Amazon.com, Inc. (NASDAQ:AMZN) has settled on Deutsche Post AG DHL to deliver groceries for its AmazonFresh services in Germany.
A solution for raised concerns
This is expected to help ease the concerns raised over the U.S. retailer’s delivery services stating that they are an increasing threat to the logistics group in Germany.
The Chief Executive Frank Appel of Deutsche Post said, “We want to be the service provider for online grocery sales.” This was during the annual general meeting with shareholders. Deutsche post already delivers packages for the online retail giant in Germany. Amazon declined to make any comments.
Package delivery services of goods purchased online through websites including Zalando SE (FRA:ZAL) and Amazon has been booming lately in Germany. This has resulted to increased profits for the Deutsche Post. Amazon has also begun developing their own logistics capabilities in several other countries.
The second biggest market for Amazon
Germany ranks as the second biggest market for Amazon. However, grocery e-commerce has experience a slow takeoff in the country due to the high density of food stores as well as dominant discounters Aldi and Lidl have been sluggish in joining online platforms.
REWE, the second biggest supermarket chain in Germany has invested heavily in e-commerce as they anticipate the move into food by Amazon.
The online retail giant introduced fresh food delivery services in Seattle in the year 2007. Since then, it has expanded to several other cities in the U.S. last year including London.
Deutsche Post also runs an online supermarket, Allyouneed Fresh. Appel reported that the company has no intention of closing down. It will continue to operate even as they take up delivery of the same fresh food for Amazon.
Future expectations into the grocery market in Germany, is speculate to account for about 3% by the year 2020. This is an increase from the current rate of 1%. This is according to Management consulting firm A.T. Kerney reports.
The stock of Amazon closed at $924.99 on April 28 after a rise $6.61 or 0.72% while the share of Deutsche Post closed up $33.00 after a rise $0.59 or 1.82%.
