FEBRUARY

2000

THE RACE FOR

ONLINE RICHES
E-Retailing in Europe

The Boston Consulting Group (BCG) is a management consulting firm

widely regarded as the global leader in business strategy. For 37 years,
BCG has worked with companies in every major industrial and global
market to develop and implement strategies for competitive success.
Founded in Boston in 1963, BCG now operates in 32 countries and 47
cities around the world. For further information, visit the BCG Web site at
http://www.bcg.com

Table of Contents
Foreword

Executive Summary

The European Online Market: Hypergrowth and Diversity

A DIVERSE COLLECTION OF LOCAL MARKETS

LOW ONLINE RETAILER CONCENTRATION ACROSS EUROPE

10

CATEGORY CHARACTERISTICS DIFFER GREATLY

12

Crumbling Barriers to Continued Online Growth

15

HIGH INTERNET ACCESS COSTS

15

LOW CONSUMER CONFIDENCE

16

AN UNEVEN PLAYING FIELD

16

LIMITED AVAILABILITY OF VENTURE CAPITAL

17

INERTIA OF TRADITIONAL RETAILERS

17

Strategic Implications: Multichannel vs. Pure-Play Retailers

19

BUILDING BRAND ADVANTAGE

20

STRATEGIC OUTSOURCING

21

A CLICKS-AND-MORTAR APPROACH

22

AGGREGATORS: A COMPELLING BUSINESS MODEL FOR CONSUMERS

23

Competing with US Players in a Borderless Market

25

COMPETING WITH INTERNATIONAL ATTACKERS

26

STRATEGIES FOR INTERNATIONALISATION

27

Lessons for European Online Retailers

1. ACHIEVE EARLY ADVANTAGE AND CONTINUE TO MOVE FAST

30
30

2. GET FULFILMENT AND CUSTOMER SERVICE RIGHT

30

3. SCALE YOUR BUSINESS TO INTERNATIONAL LEVELS

31

4. EXPLOIT THE INTERACTIVITY OF THE INTERNET TO KNOW YOUR CUSTOMERS

32

5. COMBINE ONLINE AND OFFLINE OPPORTUNITIES

33

6. EXPLORE OPPORTUNITIES FOR NEW REVENUE STREAMS

34

Methodology

35

PAGE 1

Foreword
The year 2000 will be a defining year for online retailing in Western Europe. The Internet is transforming retailing, creating new business models and new relationships between retailers and consumers. In Western Europe, the market is growing at a spectacular rate and there are few established
players the field is still wide open.
A tremendous battle is brewing over this valuable, unclaimed territory. Established European retailers
have the products, brands and offline customer base, but are struggling to keep pace with Internet
time. Many aggressive start-ups are being launched, unencumbered by legacy systems or behaviour
and possessing brands and consumer value propositions tailored to the Internet although some will
fail as they fight for shelf space online and struggle to deliver the flawless consumer experience. And
finally, well-known and experienced US online players are turning their attention to Europe, but are
finding that they have to adapt their approach to the very diverse European market. There will be a
few very big winners, and many losers, both online and offline.
This report describes the very rapidly changing market in Western Europe, outlines some of the strategic challenges facing online retailers, and provides some key lessons for successful online retailing.
The Boston Consulting Group has a continuing programme of research into the rapidly evolving
world of e-commerce. This report, The Race for Online Riches E-Retailing in Europe, is the culmination
of our extensive fact-gathering and analysis of online retailing in Western Europe. Our objective is to
understand the forces shaping the development of the market, and to help retailers create new
approaches and put them into action.
This study is unique because it is based on a comprehensive interview-based survey involving 546
European online retailers, in addition to other publicly available data sources. This bottom-up
approach based on real retailer revenues creates significantly more accurate market size and growth
estimates than top-down methodologies. In addition, it allows us to draw out the strategic implications
facing European online retailers. This report is the first of two volumes, and contains the public component of this study. The second volume provides detailed performance benchmarks and is available
only to companies that participated in the study.
For the purposes of this report, we examined the online retail markets of the United Kingdom,
Germany, France, Italy, Spain, Portugal, Austria, Switzerland, Belgium, the Netherlands and the
Nordic countries of Sweden, Norway, Finland and Denmark. Reports focusing on these individual
markets have also been prepared to provide further insight into the dynamics at a more local level.
We would like to thank the many online retailers who participated in this study by generously
providing us with their data and experience. Special thanks to the project team members from BCG,
including project leaders Tomas Lindn and Kai Gruner, as well as Anu Ora, Fredrik Burling, Timo
Iso, Helena Johnson, James Vogtle and Martine Holmsen. We would also like to acknowledge the many
individuals from BCG offices throughout Europe who gathered and analysed information from each
country covered in this report. They include Jol Benzimra, Rolf Bixner, Giovanni Castellucci, Manuel
Ebner, Henry Elkington, Nicolas Kachaner, Mikael Lvgren, Antonella Mei-Pochtler, Anthony Pralle,
Stefan Rasch, Robert Borsi, Thibaut de Bretagne, Davide Jarach, Jrgen Pauquet, Filip Pintelon,
Bruno Soria, Huw Van Steenis and Jan-Paul Van Term.
We hope you find this report a valuable and insightful guide to a market in a state of very rapid
evolution.

Patrick Forth
Vice President

David Pecaut
Senior Vice President

Michael Hansen
Vice President
PAGE 3

Executive Summary
Online retailing in Western Europe is in a state of hypergrowth, expanding three-fold in 1999.
European retailers online revenue increased by more than 200% in 1999, outpacing growth in the
US market of 145%.
Total online revenue in 1999 was 3.5 billion and will reach over 9 billion by the end of this year.
Four categories, travel, computer hardware/software, books and financial brokerage, account for
three-quarters of the online market. These categories tend to be e-commerce-friendly and driven by
innovative players.
Existing barriers to online growth, such as access costs and consumer reluctance, are beginning to
crumble.
Online retailing will continue to grow at an exceptional rate. Total European online retail revenue
is expected to rise to 45 billion by 2002, a thirteen-fold increase from 1999.
The European online market lags the US market by 1.5 to 2 years.
Online retailing currently accounts for only 0.2 % of the total European retail market, while 1.2%
of retailing in the United States takes place on the Internet.
There is no single European online market it is a collection of diverse markets.
The markets vary widely on all strategically important dimensions, such as Internet penetration,
online retail penetration, growth rates, category splits, multichannel share and payment methods.
The development of online retailing in Europe, however, has clustered into four distinct groups:
Early adopter: Sweden clearly stands out with the highest online retail penetration in Europe, but
is relatively small in terms of market size.
Awakening giants: Despite lower online penetration, the UK and Germany are large economies and
together account for 60% of the online retail market.
Middleweights: France, Italy and Spain/Portugal are important retail markets but are further
behind in online penetration.
Small but connected: These countries the Netherlands, Belgium, Switzerland, Austria, Norway,
Finland and Denmark are smaller, but have moderate online retail penetration rates and are
growing rapidly.
Multichannel retailers currently dominate the online market, but are being outperformed
by pure-plays.
Multichannel retailers taking advantage of their strong existing brands and established customer
service functions account for two-thirds of the online market.
Pure-plays are, however, outperforming multichannel retailers and are experiencing growth rates
that are on average 25 percentage points higher.
The battle between US and European players for the European market has begun.
In general, European retailers have focused solely on their domestic markets. Total exports beyond
national borders account for only 7% of European online retailers revenue; exports out of Europe
generate just 2%. Given the borderless nature of the Internet, these retailers are vulnerable to
attack.

PAGE 4

 Established online retailers from the US are targeting the lucrative European market and have
already captured a 20% market share, typically with pan-European business models. They are,
however, finding it difficult to adapt their approach to the diverse European market.
Not all strategies for geographic expansion will be the same. Online retailers need to consider the
type of product on offer (does it only have a local appeal, or can it be marketed globally?) and the
fulfilment requirements (can the product be delivered easily or is it a complex process?).

KEY LESSONS FOR EUROPEAN ONLINE RETAILERS

1. Achieve early advantage and continue to move fast Online retailers need to move quickly to take advantage of the exponential growth taking place in the European market. This window of opportunity
is closing fast as the cost of getting into the market and acquiring new customers increases. Once
retailers have established a presence online, they must implement ambitious growth plans to stay
ahead of the competition.
2. Get fulfilment and customer service right Creating basic, customer-friendly processes is essential. Some
European online retailers report rates of incorrectly fulfilled orders as high as 50% incurring
tremendous costs in terms of customer loyalty and operational efficiency.
3. Scale your business to international levels If European online retailers continue with their strong focus
on domestic markets as they do today, they will miss large international opportunities and lose out
to more vibrant competitors who successfully build scale and cater to local preferences.
4. Exploit the interactivity of the Internet to know your customers In general, European online retailers are
not leveraging the opportunity the Internet gives them to gather a wide range of information about
their customers shopping habits, interests and preferences all of which are key to long-term business success.
5. Combine online and offline opportunities Businesses that effectively integrate their online and offline
channels often provide the most value to customers. For example, customers expect to be able to
return items bought online at retailers shops. This clicks-and-mortar approach has yet to be fully
developed in Europe.
6. Explore opportunities for new revenue streams Online retailers in Europe are relatively weak in
exploiting high margin revenue streams such as advertising and referral fees. As more European
consumers migrate to the Internet, retailers must be ready to pursue these additional sources of
revenue.

PAGE 5

The European Online Market:

Hypergrowth and Diversity
The online retailing market in Western Europe is in a state of hypergrowth as incumbent retailers and
new start-ups venture online. In 1999, the market grew by 200% to reach 3.5 billion1. This volume
still represents a tiny 0.2% of all retail sales in Europe. In 2000, the European market is expected to
grow by 170% and reach more than 9 billion. Online retailing will continue to grow at an exceptional
rate over the next few years. Total European online retail revenue is expected to expand thirteen-fold
by 2002, reaching a volume of approximately 45 billion in 2002.

