Amazon prepares for launch in Sweden

Rachel Sibson
Retail Analyst
@RetailAnalysis

Date : 06 August 2020

Amazon has announced plans to launch in Sweden, the Nordic region’s largest grocery market. Here we consider which FMCG categories it usually prioritises and report on the online performance of leading Swedish grocery retailers.

First launch in a Nordic country

Launching in Sweden will see Amazon’s entry into the Nordics. Customers in Sweden can already shop on Amazon through other European countries including Germany. However, this often means Swedish customers have to pay high delivery charges. Customers in other Nordic countries will likely be able to shop on Amazon Sweden in the same way.

Alex Ootes, vice president for EU Expansion at Amazon, said: “We are optimistic that, by focusing on the things we believe customers will place the greatest emphasis on - low prices, a wide range and fast deliveries - we will eventually be able to win the trust of Swedish customers”.

Expansion into Europe

The move sees Amazon expand further into Europe, where it already has six marketplaces in UK, France, Italy, Germany, Spain, and most recently in the Netherlands. Once marketplace and logistics are established in a market, Amazon can roll out other channels including Prime Now, Pantry, Amazon Fresh and Amazon Business.

The expansion of Amazon means manufacturers should share best practice across markets in order to quickly capitalise on opportunities. It has not yet been announced which categories will be available on Amazon’s website in Sweden. When Amazon launches Marketplace and opens its first fulfilment centre, there are FMCG categories that are consistently prioritised. For instance, baby, health and beauty and household. It also takes a local approach and pet, canned and packaged and beers, wines and spirits are also often prioritised. 

ICA: online sales growth ahead of expectations, Ocado partnership ‘very timely’

Meanwhile, Swedish market leader ICA, reported that during Q1, its ‘online sales as a share of total sales were very high and at levels that we had not expected to see for a couple of years. Here it is important that we can meet the higher demand with higher capacity and a positive customer experience so that we can continue to build further upon our favourable development. In this regard, our important e-commerce project with Ocado is very timely.’

ICA’s partnership with Ocado was announced in May 2018 and will see the retailer use Ocado’s e-commerce platform and technology for its automated picking warehouses. The first customer fulfilment centre (CFC) will be built in the Greater Stockholm area in 2021.

Over the summer, ICA accelerated the rollout of the rapid delivery app, ICA Pronto, prioritising older or more vulnerable people amidst the pandemic. ICA is due to release its interim results on August 19th, where we expect it to share more insight on the growth of online.

Axfood: Q2 online growth of 128%; nearly 25% of sales from customers aged 70+, up from 4% in Q1

In its Q2 results, competitor Axfood said, ‘The pandemic has affected digitalization of society in general, and also our industry. During the quarter we continued to work hard to ramp up our digital offering and ways of working, and as a result, we also continued to grow faster than the market online with growth of a full 128%’.

The retailer also acknowledged the popularity of online among older shoppers. ‘During the quarter, nearly a fourth of orders in Willys’ and Hemköp’s customer programmes came from customers older than 70, compared with just 4% during the first quarter of the year’.

Explore our article, four ways Axfood is driving online growth.

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