Dusseldorf So far, few people in Germany have heard of the name Galaxus. But Migros, after all the Swiss trading company with the highest turnover, is determined to develop this online platform into one of the largest German e-commerce retailers. In Switzerland, Galaxus is already bigger than Amazon. It started to build up its presence in Germany almost three years ago – and now wants to really start its expansion.
The goals are ambitious: “We want to be among the top five German online shops,” explains Florian Teuteberg, who co-founded Digitech Galaxus and leads it as CEO. That would correspond to a turnover of more than one billion euros.
The current rate of growth in Germany is apparently so promising that Migros, which holds 70 percent of Digitech Galaxus AG, now wants to invest properly. “The growth of the last three years, the feedback from Galaxus customers in Germany and the Digitec Galaxus concept for the next expansion phase of Galaxus Germany have convinced us,” says Fabrice Zumbrunnen, President of the General Management of the Federation of Migros Cooperatives. “We are therefore continuing our ambitious growth strategy and are now intensifying our joint activities in Germany.”
The head of the Migros Cooperative has high hopes for the German market.
(Photo: Digitech Galaxus)
In Switzerland, the online retailer, founded in 2001, increased its sales by 59 percent last year. The platform turnover there was already 1.8 billion Swiss francs (1.66 billion euros) in 2020. By way of comparison: Amazon had sales of just 473 million euros in Switzerland in the same year.
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Galaxus is now also presenting similar growth rates in Germany. The company has already made more sales this year than in the whole of 2020. By the turn of the year, the retailer had 300,000 customers in Germany, now there are already 500,000. He does not yet give absolute sales figures.
Storage space in Krefeld is almost quadrupled
The retail expert Gerrit Heinemann rates the 500,000 customers as a success – provided that they are really active customers, i.e. none who do not come back after a one-off purchase. Then a three-digit million turnover should already be possible.
However, he thinks the hope of making it into the top five is somewhat optimistic. At the start of Galaxus it looked a little different, but in the meantime some established retailers such as Mediamarkt-Saturn have also increased their online trade very strongly during the pandemic. However, he sees a place among the ten largest German online retailers as achievable for Galaxus.
The founder of Digitech Galaxus wants to turn his company into one of the largest German online retailers.
(Photo: Digitech Galaxus)
In order to further accelerate the pace, Galaxus now wants to almost quadruple its storage space in Germany. “Our current logistics center in Krefeld with an area of 5,000 square meters is bursting at the seams,” says Teuteberg. After all, the company already offers more than 500,000 different items – from electronics to office items, garden furniture, beauty products and housewares to erotic toys.
In a few weeks, a lease will be signed for a new warehouse with an area of 17,000 square meters. The move is planned for the coming year.
The aim is to continue to expand the range based on the model of the Swiss parent company. However, there are two platforms there. The group sells electronics under Digitech, the Galaxus platform is an online department store similar to Amazon with a very wide range, including jewelry and fashion. There are also eleven stationary branches under the name Digitech. The company is currently also massively expanding its logistics in Switzerland.
Online shop, shopping community and consumer magazine
The company owes its rise to the Swiss market leader in less than 20 years to the fact that it does a lot differently than most of the major online retailers. The company deliberately cultivates its community of customers who rate articles and give each other tips on choosing. There are up to 50 detailed customer ratings among the products in demand.
Galaxus also has a 25-strong editorial team at its German headquarters in Hamburg and Zurich, which informs customers about new trends and also carries out its own product tests. “Galaxus is not just an online shop, but also a shopping community and consumer magazine,” said Teuteberg. A year ago, Galaxus was the first online retailer to offer customers the option of making purchases carbon-neutral with a surcharge.
Galaxus has now introduced a tool that shows an overview of the price development over the past few months for all products on offer. Such a function is already available in price comparison portals such as Idealo, but not in online shops. A representative survey by the market research institute GfK recently showed that 66 percent of online shoppers would like such a function.
In Switzerland, Galaxus also operates a marketplace through which independent retailers can offer their goods. Galaxus then earns from the commissions. In order to quickly broaden the range, the company is also looking into such an expansion for the German market.
With the expansion strategy of Galaxus, the battle of the platforms for the places behind Amazon intensifies. The Otto Group and Zalando, which are in second and third place, have also expanded their online shop into a marketplace where other retailers also offer their products. At the same time, however, the first competitors have already scaled back their ambitions. Rewe is giving up its marketplace for third-party retailers at the end of the year.
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