1999 Online Retail Transactions in Europe

() Millions
1800

1644(1)
Internet Transactions
Minitel Transactions

1200

1125
976

600

324

Spain/Portugal

Norway

Finland

Denmark

43

Belgium

48

Austria

57

Switzerland

66

Netherlands(2)

77

Italy

90

Sweden

119

France

171

UK

182

Source:
The Boston
Consulting
Group survey.

Germany

218

Notes:
(1) French Minitel
sales 1999 were
1320 million.
(2) BCG estimate
based
on data from
Blauw New Media
Consulting.

Growth rates 1999 (%) 200

280

215

170

145

210

110

210

420

185

200

160

220

The European online retail market is only a tenth the size of the US market, which in 1999 reached
36 billion and represented 1.2% of all retail sales.2 At its current rate of growth, online retailing in
Europe lags behind the US by 1.5 to 2 years. European growth rates will likely follow the US example
and decline as the market grows, although its strong position in mobile technologies and interactive
television will stimulate further expansion.

Included in the online market volume are European sales of European online retailers and imports from outside Europe. This figure would expand to
4.8 billion if Frances Minitel were included. For the purposes of this study, Minitel is excluded from all estimates, since it represents a channel with
significantly different characteristics from Internet-based online retailing.
(2)
For all comparisons with US online retailing, see The State of Online Retailing 2.0, July 1999, a Shop.org study conducted by The Boston Consulting Group.
(1)

PAGE 7

Market size estimates are based on a bottom-up methodology of summing up the revenues of all major online retailers. In addition
to detailed data from the 546 retailers who participated in the survey, The Boston Consulting Group collected all publicly accessible
revenue data on online retailers who were not part of the survey. Using this information on over 750 online retailers, BCG was able
to identify revenue data for 89% of the market size. The remaining share of the market was estimated for retailers who did not participate in the survey and disclosed no public data. This approach results in a significantly more accurate market size estimate than
top-down methodologies.

A DIVERSE COLLECTION OF LOCAL MARKETS

The online retail market in Europe is not a single, homogeneous market, but a collection of local markets at different points in their development. This is in stark contrast to the much more homogenous
online market in the United States. The sheer diversity within the European market has important
implications for local players wanting to expand beyond national borders, as well as for US online
retailers looking to enter the European market.
Europes online markets vary widely on almost all metrics:
Internet penetration, a pre-requisite for online retailing, ranges from a high of 54% in the Nordic
countries to a low of 16% in France and 18% in Spain.3
Sweden leads in online penetration as 0.7% of all retail sales take place online, the second highest
in the world. The penetration rates in France,4 Italy and Spain/Portugal are only 0.1% of the total
market.5
Growth rates vary significantly between the countries. In 1999, the slowest growing online markets
were in Switzerland at 110% and Italy at 145%. At the other end of the spectrum, online retailing
grew more than 400% in Belgium, followed by 280% in the UK.
As a result of the different penetration rates and growth rates, the time lag behind the US also varies.
For example, Sweden lags by little more than half a year while Italy and Spain/Portugal lag by almost
three years.
Typical Internet access costs vary by almost 100% amongst countries and are, on average, more than
twice those in the US.
Payment habits for online purchases diverge. In Germany and the Nordic countries, less than 20%
of the volume of online transactions is paid by credit card. The British, French and Italians are much
heavier users of credit cards; more than 90% of the volume of online transactions in the UK is paid
by credit card.

Strong Differences in Online Penetration Across Europe

Penetration Rate (%) 1999(1)

0.0

Note:
(1) Excluding automotive and collectibles/
auction categories.
(2) Given estimated US
penetration in 1999 at
1.2% and assuming
growth at present rate
for European countries.

Sweden
UK
Netherlands
Germany
Switzerland
Norway
Austria
Finland
Denmark
Belgium
France
Italy
Spain/Portugal

Source:
The Boston Consulting
Group survey;
The State of Online
Retailing 2.0, a
Shop.org survey conducted by The Boston
Consulting Group;
BCG analysis.

Europe

0.1

0.2

0.3

0.4

0.5

0.6

0.7
0.68

0.37
0.34
0.30
0.29
0.26
0.23
0.22
0.20
0.16
0.14
0.09
0.06
0.24

0.8

Growth Rates
1999 (%)

# Months
Behind
the US(2)

170
280
210
200
110
200
210
160
220
420
215
145
185
200

7
11
13
15
23
17
18
21
19
16
22
34
35
18

Internet penetration rates according to IDC, An IDC consumer survey: European Internet and eCommerce Ready for 2000? December 1999.
If Minitel sales are included, Frances online penetration is 1%.
(5)
Included in the volume for each country are the domestic sales of the local online retailers and imports from other countries into the respective country.
(3)
(4)

PAGE 8

Nevertheless, four distinct clusters are emerging,

reflecting similarities amongst groups of countries as
their online retail markets evolve.

Awakening giants: Despite lower levels of penetration,

Germany and the UK are the most important markets
by virtue of the size of their economies. Already, they
account for 60% of the online market and the majority
of market growth in absolute terms, having expanded
more than three-fold in the space of one year.

Early Adopter

Source:
The
Boston
Consulting
Group
survey and
analysis.

Sweden

0.7

Online Retail Penetration (%)

Early adopter: Sweden has developed a relatively

advanced online market. With an online retail penetration of 0.7%, second only to the US, it clearly stands
out from the rest of Europe. Its absolute market size, in
terms of both online and offline markets, is relatively
small.

Four Clusters of Countries

0.6

0.5

Small but
Connected

Awakening Giants

0.4

UK

Netherlands
0.3

0.2

Switzerland
Norway
Austria
Finland
Denmark Belgium

Germany

Middleweights
France
Italy
Spain/Portugal

0.1

0
0

50

100

150

200

250

300

350

Total Retail Market () Billions

(Online and Offline Markets Combined)

Middleweights: In France, Italy and Spain/Portugal, the

development of online retailing lags behind the rest of
Europe to some extent, as shown by their lower online
retail penetration rates. They will, however, become important markets as their penetration rates rise
and they migrate more of their sizeable retail markets online. While Frances population has been
shopping online through Minitel for almost two decades, it has yet to translate its high Minitel
penetration rates to the Internet-based retail market.

Small but connected: Belgium, the Netherlands, Switzerland, Austria, Norway, Finland and Denmark
claim a smaller position in the European online retail market as a result of moderate online retail
penetration rates and small market sizes.

France

Minitel: Ahead of the Curve?6

Even before the arrival of the Internet, France exploited its telecommunications infrastructure for online retail transactions.
Since its launch in the early 80s, Minitel has become a prominent feature of daily life, with one in three people in France
using it. Dedicated terminals, which are hooked up to the phone lines, offer a wide range of services such as telephone directories, games and shopping. The system is easy to use and provides immediate connections with no waiting to boot up.
Minitel is, however, fairly rudimentary as it provides information in text form with very simple graphics.
If sales via Minitel were included as part of total online retail sales, France would be the clear leader within Europe.
Currently, there are more than 400 e-commerce sites in operation on the system generating revenues of 1.3 billion
for retailers.
At first, Minitels strong position appeared to slow down the emergence of Internet-based e-commerce. Now, it appears that
the opposite may be true, as Minitel has prepared the local population for online shopping. Cannibalisation has already begun
to take place; in 1999 Minitel revenues declined by 6% and Internet-based revenues took off, growing 215%. As a result, the
development of the Internet will force Minitel to focus on activities where it brings most value: efficiently fulfilling simple needs
such as catalogue orders and basic information requests.

(6)

For the purposes of this study, Minitel is excluded from all estimates, since it represents a channel with significantly different characteristics than
Internet-based online retailing.
PAGE 9

Online Retailing is Fragmented on a Pan-European Level

Market Share 1999 (%) (1)

48

100

All remaining
retailers

Total online
market

100

Note:
(1) Excluding
the Netherlands.
75

Source:
The Boston
Consulting
Group survey.

13
50

13
26
25

Top 10 retailers

Top 11-25
retailers

Top 26-50
retailers

LOW ONLINE RETAILER CONCENTRATION ACROSS EUROPE

Only a online few retailers have succeeded in making an impact on a pan-European scale. The top ten
retailers in Europe account for only a quarter of the total online market whereas in the United States,
the top ten account for almost half of the market. European online retailers tend to have a domestic
focus; those very few retailers that do have a pan-European approach tend to be US-based. US players,
European incumbents and European pure-players alike, are racing fast to expand their online offerings for the largely undeveloped European market.

Low Retailer Concentration within Categories

Total Revenue 1999 (%) (1)

Top 3 players share of total revenue

100

Note:
(1) Excluding
the Netherlands.

79

78

77

75

74

74

71

62

54

54

Others
48

44

42

56

58

39

80

Source:
The Boston
Consulting
Group survey.

60

46

46

Computer
Hardware/Software

Collectibles/Auctions
(Person-to-Person)

52

61

40

PAGE 10

Books

Food/Wine

Event Tickets

Consumer Electronics

29

Automotive

26

Flowers/Cards/Gifts

26

Toys

25

Music/Video

23

Home/Garden

22

Financial Brokerage

21

Travel

20

Apparel

38

chello:
An Innovative Pan-European Approach

Netherlands

Since its launch in March 1999, the Netherlands chello broadband NV, a subsidiary of UPC, is a European ISP actively
pursuing a pan-European approach. Their internationalisation strategy builds on three major elements:
Broadband technology in order to deliver high-speed access, providing a much richer, always on Internet experience to
the consumer.
A low, flat all you can surf service fee (including all telecommunications charges), moving away from the traditional payper-minute models used by the majority of European ISPs. This model attracts heavy Internet users and encourages longer
stays online.
Aggregated online shopping sites at local, national and international levels as well as news, community services and entertainment all in local languages.
By December 1999, chello had attracted more than 100,000 subscribers from across Europe including the Netherlands,
Austria, Belgium, France, Norway and Sweden.

