Otto Group set to invest 300 million euros in e-commerce projects and achieve 8 billion in online turnover by 2015

05.04.2013 | Hamburg

The Group aims to continue to benefit from the dynamic development of online retail and plans to invest some 300 million euros by 2015. On the one hand the Group aims to drive the development of promising start-ups, and on the other hand to further develop its existing multichannel retailers.

With a sharper focus on e-commerce the Otto Group intends to lay the foundations for continued success in online retail. The e-commerce pioneer plans to raise its online turnover from today’s 5.7 billion to 8 billion euros by 2015. To achieve this, the Group is investing some 300 million euros, particularly in multichannel retail and Internet pure players.

Worldwide online retail via more than 60 e-commerce websites is the Otto Group’s growth driver and turover increased in the past financial year by around 400 million to top the 5.7 billion-euro mark. This means online turnover currently makes up some 57 per cent of the Group’s total trading turnover, and already over 62 per cent in Germany. Smartphone and tablet-based shopping is increasingly boosting the Group’s online turnover: overall, the share of the Group’s gross online turnover via these new types of end-terminal has almost tripled in recent years. Over 80 per cent of all Otto Group online shops offer smartphone-optimised shopping solutions.

“Possibly more than any other player on the market, the Otto Group is in the position to cover the full e-commerce value chain, from the expansion of promising start-ups to the delivery of goods to the end-customer – and that’s worldwide“, emphasizes Dr Rainer Hillebrand, who in addition to his function as Vice Chairman of the Otto Group Executive Board has steered the Group’s e-commerce activities since August 2012 in the more than 20 countries in which the Group is active. At a press conference Dr Hillebrand presented the Otto Group’s focussed e-commerce strategy, which is based on the four pillars of Multichannel Retail, Financial Services and Service, Internet Pure Players and Venture activities.

Multichannel Retail: channels increasingly dovetailed
In the Multichannel Retail segment the Otto Group reported global turnover of some 10 billion euros in the past financial year. In future too, the Group is counting on the development of its firms to become e-driven companies and on the dovetailing of the individual sales channels. Here, amongst others the multichannel specialist sporting goods retailer SportScheck with its head office in Munich and the Chicago, US-based furnishings retailer Crate and Barrel are success models: both companies offer the consumer an integrated shopping experience through the networking of their touchpoints, including over-the-counter stores, online, mobile and tablet webshops. Going forward, this means a strong focus on cross-channel services: SportScheck, for instance, already equips its new stores with iPad stations to provide extended customer advice.

Future-orientated Financial Services and Services
A further pillar of the Otto Group’s e-commerce strategy rests on commerce-related Financial Services and Services. Here too, the Group is relying on the coherent and sustainable expansion of its offer portfolio: with Yapital, it is launching a new kind of cross-channel payment solution for multichannel retail operators this summer. Yapital has already successfully acquired clients both inside and outside the Otto Group, including SportScheck and the Görtz Group.

The same goes for Hermes NexTec: the Web-enabler from the Hermes Group transforms offline brands to become strong online retailers. Besides the Otto Group company Arqueonautas, NexTec’s client base includes companies such as Wolford and Escada.

High investment in Internet Pure Players
With the goal of sustainable and profitable growth in e-commerce, Otto Group is concentrating on precisely these success models: for example, myToys.de, the online shop established in 1999 for child-related products plans to increase its turnover in the coming years with a clearly defined growth strategy from today’s 280 million to around 500 million euros. The beginning of 2014 will see the launch of a new and innovative e-commerce business model mamed Project Collins, with assortments from the segments of Fashion and Home Living targeting a young, female customer group. Benjamin Otto, son of entrepreneur and Supervisory Board Chairman Dr Michael Otto, and Tarek Müller are responsible for the project.

Participating in promising start-ups with a three-figure investment
Since autumn 2008 the Otto Group has been active in the venture-capital business, and is today invested in over 100 participations. Through the venture capital company e.ventures the Otto Group hold stakes in European, Asian, North and South American businesses, amongst others, plus twelve start-ups in Russia and now seven in Brazil. Since early 2012 the Otto Group is the main shareholder in Project A Ventures, which supports young online companies in the early phase; this venture has already secured participations in over a dozen start-ups. The Group has already invested a three-figure million sum in participations in new business concepts via e.ventures and Project A.


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