German marketplace OTTO is preparing to open up their marketplace to European selling partners for the first time. Up until now, only sellers established in Gemany (with a German VAT ID) were eligible to sell on the platform.
OTTO is a platform with size and scale – In the past year, year, a total of 11.7 million customers bought from OTTO (+3%), of which 2.9 million were new customers. The number of total items in the shop has risen by 26% to more than 18 million. And this is while German ecommerce in general saw a decline of -11.8 percent compared to the previous year.
In the past year, OTTO increased the number of marketplace partners by 33% to more than 6,500. One-third of the platform’s revenue comes from their marketplace business.
Significant changes to the marketplace include the all important support of EU VAT numbers, with Know Your Customer checks extended to include EU merchants rather than being tailored specifically for German merchants. And of course they are ramping up to support payouts across Europe rather than just to German bank accounts.
This marks a significant step change for OTTO, pivoting from being a German marketplace to a European marketplace, but worth noting, they’re not in a race to the bottom and aren’t interested in low ASP low quality goods. Their goal is to maintain quality that their customers have come to expect from the OTTO brand. This means that OTTO will remain a gated marketplace where sellers will have to apply to list.
From summer, OTTO will also open the market place range for new product groups. Partners will be able to items that are not priced at 19 percent VAT, including dietary supplements or energy technology, such as solar panels. In the past financial year, the range had already been expanded to include pharmacy products.
Today, we work exclusively with partners who have a German VAT ID. In the future, we want to remove this hurdle in order to enable our customers to have an even greater choice of products and brands. The European perspective is deliberately chosen: We rely on products that meet the highest quality and sustainability requirements. That’s why we choose very carefully who is allowed to sell their goods on our marketplace – and who is not. The cheapest-produced disposable goods will continue to play no role in OTTO’s business model.
– Marc Opelt, Chairman of the Executive Board, OTTO