Even within product categories, retailer concentration is generally low across Europe, with the top
three players often accounting for 20-40% of category sales. On a country-by-country basis, however,
the concentration is much higher, with the three largest players by category typically generating
6070% of sales.
There are, however, some exceptions to this low concentration of retailers across the continent. The
book category is more concentrated as a result of Amazons emerging success in Europe. High concentrations in immature categories such as tickets, auctions and automotive are driven by a small number of early movers who have acted fast and captured significant market share in their home markets.
Similarly, there are currently few pan-European portals and aggregators to help direct traffic beyond
national borders. The vast majority of portals in Europe are focused on a local audience. Typically,
each of the five top portals in Europe (Yahoo, AOL, MSN/Hotmail, T-Online and Altavista) reaches a
range of 1020% of all European Internet users in one month. In the US, the equivalent portals reach
between 3080% of all Internet users. Indeed, European portals are almost completely absent from
the pan-European market four of the top five portals are US-based.

1999 Online Retail Transactions by Category

() Millions

1,200

Gross value of agency transactions

Retailer revenue (agency revenue)

980

Retailer revenue (direct sales)

Note:
(1) Includes
automotive referral fees only.

900

Source:
The Boston
Consulting
Group survey;
BCG estimate
based on data
from Blauw New
Media Consulting
(Netherlands
figures).

714

600

525
415

480

398
224

300

181

154

151

119
47

Apparel

Consumer
Electronics

Event Tickets

Home/
Garden

Flowers/
Cards/Gifts

Toys

Automotive(1)

19

Food/Wine

19

Music/Video

36

Collectibles/
Auctions

135

39

Financial
Brokerage

280

Books

Growth rates 1999 (%)

Computer
Hardware/
Software

Travel

155

135

950

205

350

260

175

280

275

200

330

450

PAGE 11

CATEGORY CHARACTERISTICS DIFFER GREATLY

Online retailing today is concentrated around a small number of categories. Together, travel, computer hardware/software, financial brokerage and books account for roughly three-quarters of the
online market. The remaining categories generate relatively lower sales levels either because they are
small retail categories (such as toys), or they are large categories which currently have low online penetration (such as groceries).
Within Europe, category dominance varies strongly among countries reinforcing the heterogeneity
of Europes online market. This category dominance is often driven more by aggressive players developing a domestic online market for their product or service than by structural differences between
countries, illustrating again the immaturity of the online market. Examples of these category differences include:
Online auctions are twice as popular in Germany than they are in the rest of Europe.
While computer hardware/software account for 20% of the European online market, this category
has captured only 10% of the French and German markets.
The greatest disparity is in financial brokerage, which accounts for 30% of online revenues in
France but only 3% in the United Kingdom.
Over all, the revenue split by category follows the US pattern. The four leading European categories
also feature among the top five in the US. There are, however, also categories that have acquired
either a greater or lesser significance in the European market than in the US. For example, tour operators and airlines have been proactive in developing the European travel market online. As a result,
travel represents 28% of the total online market, compared to 18% in the US. Online book retailing
has also benefited from its first mover status and has captured a relatively large share (12%) of the
European market. In the more mature North American online market, books account for just 5%.
Financial brokerage may have the highest penetration rate of all European categories, but it has yet
to reach the outstanding level of popularity seen in the US. It is hampered by a smaller base of private
investors, a weak equity investment culture and a lower level of consumer confidence in online financial transactions. Private online auctions such as eBay, which have found tremendous success in the
US market, also have yet to take off in Europe.

Online Penetration Shows Strong Differences Between Categories

Penetration Rate (%) 1999
Note:
(1) Assuming growth
at present rate for
European categories.
Source:
The Boston Consulting
Group survey;
The State of Online
Retailing 2.0, a
Shop.org survey conducted by The Boston
Consulting Group.

3.5

Computer Hardware/Software
1.6

Books
1.2

Music/Video
0.8

Travel
Consumer Electronics
Event Tickets

6
5.3

Financial Brokerage

0.3
0.2

Food/Wine

0.1

# Months
Behind
the US(1)

15.2

15

9.2

14

5.1

14

1.8

1.8

2.3

26

5.0

31

<0.1

N/A

Toys

0.1

0.5

11

Flowers/Cards/Gifts

0.1

N/A

N/A

Apparel

0.1

Home/Garden <0.1
Average

PAGE 12

US Penetration
Rate 1999 (%)

0.24

0.3

16

0.1

14

1.2

18

The underdevelopment of many product categories as shown by the dominance of four categories
indicates a tremendous opportunity for online retailers to move into unclaimed markets and establish
positions of strength. An examination of category growth rates shows that players are beginning to
pursue these opportunities, resulting in spectacular growth rates in some of the smaller online
categories such as collectibles/auctions (950%) and automotive (450%). These great differences in
growth rates will cause the category split to look quite different by the end of year 2000, with
collectibles/auctions, in particular, gaining share.
The online penetration rates for each category also vary widely. Financial brokerage is leading, capturing over 5% of the total market, while computer hardware/software follows with 3.5%. Both have
already achieved penetration rates that make the online business an important share of the entire category. Many other categories, however, have yet to register penetration rates above 0.1%.
Penetration rates will rise very quickly, especially in categories where products and services can be
delivered via the Web such as computer software, music, videos, books, newspapers and gambling.
Indeed, online fulfilment will pose a serious threat to those who rely on traditional retail models and
will create opportunities for those who own the content.
As mentioned earlier, an analysis of penetration and growth rates reveals that Europe lags behind the
US overall by 1.5 to 2 years, although on a category-by-category basis, the lag varies greatly. Categories
with a higher penetration rate do not necessarily have a shorter lag time, since category maturity in
Europe generally follows the US pattern. In some smaller categories such as toys and music/video,
where US online penetration is low, the lag time is shorter. Europe is even slightly ahead of the US in
the food/wine category. Online penetration of consumer electronics and event tickets, on the other
hand, is particularly far behind the US, lagging by 2 to 3 years.

Financial Services Online

Financial services products have proven to be particularly well suited to the online world since financial products are information-based and can be easily distributed via the Net.
Conducting financial transactions online appeals to customers who not only have the wherewithal to invest in Internet access,
but also appreciate the convenience of use, lower transaction fees and depth of knowledge available through Internet-based
financial services. For their part, financial service companies also appreciate the savings that come from lower processing costs,
but more importantly, the opportunity to build an entire new customer base in an industry that tends to be fairly static.
In Europe, online banking is relatively advanced, with higher penetration rates relative to other online services and products.
In 1999, 2% of customers of Europes leading banks did their banking online. 7 Online brokerage, which offers customers cost
savings and enhanced functionality, is one of the most successful financial products online with a penetration rate of more
than 5%. There are strong variances among countries. The online financial services sector in the Nordic countries surpasses
even the US market with 8% penetration. Merita bank in Finland and SEB in Sweden have more than 50% and 35%, respectively, of their customers online. Yet, penetration rates decline dramatically outside Scandinavia. In Germany, Deutsche Bank
and Hypovereins Bank have 5-7% of their customers online, while major financial institutions in the UK, France and Italy such
as the Halifax, Crdit Lyonnais and UniCredito interact with only 2% or less of their customers online.8
Banks have a great opportunity before them to become important players in the online world and to use the Internet to expand
regionally, if not globally, without the burden of building new branches. Several banks such as Lloyds TSB and the Bank of
Scotland, which have traditionally been more locally-oriented, are already launching pure Internet banks which operate at a
pan-European level.
As a result of its experience in telephone banking, the banking industry was one of the first to address the issues of managing both online and offline channels, and should be able to use this experience to manage the transition to the Internet. With
their ready-made customer lists, strong brands and a level of trust built up over years of managing the financial affairs of their
customers, banks could evolve into aggregators or infomediaries, functioning as financial, or even shopping, portals.

(7)(8)

The Boston Consulting Group analysis based on SalomonSmithBarney, October 1999.

PAGE 13

Crumbling Barriers to
Continued Online Growth
There are clearly still some significant structural and attitudinal barriers to further rapid development
of online retailing in Europe. These barriers, however, are beginning to crumble as all players
regulators, access providers, providers of enabling technology, venture capitalists, retailers and
consumers recognise the full potential of the Internet.

HIGH INTERNET ACCESS COSTS

Internet costs, like telephone costs, are currently more expensive for the average European consumer
than they are for the US consumer. Users in Europe spend almost 100% more for Internet access than
their American counterparts because they have to pay for local telephone calls. A heavy user of the
Internet in Austria or Germany could spend almost three times as much for access.

Internet Access Costs in Europe Higher Than in US

() per Month (1)

50

Telecommunications charges

44
33
40

Internet service provider cost

40
30

38
28

35

34

29

23

30

32
27

30
25
24

24

23

18

19

13

20

14
11
5

5
US

Spain/Portugal

France

Switzerland

Belgium

Germany

Austria

10

Italy

10

Nordic

10

Netherlands

11

UK

10

Note:
(1) Based on 20
hours of Internet
use per month.
Assuming 20
one-hour
telephone calls,
13 during the
week (3 in peak
hours, 10 in
non-peak hours)
and 7 during the
weekend.
Source:
The Boston
Consulting
Group analysis.

