What is the “political” message of your book?
I am touched by the loss of control over the structuring of consumer markets. The positions occupied by digital giants are worrying. The crossroads between digital and commerce has passed under the radar of public authorities. But also retailers who remained passive before this phenomenon, who were naive, who invested little … The problem is that Amazon’s influence does not end only in e-commerce. It is a point of support for the colonization of other aspects of consumption and lifestyles. Starting from the physical trade and even entertainment … With this work, I wanted to contribute to the awareness of the need to act quickly in order to avoid the suffocation of consumption by a handful of world companies of foreign origin. It is a threat to our economic sovereignty.
“The crossroads between digital and commerce has passed under the radar of public authorities. »
How does this subject of consumption platforming “worry” the economist as you are? What does this say about the evolution of our society?
The world of consumption used to be disturbed by mass distribution. It is revolutionizing the emergence of virtual markets again. A new rule of the game is quickly imposed on her. The new organization of the market is not a problem in itself. On the other hand, I am concerned about digital platforming and the entry of new intermediaries into the business. If it is not supervised, controlled, it risks leading to dominant positions which, once installed, are very difficult to shake. We are far from getting rid of Microsoft and Windows …
Give dizzying figures: 62% of global e-commerce in 2020 was done in the 100 largest global markets.
There are two subjects. On the one hand, the impact of the market on e-commerce, and on the other hand, the place of the leader in this market. Market activity grew twice as fast as e-commerce as a whole. Amazon generated $ 386 billion in revenue in 2020. For comparison, CA. Carrefour world is $ 83 billion. In China, Alibaba, created in 1999, has already earned 109 billion dollars in 2020 (981 million Chinese customers and 240 million outside China). In the next few months, there could be a direct conflict between the titans of e-commerce on European soil.
What could stop this evolution …
The ability to suppress this phenomenon will depend on the ability to invent something else. There is an alternative to the dominant markets: “leaving alone” with the creation of a trading site (there are more than 200,000 active sites in France), launching specialized or local markets, etc.
… consumers themselves? These platforms are criticized for their working conditions, for their environmental footprint … Every project to set up an Amazon warehouse in France is subject to numerous criticisms. Won’t there be a resurgence of consumer citizens?
This is really one of the limits of their influence. In the company, we have moved from a praiseworthy tone regarding Amazon to a more critical view, especially on the working conditions of employees. In our studies at ObSoCo, we have very explicitly observed a refusal to buy on this platform, but this affects only 10% of French people. However, the trend shows that part of the clientele of the American site cultivates a sense of guilt. It continues … because after this mea culpa, in general, the consumer prevails over the citizen.
Only 10% of French people refuse to buy on Amazon »
They are certainly leaders, but is the fight fair?
Of course not. They are champions in tax optimization. They don’t pay taxes. There is a form of predation in the economic sense. Loss-making sales on Amazon are financed from the cloud, for example another profitable business. In 2020, Amazon Web Service (IT service activity) had 12% in the digital giant’s turnover, but 60% in its operating result. It’s not a fair game for independent booksellers who don’t play on equal terms … However, I recognize Amazon’s ingenious moves, but I say that we shouldn’t have allowed this to happen.
The French favor local, French-made, CSR-dedicated companies … How do you analyze this contradiction among consumers?
There is a double division with one part of the population moving towards responsible consumption and the other in the embrace of economic constraints. And beyond, in each of us there is a gap between the consumer and the citizen. Very often, the first registers ideals, and the second reminds us of limitations.
“The game is still open in food, where a dense network of stores is a strategic asset,” you write. Is the player concentration policy therefore more relevant than ever?
Probably because when we look at the masses in the game, it is clear that our leaders are dwarves, eager for profitability, investing little. However, Amazon never distributed a 1 euro dividend and made the choice, very early on, to invest en masse. Walmart is the only one in the world to resist this, as the brand is investing heavily in new skills. In France we still have a culture of power; however, there is the question of invoking a culture of intelligence, of innovation.
Here, too, Amazon’s food ambitions (with Amazon Fresh) together with its logistics knowledge will harm the competition …
Especially since the brand can be patient. Even if France starts slowly, it persists. French players have little respite because the size of the country does not make it a priority for the American brand. But, in spite of everything, we are witnesses a the beginning of large food distribution groups that, since the health crisis, have realized the importance of digital technology.
What is the recipe for the success of specialized markets (ManoMano, Zalando …)?
I believe this because it has to be admitted that the shopping experience on Amazon is pretty bad. What saves her are the 300 million references on her page. It is functionally efficient. But there is a symbolic, non-negligible intangible dimension in consumption. In a specialized market, we can challenge the whole imaginary of consumption. The shopping experience is richer and more meaningful, with the involvement of communities. This is the real difference from Amazon. But even Decathlon or Leroy Merlin arrive a little late …
What are the strengths of DNVB in this new form of organization?
There are many candidates and a few elected officials who can be seen without being established in the market. Some brands present in different sectors (Le Slip Français, Made.com, Loom, Tediber, etc.) enter the market from a narrow category of products and want to maintain full control over the distribution of their products and customer relations. PAmong their advantages are a strong presence on social networks and with influencers and a form of negotiation with consumers.
What do you think are the alternatives for e-commerce to exist compared to Amazon?
They have to invent something else and be part of the next move. E-commerce has already evolved in its forms and will continue to evolve. Those who can seriously challenge Amazon are obviously other digital giants (Google, Facebook, etc.). That it exists in parallel, the desire to buy must be aroused by addressing not the consumer but the person. In this sense, social trade is an alternative route. Social media can help small players. But we need to be future-oriented and invest because we are far from being at the end of the re-invention of the digital trade.
You also mention service models …
In this context, the market relationship is based on offering beneficial effects and contributing to solutions to problems faced by customers. This is the case of BMW-Daimler, which is moving towards “mobility as a service”, Leroy Merlin and Decathlon, and even Somfy, which has switched from motorized shutters to home automation equipment.e. These new services force the consumer to stay in the brand ecosystem and therefore develop revenue streams over time.
What will be left of the post-Covid period in consumption?
It seems that the opportunity to speed up the transition to greater respect for the environment has passed. With the return of inflation, the whole issue of purchasing power (and “purchasing power”) is re-emerging, especially in this context of the election period. This will not help us turn the page to overspending. We are on the antipode of the sobriety we would need.
1988: PhD in Economics from the University of Paris 1, Philippe Moati joined CRÉDOC
1998: Professor at the University of Paris-Diderot, where he holds a master’s degree in “Consultants and responsible for socio-economic studies”.
2011: participates in the creation of the Observatory and Consumption Society (ObSoCo).
2014: joined the BPI France Lab.