November, easily surpassing the 2000 target of DM 100 million ($48 million) and heading for DM 150 million.


"Our Advent and Christmas business has been very good," said Primus spokesman Rene Hingst, "thanks to our concept of putting a string of specialty shops under one roof with a strong customer orientation. Sales were up 300 [percent] to 500 percent over 1999."


DVD players, digital cameras, prepaid cellular phones, scooters, real Christmas trees and espresso coffee machines did especially well, he said. Entertainment electronics and telecoms enjoyed "a small boom."


Quelle, Europe's largest mail-order house, reported Internet sales of more than DM 500 million for all of 2000 with the Christmas season seeing double the number of daily visitors.


The firm mailed 300,000 packages per day.


Otto Versand, the world's largest mail-order house, called holiday business "very good" but declined to give out Christmas sales figures just yet.


Established online stores such as Amazon.de, BOL -- Bertelsmann's online bookshop, eBay, America Online and Yahoo said business ranged from very good to satisfactory.


Amazon.de shipped 60,000 packages per day and expects to "easily" triple last year's business volume. BOL said this year's holiday business had risen fivefold. Yahoo is looking at a threefold increase.


But despite Forrester's pessimistic assessment of pure Internet players, some did very well. YouSmile.de, a 1-year-old gift start-up, was 25 percent over budget a week before Christmas and expects orders to be 40 percent higher than planned.


"We think we've become Germany's leading online gift shop," said marketing and sales director Oliver Papavlassopoulos. He credits massive use of television, online discounts and partnerships with leading portals such as AOL and T-online.


YouSmile sells items in three categories -- up-market brand goods such as Lindt chocolates, Remy Martin brandy and Steif toy animals; coupons for special events like a camel ride or a ride in a racing car; and "small creative ideas" like a customized front page of a newspaper for a customer's birthday.


Online wine shops also did well. Chateau Online, a French firm, reported shipping 500 to 1,000 daily orders in Germany, compared with 200 a year ago. The week before Christmas shipments hit 2,000.


Winegate.de boosted revenues from DM 2 million in 1999 to DM 12 million ($5.8 million) at the end of November. It was mailing an average of 500 to 600 packages per day with average orders worth DM 300 ($140).


Given this year's holiday season growth, online merchants are firmly established in the German market, according to Michael Mollenhauer at A.T. Kearny consulting. He told the newspaper Die Welt that "virtual traders are becoming a viable alternative" to retail outlets.


He said that the number of buyers among Internet users has risen sharply. But he warned that the solution of logistics problems remained the key to long-term success. Last year too many deliveries were late or lost.


The situation has improved this year, he said, but a lot of bottlenecks remained and will have to be removed. One of them is continued German reluctance to use credit cards online. Volume has doubled, but gross numbers are tiny
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