Otto to open its marketplace to European sellers
Otto saw a significant decline in revenue in the past fiscal year. However, the trading volume slightly increased, thanks to sales from partners on Otto’s marketplace. They account for one-third of the income. Otto aims to expand its marketplace offering within Europe.
The German icon of distance trading announced this alongside its annual financial results. In the fiscal year 2023/2024, Otto’s revenue decreased by 8 percent to 4.2 billion euros. This performance was “still well above market comparison”, Otto refers to figures from the Bundesverband E-Commerce und Versandhandel Deutschland (bevh), which noted an 11.8 percent decline and described 2023 as a “low point” for ecommerce in Germany.
In its press release, Otto highlights the positive development of Gross Merchandising Value (GMV), which increased by 2 percent to 6.5 billion euros. The slight increase in Otto’s platform sales, despite the ongoing crisis atmosphere in retail, makes CEO Marc Opelt cautiously optimistic. He previously referred to the platform model as the “key growth engine” of the online department store.
During the past fiscal year, Otto expanded the number of marketplace partners by 33 percent, to over 6,500. Together, they accounted for one-third of the revenue on the shopping platform.
Despite the long and growing distance in terms of revenue on Amazon, Otto is “very well positioned” with German marketplace sellers, according to Opelt. Now the company is preparing to open it up to European marketplace partners. Initially, Otto will connect warehouses of German marketplace sellers in other European countries to its platform. Starting next year, marketplace participants from other European Union member states can also offer their products on Otto’s platform. Currently, a German VAT number is required for this.
Opelt indicates that Otto has deliberately chosen the European perspective saying that the company relies on products that meet the highest quality and sustainability standards. Therefore, they carefully select who may sell goods on their marketplace and who may not. In the future, cheaply produced disposable items will also not play a role in Otto’s business model.
From summer onwards, Otto will open its marketplace to additional product categories, including dietary supplements and energy technology, ecommercenews.com reports.