Amazon dominates in Europe

European online booksellers risk being squeezed out of the market by US giant Amazon.com, which generates sales several times that of its nearest rivals.

According to a report from researcher IDC, Amazon's European rivals have suffered from the tight regulation of book sales in their local markets. While local retailers cannot discount books in some European countries, Amazon has been able to do so from elsewhere.

However, European booksellers such as the alliance between Bertelsmann website BOL and Scandinavian company Bokus will benefit from demand for books in languages other than English, according to IDC.

Christian Asmussen, a research analyst at IDC, said: "Amazon has managed to generate sales several times higher than that of its nearest competitor, which seems surprising given that it lacks local store presence in most European countries."

Amazon has stores in the UK, Germany and Austria, while BOL has stores in 11 European countries.

BOL spokesman Beat Werder said: "Amazon has a strong position and we recognise that, but we are well positioned to take the number two [spot] in the countries Amazon operates in, and we are catching up fast. We are improving in the UK and France, and strong promotions have increased customer awareness."

Asmussen said building its brand would be a priority for BOL, which will need to prove that it can handle the complexity of operating both a local and global presence. "Media merchants should choose early on between a national and international focus. Changing parameters at a later date can mean the addition of significant costs," he said.

Werder said BOL's main strategy "had been to expand internationally" and work with strong local partners. "While Amazon has a very strong brand, it is not been able to expand as fast as BOL," he added.

According to research group Whitaker BookTrack, the internet now accounts for six per cent of all consumer book purchases in the UK. The company found that during the 12 weeks up to 7 May 2000, sales of books online rose by 333 per cent compared with the same period last year.

The alliance between BOL and Bokus has been driven by the current investor climate, said IDC. Internet-related companies cannot rely on the capital markets to finance sustained and heavy losses. Instead, a bookstore needs to increase sales fast.

"Often there are only two ways for a book merchant to increase sales volume fast enough: either through international expansion or by introducing new product lines that complement the books," said Asmussen. "Mergers and acquisitions are used extensively as a swift way of achieving both theses goals."