PAGE 15

Telecommunications companies and Internet service providers, however, are beginning to offer more
surfing-friendly packages. For example, free ISPs such as Freeserve in the UK have increased growth
in the online population dramatically. Yet these models do not address per-minute telephone charges.
More recently, companies such as the Dutch broadband ISP, chello, and the British cable operator,
Telewest, have begun to offer Internet access at a flat all-you-can-surf rate, which covers both ISP and
telecommunications charges.

LOW CONSUMER CONFIDENCE

Taken as a whole, consumers throughout Europe are less experienced with the concept of remote
shopping by TV or catalogue than their US counterparts. As a result, they are comparatively less confident that online shopping is safe and secure.
For many consumers, providing personal data to an invisible third party is an alien and unwelcome
concept. Hence, around half of European online consumers pay for their online orders by cash on
delivery or ask to be invoiced.9 Within Europe, only the UK is on par with the US, where credit cards
are used for 93% of online purchases.10 In France and Italy, 7075% of consumers pay for their online
purchases electronically by credit card. Germany and the Nordic countries are at the low end of the
spectrum; less than 20% of their consumers pay online via credit card.11 Obviously, finding acceptable
payment mechanisms remains a critical issue for online retailing in Europe.
There are, however, positive signs emerging. More secure payment standards like SET (Secure
Electronic Transaction) are being developed and tested. Banks and retailers are also starting to take
a more active role in encouraging consumers to use online payments.

AN UNEVEN PLAYING FIELD

The absence of e-commerce legislation and standards, at both the national and European levels, leaves
consumers uncertain of their rights when making Internet transactions. Consumers are wary of purchasing from a retailer outside their national jurisdiction without knowing what recourse they have if
a dispute ensues. Without a clear legislative and regulatory framework in place, international expansion becomes more difficult.
In addition, online retailers are ill-equipped to deal with local laws that are often based on postal regulations and are not tailored to the specific needs of e-commerce. Laws on privacy, the use of customer
data, pricing rules, taxes and payment regulations to name just a few vary greatly across Europe.
Although the introduction of the Euro will help eliminate some currency issues, these differences
often mean that installing and running a multinational e-commerce business can become an extremely complex operation, with high set-up and operation costs.
The situation is beginning to improve. In addition to taking action on a national level, the European
Union Council of Ministers concluded an agreement in December 1999 that addresses the issues of
applicability, transparency of commercial communication, liability of intermediaries, and requirements for contract conclusion.12 While the agreement increases consumer security and establishes a
legal context for European e-commerce, it does not remove all the inequities and restrictions.
Implementation of the agreement may also take some time. For the immediate future, Europe will
remain a heterogeneous market where every country has the right to enforce different rules and
restrictions as it chooses.

The Boston Consulting Group survey.

BizRate.com.
(11)
The Nordic countries are the only countries in Europe where other online payments methods besides credit cards, like electronic debit, have a significant share, accounting for another 9% of all payments for online purchases.
(12)
Electronic Commerce Directive harmonizes rules on certain legal aspects of electronic commerce in the internal market, DGXIV, COM(98) 586 Draft.
(9)

(10)

PAGE 16

LIMITED AVAILABILITY OF VENTURE CAPITAL

Venture capital plays a critical role in fuelling growth in the Internet economy. Historically, Europe
has lagged the US in creating an environment in which entrepreneurs can easily acquire early-stage
financing. For example, in 1998, venture capital investment per capita across Western Europe was only
60% that of the US.13 European venture capitalists also focus more on the later stages of financing than
in the US. The share of start-up capital in Europe as a percentage of total venture capital was, at 11%,
significantly smaller than the US figure of 29%.14
The supply of venture capital is ramping up quickly. European venture capital investments grew 50%
from 1997 to 1998, faster than the 23% growth seen in the US, and have continued to grow rapidly
since. Early-stage financing, in particular, is becoming more readily available and is the fastest growing venture capital segment in Europe, growing 130% from 1997 to 1998 and outpacing US growth of
41%. In addition, European technology stock exchanges such as Neuer Markt and EASDAQ are
gaining importance, providing venture capital firms with much needed liquidity.

INERTIA OF TRADITIONAL RETAILERS

Many traditional European retailers are wary of developing online offerings, fearing channel conflict
and cannibalisation of their existing bricks-and-mortar retail outlets. A typical strategic response has
been to wait and see how the market shakes out before making a move. Moreover, many incumbents
lack the skills and culture necessary to compete in this new economy. As a result, some retailers that
have ventured online offer only a restricted number of items, limited information and poor levels of
customer service.
This perspective represents another barrier to growth. The ability of the traditional retailers to take a
more proactive and aggressive approach to online retailing will be critical both in driving market
demand and capturing market share. As the online market takes off and competition begins to escalate, more and more incumbents are realising that they have no choice but to move fast to keep pace
with more agile competitors.

Once again, there are wide variances across Europe: Spain/Portugal and Italy are starving for capital, having per capita investment of only one-third
the European average, while the UK and the Netherlands enjoy investment per capita that is even higher than the US average. European Venture
Capital Association Yearbook 1999.
(14)
European Venture Capital Association Yearbook 1999, National Venture Capital Association Yearbook 1999.
(13)

PAGE 17

Strategic Implications:
Multichannel vs. Pure-Play Retailers
Multichannel retailers (those who operate both physical and virtual sales channels) and pure-play
retailers (those who operate only online) represent two different retailing generations and perspectives. Multichannels typically represent the incumbent retailers some of which operate bricks-andmortar shops and others which sell through mail order catalogues who are now venturing online.
Pure-play retailers, on the other hand, are new start-ups.
Currently, multichannel retailers in Europe hold two-thirds of the market, having already lost onethird of the online market to pure-plays.15 The pure-plays might very well be able to increase their market share even further; in 1999, they outperformed multichannel retailers with an average growth rate
that was 25 percentage points higher.
The relative strengths of multichannels and pure-plays vary amongst countries. A case in point is Italy,
where in the past, incumbents largely ignored the Internet. As a result, Italian incumbents lost more
than 60% of the online market. By contrast, pure-plays have made less of an impact in Switzerland,
capturing only a 16% share.

Market Share of Pure -Play and Multichannel Retailers by Country

Online Retailing Sales 1999 (%)

Pure-plays
100

61

40

38

35

Multichannels

30

28

27

70

72

73

24

84

60

62

Nordic

60

France

80

40

16

76

65

66% are
Multichannels
Across
Countries

Source:
The Boston
Consulting
Group survey;
BCG analysis
for the
Netherlands.

39

(15)

Switzerland

Spain/Portugal

Netherlands

Belgium

UK

Germany

Italy

20

Among multichannel retailers, mail order companies are disproportionately strong and account for, in some countries, almost half of all online sales
by multichannel retailers.
PAGE 19

The share split between multichannels and pure-plays varies even more significantly across categories.
In financial brokerage, travel and apparel, strong and determined traditional retailers have successfully leveraged their existing capabilities in moving online. In other categories, such as books,
music/video and auctions, pure-plays have been more successful in penetrating the market, due to low
entry barriers and a relative lack of activity from established players.
Tenure in the marketplace and existing brand awareness confer a temporary advantage on incumbent
retailers. They are, however, now at risk of losing out to new and nimble competitors who are moving
online and gaining significant market share.

Market Share of Pure -Play and Multichannel Retailers by Category

Online Retail Sales 1999 (%)

Pure-plays

Source:
The Boston
Consulting Group
survey, BCG
analysis for the
Netherlands.

100

99

65

65

62

46

33

27

23

22

80

73

77

Multichannels

17

15

15

83

85

85

11

11

89

89

78
66% are
Multichannels
Across
Categories

67
60

54

35

35

Books

Music/Video

40

38

20

Home/Garden

Food/Wine

Financial Brokerage

Apparel

Flowers/Cards/Gifts

Travel

Consumer Electronics

Computer
Hardware/Software

Event Tickets

Toys

Automotive

Collectibles/Auctions

1
0

The US experience has given European retailers fair warning that a battle for the online retail channel is brewing. In the early stages of the American online market, pure-plays were able to capture a
significant share. Multichannels, recognising this serious challenge to their hold on the total retail
market, began to use their core assets such as brand, distribution systems and warehouses to gain
advantage. Mail order companies, in particular, seem to be particularly well-positioned as their entire
organisations and processes are designed for shopping-at-a-distance. The challenge for European
incumbents is to take the lessons learned from the US and apply them to head off the pure-play threat.
To date, few have done so.

BUILDING BRAND ADVANTAGE

The differing strategic approaches between incumbents and start-ups can be observed on a number
of fronts. Recognised and trusted brands play an even more important role online than they do
offline. Multichannel retailers are in a strong position in this regard as they can use their established
brands to attract customers to their sites and create high levels of confidence. The challenge for pureplays is to create a similar level of awareness and loyalty by investing in marketing and advertising.
Pure-plays have the potential to position their new brands to generate strong consumer interest and
attachment. Boo.com, for example, is trying to create a brand with a hip Internet look and feel and
a tight demographic focus. Similarly, lastminute.com is creating a brand with a promise to provide the
best value for money, last minute solutions for leisure activities.

PAGE 20

European multichannel retailers are putting their

brand advantage at risk by spending a meagre 8% of
their online revenues on advertising. This is low, even
considering that multichannels can integrate their
online advertising at low marginal cost into their existing advertising campaigns. This figure contrasts with
the 47% of total revenues invested in advertising by
European pure-plays. Interestingly, even pure-play
retailers are investing significantly less than their US
counterparts (76%).

Pure -Plays Invest More in Marketing

Marketing Spending as Percentage of Revenue
50

47%
Source:
The Boston
Consulting
Group survey.

