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Business

Online giant Amazon enters the grocery business in Germany

Amazon has begun selling food, including fresh products, to consumers in Germany. The US company hopes to succeed in a market where numerous German food retailers and Internet startups so far have struggled -- or failed.

Amazon distribution center

Amazon started selling books, but has gone far beyond that

Consumers in Germany can now turn to Amazon to purchase not only books, movies and other popular merchandise but also groceries, including fresh fruit, vegetables and meat.

The new online offering covers more than 35,000 products. Most of them are supplied by a network of more than 60 suppliers, including Froodies, Gourmantis and Moevenpick.

Same-day delivery

Delivery for edibles is the same as Amazon's normal service in Germany, which is free for purchases above 20 euros. And, initially in Berlin and Frankfurt, the company guarantees same-day delivery for orders made before 11 am.

Chicken and vegetable dish

Amazon is hoping that convenience will spur people to buy food online

Amazon has been selling a range of food products in the United States since 2006, adding perishables like grapes and steaks a couple years ago.

But online food sales have been anything but easy. Prior to the launch of its own online grocery offer, the company made numerous investments in Web-to-doorstep grocery delivery ventures in the US during the dotcom boom of the late 1990s.

Homegrocer.com, Kozo.com and Webvan were among them. All failed, largely due to the need to build up a massive logistical infrastructure.

Short distances to stores

Since then, Amazon claims it has learned to work with regional partners to overcome challenges such as sourcing local products and providing an uncomplicated delivery infrastructure. This regional partnership model is what the company hopes to transplant successfully in Germany.

Edeka store

Edeka is one of several big German supermarkets to test the waters for online food sales

Like the US, Germany has seen its fair share of online grocers come and go.

"All of the big food retailers in Germany, like Edeka, Real and Rewe, have launched online delivery services, then discontinued them only to try again, but so far without huge success," independent retail consultant Ulrich Eggert told Deutsche Welle. "Germany is a country of short distances to stores. People are simply used to going to stores to buy their groceries."

Online food sales in Germany, according to Wolfgang Adelwarth at market-research company GfK, account for less than 1 percent of the country's 150-billion-plus grocery market.

Trend toward convenience

"I see a very limited market for online food sales," Adelwarth told Deutsche Welle. "There is a market for speciality products, like wine, and there is a group of young professionals who are too busy too shop in stores, but beyond that I don't see huge demand in Germany."

Still, Eggert points to a trend toward convenience among German consumers, both young and old, that could spur online food sales.

But a successful online grocery delivery service in the country, he warns, will not come quickly or cheaply.

"It will take time and money, which Amazon has," Eggert said. "The company clearly sees an opportunity."

Author: John Blau
Editor: Kyle James

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