40

Distribution of
Advertising Spending
Offline
30

The brand advantage of multichannel retailers is confirmed by how customers arrive at online retailers
sites. On average, 61% of customers arrive at an online
multichannel retailers site by simply typing in the URL
address, while only 46% of customers get to pure-play
sites in the same way. The fact that this gap is not wider
is a warning to multichannel retailers that pure-plays
are building brand awareness very rapidly. European
multichannel and pure-play retailers need to be prepared to invest very aggressively to build brand awareness if they are going to succeed over the long-term.

Online

20

10

8%

Multichannels

Pure-plays

How Customers Access Online Retailer Sites

(%)

Source:
The Boston
Consulting Group
survey.

61% Direct Entry of Internet Address 46%

Multichannels

22%

Portals or Search Engines

27%

2%

Shopping Sites

3%

8%

Ad Links

14%

7%

Affiliates

10%

Pure-plays

STRATEGIC OUTSOURCING
Successful online retailers will be those who not only build a compelling brand and a user-friendly
Web site, but who ensure that the whole value chain functions smoothly. Online retailers need to provide a superior end-to-end customer experience from the ease of navigation to the timely delivery
of orders.
To provide a full range of services, online retailers may need to look to outside suppliers either to
deliver the functions they lack or even more importantly to gain speed and flexibility. How they do
this depends on whether the retailer is a pure-play or multichannel, since each exhibits different outsourcing behaviour. Pure-plays tend to outsource more of their back office functions, often to
decrease time to market. Multichannel retailers tend to leverage legacy assets such as warehouses and
back office functions, but often outsource Web development and maintenance capabilities.
PAGE 21

Pure -Plays and Multichannels Have Different Outsourcing Behaviour

80

Share of Companies
Outsourcing
Functions (%)

Multichannel
73

Pure-play

70
Source:
The Boston
Consulting
Group survey.

62
60
53

51
50

44
40

36
32

30
21
17

20

15

14

12
8

10

Development
and Maintenance

Analysis
of Traffic

Handling
Customer Orders

Web Site

Inventory

Payment
Processing

Delivery

Customer
Service

Back Office Functions

A CLICKS-AND-MORTAR APPROACH
Today, there is still a great divide between the offline and online worlds in Europe. Many multichannel retailers are reluctant to move to fully integrated multichannel management. Pure-plays, on the
other hand, often see their advantage as being unencumbered by a physical presence, a perception
that underestimates the importance of offline assets.
Increasingly, multichannel and pure-play retailers in the US are realising that both worlds can and do
add value for the customer. They are beginning to learn from one another and are migrating successful practices from one channel to the other. Retailers are increasingly operating in both worlds
and taking a clicks-and-mortar approach that combines the best of each channel.
While the online world offers flexibility, broad choice, customisation and convenience, the offline
world adds the human dimension, supports impulse shopping and provides the physical presence that
consumers also crave in a shopping experience. In North America, more than 70% of Internet users
who have not yet purchased online stated that one of the main reasons for not shopping online was
that they wanted to see, touch or feel the product before buying it.16
The Gap and Office Depot are good examples of traditional retailers leveraging offline operations to
support the development of online efforts. They both offer Web access from their retail outlets so that
customers who cannot find a product in-store can find it online. They also encourage customers to
return items bought online to their shops, saving the customer the expense and bother of posting
returns back to the warehouse. The idea is to create a seamless and stress-free shopping experience
for their customers, essentially letting them choose which channel they prefer to use to shop, return
an item or gather information.
Meanwhile, pure-plays are also recognising the value of a real world shop-front. This has recently
led to several pure-plays partnering with or acquiring traditional retailers to establish this physical
presence. UK-based travel retailer ebookers.com, for example, has acquired several traditional offline
retailers across Europe in order to expand faster and gain the advantages of an offline presence.
While the clicks-and-mortar approach combines the best of online and offline worlds, it is an
approach that favours traditional retailers with an established store presence and known brand.
European retailers need to capitalise on this advantage by creating an online channel that complements their offline operations. Some cannibalisation of their offline retail outlets will occur, but the
ultimate rewards of being in both worlds will outweigh any short-term losses.
(16)

PAGE 22

BCG Proprietary Consumer Database.

France

3 Suisses: Successfully Integrating

A Multichannel Strategy

3 Suisses is the second largest mail order company in France with a turnover of 1.2 billion that generates most its revenues
from its 1100-page catalogue which is published twice a year. The company has continually leveraged technology to find new
ways to interact with customers, first through telephone orders and then, in 1982, launching a site on Minitel, which today
generates 140 million in sales. The introduction of the Internet provided 3 Suisses with a new channel to exploit. It started
to sell via the Web in 1997 and today it is fully integrated with the companys IT systems. 3 Suisses has placed all 60,000
catalogue references online and updates the site regularly with information about stock availability. Such detailed information
and tracking also allows the company to accelerate fulfilment; 60% of orders are delivered within 24 hours.
In 1996, 3 Suisses started to develop a bricks-and-mortar network of 17 of its own boutiques and 3,000 affiliate shops. The
boutiques offer all services such as order pick-up (within 24 hours) at no extra cost, free returns, order taking and credit card
applications, while the affiliates focus solely on pick-ups and returns. As 3 Suisses focuses on selling at a distance, it has succeeded in combining new technologies and offline channels to develop the market and deepen customer relationships.

AGGREGATORS: A COMPELLING BUSINESS MODEL FOR CONSUMERS

The Internet is giving rise to many new business models. One which is proving very successful is the
aggregator model. In contrast to retailers selling their own products, aggregators gather products and
information from several sources and present this to the consumer as a one stop shop. Travelocity,
Schwab and Brandwise are US examples of this business model in travel, fund management and consumer durables respectively.
The aggregator business model is compelling to the consumer for a number of reasons. As a multisourcer of products, aggregators have the potential to offer a greater range of choices to the consumer. They can provide direct price and feature comparisons to help the consumer find the best deal
possible without the legwork associated with doing the same thing offline. They can also offer advice
and information in an unbiased way. Finally, aggregators can make use of personalisation, Internet
functionality and interactivity to create valued relationships with consumers.
Aggregators clearly pose a serious threat to traditional retailers and product suppliers since they are
positioned to capture the customer relationship. Banks, insurance companies and airlines, for example, need to confront the possibility that, as product suppliers become increasingly exchangeable,
consumers develop greater loyalty to aggregators at their expense. Additionally, the greater transparency of information can increase price pressure and limit opportunities for cross-selling.
Pure-play European start-ups such as Comparis and ebookers.com see the aggregator model as a powerful way to take market share from incumbents. Traditional European retailers and product suppliers have to develop new strategies to combat this threat. This may include better use of multiple distribution channels and a clear understanding of how consumers use each channel. For example,
national flag carrier airlines may find that some loyal customer segments will prefer to purchase tickets at the airline Web site, while more price-conscious segments might prefer to use an aggregator with
auction functionality. Multichannel retailers should also be open to the idea of creating or participating in aggregator businesses alongside their traditional competitors.

Switzerland

Comparis.ch: Consumer Empowerment

Through Market Transparency

Comparis.ch is an innovative Internet pure-play company that uses an aggregator business model to enable consumers to make
the best possible choice for their health insurance, telecommunications services and banking needs. With a focus on creating
transparency and comparability, the site calculates, for example, how much the consumer would save if he or she changed
health insurance provider. The site also describes and compares various product features. Once the consumer has completed
the selection process, a quote from, for example, an insurance agent can be instanteously requested. Other product comparisons are being developed, including a comparison engine for long-distance telephone calls which calculates the cheapest
provider based on calling patterns. This concept of open comparison sites has the potential to provide significant consumer
value, but should concern product suppliers who will face price erosion and whose relationship to the customer is threatened.

PAGE 23

PAGE 24

Competing with US Players

in a Borderless Market
By its very nature, online retailing will be more international than traditional retailing. It is much
more scaleable than its bricks-and-mortar counterpart. Geographic expansion is also much easier to
achieve online. An online store is not bound by a physical location and can serve a homogeneous
but geographically dispersed customer segment.
Online retailing makes it possible to establish a presence in almost any international market. As a
result, retailers need to anticipate foreign competition on their home turf and actively pursue international growth opportunities in order to take advantage of scale.
Currently, online retailing in Europe is narrowly focused on national markets. European-based online
retailers generate 93% of their sales from local in-country markets, with just 5% derived from other
European countries, and only 2% from outside Europe.

Imports from Outside Europe Make Up A Significant Share of European Online Market
Online Retailing Revenue 1999 (%)

20

100

100

Sales by European online retailers

Sales by non-European online retailers
Total

5
75
75

Note:
(1) Sales within
the Nordic
countries are
considered
domestic sales.
Source:
The Boston
Consulting
Group survey
and analysis.

50

25

Domestic Sales(1)

Intra-European Sales

Imports from
Outside Europe

Total Sales
in Europe

PAGE 25

Online retailers will not be able to sustain this domestic focus as the growth potential within each local
market is relatively limited. They cannot even expect to maintain their hold on local markets as international players attack with more scaleable and tested business models.
While European retailers have remained largely content to compete within their own markets, US
online retailers are moving in and have already captured 20% market share across Europe.
Approximately half of these sales come from local European sites of US retailers, such as
Amazon.co.uk or Dell.de; the other half come directly from US sites. Imports into Europe are four
times greater than intra-European trade and ten times greater than exports out of Europe.
The online markets of Germany, Switzerland and the Nordic region have relatively strong domestic
players, resulting in low import levels of 10-18%. Players in other markets are at risk as foreign online
retailers are generating a significant share of online retail revenue. Foreign retailers currently account
for 40-45% of online sales in the UK, the Netherlands, Belgium and Italy and over 60% in
Spain/Portugal.
The battle lines are being drawn. The year 2000 will be a critical year in determing which retailers will
succeed. Many strong US players are currently moving aggressively into the European market with
localised offerings. At the same time, several European start-ups are beginning to create brand awareness. In the travel category, for instance, how will the US players such as Travelocity and Priceline fare
against UK-based ebookers.com and lastminute.com? Both pure-plays and multichannel retailers need
to move very quickly to develop pan-European offerings as international players build their European
presence.

COMPETING WITH INTERNATIONAL ATTACKERS

US retailers have the advantage of having tested their online strategies under intense competition in
a more developed market. However, the one size fits all approach of the US market needs to be
adapted for the European market, which is a collection of smaller, diverse and fragmented markets.
European players have the home advantage of being more familiar with the diversity of local consumer
profiles, preferences, cultures and languages.
For retailers to be successful in Europe, they must offer localised approaches that address country-bycountry differences on several dimensions, including:
Internet familiarity and acceptance
Product and service needs and expectations
Stages in the market lifecycle
Preferences in payment systems
Any pan-European strategy will inevitably be more complex than the single, relatively homogenous
approach that is possible in the American market. Retailers need to consider what parts of their offering are scaleable globally (e.g. brand building), what parts are scaleable on a pan-European basis (e.g.
fulfilment infrastructure) and what parts need to be tailored to each country (e.g. Web sites with local
look and feel). The rewards will be enormous for the small number of retailers, either European or
US, who devise strategies to address these issues and then operationalise them quickly and effectively.

Sweden

dressmart.com: Pursuing an International

Strategy from the Outset

Swedish pure-play online retailer dressmart.com, which focuses on selling apparel to businessmen who have little time to spare,
has pursued an international strategy from the beginning. Due to its focus on this small customer segment, dressmart.com has
realised that it has greater growth potential and can enjoy scale advantages by targeting the international market.
Launched in April 1999, dressmart.com already has operations in Sweden, Norway, Denmark, Finland, the Netherlands and
the UK, with further expansion planned. In the first year, the company expects half of its sales to come from exports, with an
increasing share coming from outside the Nordic countries. Armed with this aggressive international strategy, dressmart.com
has become one of the fastest growing online retailers in the Nordic region.

PAGE 26

STRATEGIES FOR INTERNATIONALISATION

Not all online retail categories will experience online internationalisation the same way. The ability to
internationalise business models will depend critically on the type of product on offer (local versus
global) and the fulfilment intensity required (high versus low).
Type of product For some products, customer preferences are highly localised and differ significantly from
country to country. Food, event tickets and books, for
instance, tend to be highly country-specific. Other
products, such as international music, apparel with
global brands, and computer hardware have broad
appeal across countries. The more global the product,
the greater the ability to scale the business model at an
international or global level.

Global

Four Internationalisation
Plays Evolving

Building
Local Networks

Source:
The Boston
Consulting
Group
analysis

Global Game

Local

Product

Fulfilment intensity Product categories differ in the

degree to which they require physical handling both
during and after the sales process. For example, consumers may need to touch and feel certain products
Localization
Local Game
before purchasing. There may be high distribution
of Global Concept
costs relative to the product value or required supplementary services, such as after-sales service and maintenance. Examples of products with high fulfilment
High
Low
intensity are fresh food (time critical, expensive delivFulfillment Intensity
ery), shoes (most consumers want to try them on
before buying) or cars (test driving, service and maintenance). For products with high fulfilment intensity,
scale at the local level and use of offline assets, organisation and processes is critical. Examples of
products with extremely low fulfilment intensity include products that can be distributed electronically over the Internet, such as computer software or music in the MP3 format. Businesses selling low
fulfilment intensity products can be more readily scaled up at an international or global level.
As a result, four different internationalisation plays are likely to develop:
Global game: Examples of the global product/low fulfilment intensity combination include
computer software and international music retailers particularly those that distribute their
merchandise directly over the Internet. These categories are likely to be highly internationalised and
global players will have a strong strategic advantage over local players. Companies positioned in these
categories should move fast on international strategies and expansion opportunities or risk losing
their local market share to international competitors who are pursuing more aggressive growth
strategies.

Sweden

Buyonet: Offering Digitised Products Globally

Buyonet.com is a software retailer that successfully leverages the combination of global reach and low cost of distribution via
the Internet. Its customers can select a wide range of software products, pay and immediately download the software onto
their computers. The company has adapted this offering for local markets, with sites and products available in numerous
languages and payment accepted in 22 currencies. As a result, Buyonet currently boasts customers in 130 countries and
generates more than 50% of its revenues outside Europe. This pursuit of an aggressive international strategy from the outset
has paid off and positioned the company to become a leader in software sales online.

PAGE 27

Building local networks: Luxury cars are an example of a global product with a high fulfilment intensity. Prospective car buyers generally prefer to test drive a car before they buy it, and cars require
ongoing after-sales service and maintenance. Business models for these product categories are likely
to benefit from international scale, but success depends more on local factors than is the case with low
fulfilment intensity products. Global players have to develop strong local networks, for example
through alliances with local partners, to meet customers expectations for service.

Global

Fleurop-Interflora:
Building Local Networks Worldwide

Fleurop-Interflora is the worlds largest and best-known flower ordering service. It processes some 30 million orders each year,
and is increasing its share of the online channel. Although there are variations in local preferences, flowers represent a
global product category which has benefited tremendously from the Internets ability to provide rich information with a
global reach.
Given the fragile nature of the product, this online presence must be complemented by an excellent local support and fulfilment capability. Customers often want to discuss flower types and colours, messages and delivery specifications with customer
service representative. And, the distribution of fresh flowers is time-critical and represents a significant share of the total cost
of flower greetings. Fleurop-Interflora has been extremely successful in meeting these needs by combining its online channel
with its local partner network of more than 56,000 flower shops in 140 countries.
The coming of age of the Internet has also had a remarkable effect on its service, enabling Fleurop-Interflora to change its slogan from flowers around the world to flowers within hours worldwide.

Localising of a global concept: Books are an example of the local product/low fulfilment intensity
category of products. Physical fulfilment is straightforward, usually via parcel post. Yet books are predominantly localised products, a reflection of local culture and language. Roughly 80% of books sold
are published in the local language, and while there are internationally popular titles, product
demand differs greatly across countries. A competitive business model would be one which is multilocal, leveraging an international brand, direct marketing and system know-how, while replicating a
similar formula in each country with the necessary local adaptation for product mix, consumer behaviour and fulfilment requirements.

US

Amazon.com: A Global Concept

with Compelling Local Adaptations

Amazon.com, the US online retailing giant, has taken the first, critical steps toward extending its reach beyond North America.
In April 1998, Amazon.com acquired online bookstores in both the UK and Germany, creating Amazon.co.uk and Amazon.de.
Internationalisation is a challenge for Amazon since book buyers in any region want to buy books by local authors in their own
language. Amazons strategy of utilising its existing capabilities in technology, marketing, and customer knowledge while
adapting the product and service concept to local market conditions has proven extremely successful. In 1999, international
sales, mostly from Europe, are expected to account for a quarter of Amazons total revenues. This makes Amazon one of the
largest online retailers in Europe.

Local game: Products such as grocery items, which require strong local fulfilment capabilities and for
which customers have many local preferences, are well-suited for a narrowly focused online strategy.
In these kinds of plays, the advantages of an international presence in this category can be limited.
Online businesses capable of fulfilling local needs have the advantage and are well positioned to take
on international competitors.

PAGE 28

Sweden

Matomera: Playing a Local

Game to Achieve Flawless Fulfilment

Matomera, a subsidiary of Bergendahl Group, is a leading online grocery retailer operating in southern Sweden with a strong
focus on local capabilities. Together with an external logistics partner, Matomera has developed a high quality fulfilment concept with 100% of its orders arriving on time and 98% according to specifications. The grocer also offers its customers sameday delivery for orders placed before 11 a.m. and free delivery for orders above 60.
Realising that they are dealing with delivery-critical products that are targeted to local preferences, Matomera focuses on customers living within a 20 km radius of its distribution centre. By doing so, Matomera has been able to achieve cost-efficient
fulfilment operations, which are essential for the low-margin and distribution-intense online grocery retailing business.

While European online retailers still have limited experience and know-how in this area, they have to
adapt their existing business models to the realities of the online market. In effect, the majority will
need to scale up their operations. US competitors, on the other hand, will be able to leverage their
brands and learnings from the US market, but will need to adapt their business models to the
heterogeneous markets in Europe.

UK

ebookers.com: A Clicks-and-Mortar Strategy

for Pan-European Leadership

ebookers.com aims to become Europes leading online low-fare flight specialist, building a pan-European capability through
aggressive acquisition of existing local companies. In the absence of an established pan-European travel brand, ebookers.com
believes it has a unique opportunity to become one by spreading brand recognition from localised hubs.
The strategy has three overlapping drivers: speed, local presence, and scale for bargaining power with airlines. Acquiring existing operations enables ebookers.com to build its brand quickly. It also brings them information about the local customer base
that is critical to creating a positive and complete customer experience in each country.
By creating both a bricks-and-mortar network across Europe as well as a multilingual online presence, ebookers.com leverages
its customer knowledge and relationships. As ebookers.com depends on selling airfares at cheap rates negotiated from airlines,
it needs strong airline relationships and, more importantly, buying power. Local acquisitions let ebookers.com benefit from
existing local relationships with airlines and, more importantly, a stronger, ultimately pan-European, negotiating position.
Better purchasing terms will be reflected in lower fares which, in turn, will attract more customers. The business model is a
good example of how to get the advantages of scale without sacrificing local touch.

PAGE 29

Lessons for European

Online Retailers
The European online retailing market is still in its early stages of development and wide open to players with a compelling online concept that delivers real value to consumers. While there is no single
formula for successful online retailing, some common learning can be found across different categories and business models. Six key lessons for European online retailers have emerged as a result of
this research:

1. ACHIEVE EARLY ADVANTAGE AND CONTINUE TO MOVE FAST

The often-cited early mover advantage on the Internet still holds true. There is a unique window of
opportunity for online retailers as the European market moves through this phase of hypergrowth.
This window is, however, closing fast, as entry costs increase at a dramatic speed.
Gaining early mover advantage is important; maintaining fast or continuous mover advantage is
equally so. Internet speed is also about the speed of growth. Companies have to implement ambitious
growth plans in order to build market share and fulfil investor expectations.

Italy

Fineco Online: Launching a Fast Mover Strategy

to Become a Leading Online Trader

Fineco Online is the leading Italian online trader. As the brokerage subsidiary of the Italian banking group Gruppo BIPOP, the
company started its online activity in the first half of 1999, entering a young market which had a clear leader.
From the very beginning, Fineco Online saw the importance of fast market entry. The initial strategy was to price low,
supported by a massive marketing and advertising effort. The company set a very ambitious target in terms of the number of
customers (10,000 by year end), and has invested heavily in customer acquisition. Consequently, in the space of a few
months, it has succeeded in building a very strong online brand name.
Finenco Online also understood that to move out ahead was not enough, it had to stay out ahead. And so it began a process
of continuous product and service development. After building a customer base, the company has started to broaden its
approach, shifting from a pure low price strategy to one which also offers a wide product range. Fineco closed 1999 as a
market leader both in terms of revenues and customer base.

2. GET FULFILMENT AND CUSTOMER SERVICE RIGHT

European online retailers are still struggling to get fulfilment rates up to acceptable levels. Some players report rates of incomplete fulfilled orders of as high as 50%. Based on data from Germany and the
Nordic countries, fulfilment rates are on average only about 88%.17 This is unacceptable; European
online retailers must improve in order to survive.
Fulfilment is a critical part of the purchasing experience and one that is vital for building customer
loyalty. Basic, customer-friendly processes, such as order taking, delivery and complaint handling,
make or break the viability of an online offering. Even if ordering online is a smooth and easy process,
customer loyalty can quickly be destroyed if the product is delivered too late or never arrives, or if the
customer is overcharged. North American consumers who have purchased online rate fulfilment as
one of the least satisfying parts of the experience. The majority of those who have not yet purchased
online say that fulfilment concerns are one of their key reasons for not purchasing online.18 Both new
and traditional players moving online need to focus on building reliable fulfilment systems.
Fulfilment rates were calculated for product categories requiring distribution of physical products by the online retailer itself. Therefore, the
product categories of financial brokerage (no physical product), private auctions (distribution organised by the customers themselves) and automotive (referrals only) were excluded from the analysis.
(18)
BCG Proprietary Consumer Database.
(17)

PAGE 30

These capabilities, once established, can become powerful sources of competitive advantage. Since
they involve complex and time-sensitive internal processes, rapid fulfilment and superior customer
service are difficult for competitors to imitate. Customers value these capabilities, making them key
sources of customer satisfaction and loyalty.

UK

Tesco: Building on Existing Strengths

to Create Reliable Fulfilment

The food retailing category faces perhaps the greatest fulfilment challenge as fresh product delivery is time-critical and produce is easily damaged. Tesco, a leading British supermarket chain, has focused on finding an effective nationwide solution to
the challenge, and has managed to do so within its existing business.
Launched in early 1999, Tesco Direct began as an 11-store pilot within the London area, but as of January 2000, has been
was rolled out nationwide to 100 outlets attracting 250,000 customers. By the end of this year, the service will operate from
300 stores. The key element of Tesco Directs success is a fulfilment system that leverages the retailers bricks-and-mortar
infrastructure. The offline retail chain provides an efficient distribution system with both national reach and a strong local presence. Fulfilment is integrated seamlessly into existing procurement, stocking and delivery processes which remain virtually
unaffected by the online activities. Existing logistics systems and local presence reduce the potential for damages or delays in
the delivery process and underpin the customer proposition by offering fresh products, convenience and low costs.
Based on revenue projections for its 1999 fiscal year, Tesco is expected to be the largest online grocery retailer in the world.

3. SCALE YOUR BUSINESS TO INTERNATIONAL LEVELS

European online players must exploit international growth opportunities. If they continue to focus as
strongly on their home markets as they do today, they will be forced to respond to the threat of
foreign players whose international presence confers a strong competitive advantage. When doing so,
they need to identify which of four different internationalisation plays is most applicable to the
market in which they are competing.
At the same time, retailers must recognise the importance of local adaptation. This is more than
language translation. It includes product mix, customer service, information, payment and fulfilment
choices, and the functionality of the site.

France

Fromages.com: Marketing a Local

Speciality Worldwide

Fromages.com is building on the worldwide reputation of French cheese to extend its reach beyond Frances borders.
Fromages.com has become the leading online specialist in French cheese. The site offers a limited selection of expensive, high
quality cheeses to connoisseurs around the world. Since the local online potential for such products is limited, Fromages.coms
sales are largely internationally-based, with more than 65% coming from the US and just 5% from domestic sales.
Their international success is underpinned by several elements: an efficient logistics system provided by a worldwide overnight
delivery partner which ensures that 80% of orders are delivered within 24 hours, and a strong focus on creating loyalty across
a geographically disparate customer group (50% of sales are repurchases).
It also plans to create an ambassador programme which provides incentives to customers who introduce their friends to the
service. Additionally, close co-operation with local authorities (like the US Food and Drug Administration) ensures easier
exportation of their products abroad.

PAGE 31

Conrad: Recognising the Importance

of Local Adaptation

Germany

The consumer electronics and computer specialist Conrad has built scale through both its online and offline presence in a number of European countries. In its mail order business, Conrad established independent foreign companies to respond to the differing demands of the various markets. It also learned that country-specific design is especially important to build a sense of
familiarity with its customers.
It has applied this principle of local adaptation to its online operations. In every country, a native person is responsible for the
individual adaptation of the online range to the specific local conditions, standards, and customer needs. Web pages have
different content in different countries, although its external designs all reflect the Conrad corporate identity.
Conrad has already entered Switzerland, Austria, France and Poland successfully. By using common brand and company image
and adjusting to local needs, it has successfully scaled its operations to an international level.

4. EXPLOIT THE INTERACTIVITY OF THE INTERNET TO KNOW YOUR CUSTOMERS

European online retailers have very limited knowledge about their customers. More than half do not
know how many unique visitors they have per year and only one-third are aware of the number of
repeat buyers. The Internet offers the potential for much data analysis and a very rich interaction with
the customer. For example, analysis of site usage and navigation is important in designing upgrades,
while e-mail and permission-based marketing increase the number and quality of contacts with the
customer.

European Online Retailers Lack Customer Insight

Percentage of Companies

Track
Note:
Based on company
data from France,
Germany, the
Nordic countries
and
the UK.
Source:
The Boston
Consulting
Group survey.

100

22

25

34

37

Do not track

50

51

53

50

49

47

56

59

80

78

75
66

60

63

40

44

41

Number of
repeat buyers

Buyer conversion rate

Number of individual
customers

Customer
age profile

Length per visit

Customers
by gender

How customers get

to home page

Number of
visitors

Visitors per
time of day

20

Detailed knowledge of customers behaviour is vital in understanding how to create more value for
them. It offers the potential to increase customer loyalty through personalisation and by providing
services which create sticky relationships. This in turn can drive growth and improve the bottom line
by driving down customer acquisition costs and increasing repeat purchases, look-to-book ratios, margins and cross-selling opportunities.
Online retailers in the US realise that after they have drawn traffic to their sites, they must focus on
building stronger customer relationships. Todays European online retailers are generally not leveraging this opportunity. To achieve long-term economic success, European online retailers must place
greater emphasis than they currently do on gaining an in-depth understanding of their customers and
improving their ability to capture and use that knowledge.
PAGE 32

Germany

Direkt Anlage Bank:

Focusing on Customer Service

As one of the pioneers in German Internet banking, the Direkt Anlage Bank also wants to lead the way in setting new
standards for customer service. By concentrating on various customer segments such as heavy traders and active investors,
it aims to deepen its customer understanding in order to develop new products and services.
The bank operates a virtual community where customers and non-customers alike can register and log on. Currently, the community covers three areas information, research, and trading all of which include various services for different consumer
needs. Some of the recent additions include an Internet-based, interactive adviser for active investors, and a market
indicator with information about the current investment climate. This virtual community enables the bank to monitor the
customers activities, which is essential for successful one-to-one marketing.
Direkt Anlage Bank has been extremely successful in its customer-focused strategy. The bank has a rapidly growing online
customer base, with an increasing share of their transactions being executed online. Over the course of 1999, online securities transactions more than doubled and now represent over half of its total securities transactions.

5. COMBINE ONLINE AND OFFLINE OPPORTUNITIES

The online and offline channels are compatible, not mutually exclusive ways of reaching the consumer. Pure-play retailers sometimes become too focused on technology and fail to recognise that the
Internet is not the best medium for all activities shopping included. Multichannel retailers often
make the mistake of isolating one channel from the other because they fear channel conflicts and cannibalisation.
Businesses that integrate online and offline sales are often the most effective retailers and the ones
that add the most value for the customer. The degree and type of online-offline combination differs
by product category and offering, depending on the importance of impulse shopping, need for physical handling and importance of the human interface in the customer interaction process.
In the US, online retailers like 1-800-FLOWERS built a walk-in presence to win new online customers
through the offline market. Gateway, the successful US direct sales retailer of computers, has invested
in showrooms to complement its Internet ordering system. Similarly, Aquarelle, a multichannel flower
retailer from France, is developing an integrated clicks-and-mortar approach by turning its existing
traditional offline stores in Paris into showrooms. While already close to half of the companys sales
originate from its online channel, the company recognises that its offline presence still plays
a very important role in building an exclusive brand and allowing customers to examine its
products.
Physical store outlets are also important when it comes to returns of goods ordered online. The
importance of customer support services, such as returns, is often underestimated. Customers often
prefer to deal directly in real time and in a physical store when it comes to transactions that they
believe require a higher level of trust and personal attention. In the US, more than 50% of Internet
users who have not yet purchased online cite potential problems in returning items as a reason for not
shopping online.19

(19)

BCG Proprietary Consumer Database.

PAGE 33

6. EXPLORE OPPORTUNITIES FOR NEW REVENUE STREAMS

Supplementary revenues such as advertising, referral fees or customer membership fees offer substantial future revenue opportunities and very high margins.
Building supplemental revenues through membership fees, direct marketing and advertising can be
very attractive for the long-term profitability of online retailers, since these revenues have typically
very high margins of up to 70-80%. In Europe, online retailers are not tapping into these additional
revenue streams, which currently account for less than 1% of revenue. Given the historically low traffic numbers, it would have been difficult for online retailers in the region to generate additional revenues in the past. But as more consumers migrate to the Internet, this is changing quickly, and retailers must be ready to pursue these additional sources of revenue.
Businesses that use the Internet purely for selling goods and services are missing out on valuable
opportunities. American online retailers generate, on average, 5% of their revenue through supplementary revenues like advertising and customer referrals.

Germany

Travel Channel: Actively Developing

Supplementary Revenues

Part of Gruner + Jahrs Electronic Media Services, Travel Channel is a pure-play online travel agency in Germany. In addition
to selling travel tickets online, Travel Channel is exploring opportunities for additional revenue streams and has recently entered
into exclusive sponsorship contracts with specialists in individual travel sectors.
One such partnership contract with Sixt gives the car rental agency a prominent placing on the Travel Channel car rental page.
Customers who want one-stop shopping for all their travel needs are encouraged to reserve their rental cars at Sixt. At the
same time, the customer remains in the Travel Channel site, even though he or she is using Sixts booking functions.
This co-operation benefits all parties: for customers through an easier shopping process, for Travel Channel through additional revenue in the form of sales commissions, and for Sixt car rental through increased sales. Travel Channel has been very successful in generating traffic and registered users, and has aggressive revenue growth aspirations.

PAGE 34

Methodology
This study of online retailing conducted by The Boston Consulting Group (BCG) had two main objectives:
To estimate the current size and growth of the business-to-consumer e-commerce industry in
Western Europe20 and to identify strategic key lessons for online retailers.
To develop a set of performance benchmarks on a European level that could be used by retailers to
track and improve performance for business planning, and to compare their performance with that
of their competitors.
Performance benchmarks were calculated from the data collected through the survey. In estimating
the size and growth of the online retail industry for 1999, the BCG survey was a primary but not
the only source of revenue information. BCG also relied on public sources, interviews, company
reports and other online revenue proxies. To calculate online penetration, BCG estimated the offline
retail volume per category through information from retail trade associations and other public
sources.
The following section details the methodology used to estimate the size and growth of the online retail
industry.
For all countries except Belgium and the Netherlands, the market size estimate was based on a bottom-up methodology defined by adding retailers online revenue, including transactional, agency,
offline referral fees, affiliate fees, marketing and advertising, and customer membership revenues.
Estimates for gross transactional value of agency revenues were also calculated and included in the
overall market size. Data was collected for half year 1999 and estimates made for full year 1999.
The online market size in Belgium was based on a consumer panel of 5000 Internet buyers as well as
interviews with the major players in each category. The Dutch market estimate was based on market
estimates from Blauw New Media Consulting and were recalculated to estimate full year figures.
BCG obtained actual revenue data for 2.1 billion or 60% of the overall industry size estimate of 3.5
billion. A further 1.0 billion or 29% of the overall industry was obtained through estimates based on
publicly reported data on market share, traffic, number of orders and the like. The remaining 0.4
billion was estimated on the basis of the average size of the remaining retailers.
Scope and Categories of the Business-to-Consumer Market
Retailers in the business-to-consumer industry sizing included all online retailers with European
domain names, European retailers with dot-com domain names, and non-European online retailers
with sales in Europe.
Retailers were grouped into fourteen primary categories. The size estimate excludes revenues of
online malls, other aggregators, portals and shopping comparison sites, so as not to double count
primary retailer revenues.
Defining Revenue Streams
When referring to revenue, BCG included transactional revenues, broker/agency revenues, offline
referral fees, advertising/marketing revenues, and customer membership fees. Financial brokerage
revenues included commission, but not the gross transactional value of the shares traded. The gross
transactional value of agency sales for collectibles, event tickets and travel was included in the overall
number.
For companies with multichannel operations, only the revenues attributed to their online operations
were included. Similarly, for sites and companies that sell both to businesses and consumers, only the
revenues attributed to consumer transactions were included. In a few cases, the revenue split between
small and home-based businesses and consumer transactions had to be estimated.
(20)

Countries included in this study are Germany, the United Kingdom, France, the Netherlands, Belgium, Italy, Spain, Portugal, Switzerland, Austria,
Sweden, Denmark, Norway and Finland.
PAGE 35

Estimating Industry Size

BCG used a five-step bottom-up methodology to estimate market size:
1. BCG compiled a list of companies by category and tiered those companies based on size. The list
was verified with category experts.
2. The next step involved capturing all actual total online revenues available through surveys, interviews, official filings and other third party sources.
3. BCG then estimated online revenues for other companies where proxies could be appropriately
applied (e.g. site traffic, relative online market share).
4. Total online revenues for the remaining smaller retailers were estimated by extrapolation when data
sources were exhausted.
5. The final step involved categorising the revenue streams of online retailers whether they were
transactional, broker/agency, or from offline referral, advertising/marketing, or customer memberships.
Estimating Growth Rates
Growth rates for 1999 were calculated by comparing revenues for first half 1999 with those estimated
for the full year and by comparing 1998 revenues with estimated 1999 figures. Seasonal adjustments
were made to separate online industry growth from seasonal growth. The aggregate growth rate was
derived by a weighted average of the seasonally adjusted components. Estimation of the growth rate
for year 2000 was based on interviews and experience from the market development in the US.
Survey Participation
546 major European online retailers participated in the detailed survey. For the market sizing, available information on more than 200 additional online retailers was used.
Retail Category Definitions
For the category split, the study took a product category perspective, not a business model perspective. Hence, for example, the revenue of department stores (or multi-category retailers) has been
divided into the different product categories. The product category gambling - which is covered in
some of the local, country specific reports is not included in this study since online gambling exists
only in a very limited number of European countries. The product categories covered in this study are
as follows:
Primary Category

Apparel/Sporting Goods
Automotive
Books
Collectibles (person-to-person auctions)
Computer Hardware/Software
Consumer Electronics
Event Tickets
Financial Brokerage

Flowers/Cards/Gifts
Food/Wine
Home/Garden

Music/Video
Toys
Travel

PAGE 36

Sub-Categories

Apparel Shoes Accessories

Sporting Goods Health and Beauty
Computer Hardware Computer Software
Stock Brokerage
Mortgage/Loan Brokerage (excludes Net banks
and online operations of traditional banks)
Insurance Brokerage
Grocery Wine
Furniture
Home Furnishings
Garden Supplies
Music Video DVD
Plane and Train Tickets
Hotel Reservation
Car Rental
Packaged Tour Tickets

For more information about this report, please contact your nearest BCG office
below or e-mail us at europe.e-commerce@bcg.com
A series of country-specific reports have also been prepared, examining the
development of e-commerce within each national market. These can be
obtained by contacting the local BCG office:

Austria

France

Spain

Am Hof 8

4 rue dAguesseau

Calle Alcal, 95

A-1010 Vienna

75008 Paris

28009 Madrid

Phone: 43-1-537-56-80

Phone: 33-1-40-17-10-10

Phone: 34-91-520-61-00

Fax: 43-1-537-56-8110

Fax: 33-1-40-17-10-15

Fax: 34-91-520-62-22

E-mail: bcg.paris@bcg.com

Belgium

Sweden

Boulevard de lImpratrice, 13

Germany

Hamngatan 2

Keizerinlaan, 13

Sendlinger Str. 7

S-111 47 Stockholm

1000 Brussels

80331 Munich

Phone: 46-8-614-5500

Phone: 32-2-289-02-02

Phone: 49-89-2317-4244

Fax: 46-8-611-5241

Fax: 32-2-289-03-03

Fax: 49-89-2317-4109

Denmark

The Netherlands

Zollikerstrasse 226

Amaliegade 15

J. F. Kennedylaan 100

CH-8008 Zrich

1256 Copenhagen K

3741 EH Baarn

Phone: 41-1-388-86-66

Phone: 45-77-32-34-00

Phone: 31-35-548-6800

Fax: 41-1-388-86-86

Fax: 45-77-32-34-99

Fax: 31-35-548-6801

Italy

Norway

Devonshire House

Via della Moscova 18

Karl Johans gate 45

Mayfair Place

20121 Milan

0162 Oslo

London W1X 5FH

Phone: 39-0-2-65-59-91

Phone: 47-23-10-20-00

England

Fax: 39-0-2-65-59-96-55

Fax: 47-23-10-20-99

Phone: 44-20-7753-5353

Finland

Portugal

Keskuskatu 1 A,

Av. da Liberdade, 110-7 a

4th Floor

1269-044 Lisbon

00100 Helsinki

Phone: 351-21-321-4800

Phone: 358-9-228-661

Fax: 351-21-321-4801

Switzerland

United Kingdom

Fax: 44-20-7753-5750

Fax: 358-9-228-66-911

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