Marketplace Leaders:
Kim Niedner,
Otto Market

Kim Niedner

OTTO Market, Division Manager Sales und Partner-Portal OPC

In recent years, the Hamburg-based retailer Otto has undergone significant challenges and changes. Otto has consolidated the German retail landscape almost single-handedly and merged it into the Otto Group. At the same time, Otto became one of the largest online retailers in Germany and added its own marketplace to this business a few years ago. In the 2022/23 fiscal year, Otto generated revenue of 6.3 billion euros. With over 17 million products from more than 6,000 OTTO Market partners, Otto offers its more than 11.3 million active customers a continually growing range of products.

Kim Niedner has helped build the OTTO marketplace over the past few years and is currently the Division Manager Sales and Partner Portal OPC at OTTO Market. In this role, Kim is responsible for marketing, sales, business development, and the development of the partner portal. He has been with OTTO for over 10 years, during which time he was responsible for Strategy & Digital Development, among other roles. Before joining OTTO, he worked in strategy consulting. In his free time, Kim enjoys playing tennis and skiing.

Our Managing Partner and marketplace expert Thomas Natkowski talks to Kim Niedner from OTTO Market about current developments and opportunities in the market.

How have you perceived and managed the market fluctuations in recent years?

Current issues such as inflation and the impact of the pandemic are of course challenging for all of us. One crisis is currently following the next – the term “multiple crisis” is often used in this context. The resulting weak consumer climate is naturally also having an impact on our business at OTTO. We are closely monitoring these macroeconomic developments throughout the company. Even before the crisis, we had already decided to transform ourselves into a platform in order to position ourselves well for the future. We have stuck to this strategy and have therefore been able to cope well with the challenging times so far.

How are you monitoring the development of customer purchasing behavior during times of inflation, war and, until recently, the coronavirus pandemic?

The current crises have changed consumer behavior in general. The entire industry has experienced a slowdown in business since the pandemic. However, OTTO has managed to maintain the number of active customers throughout, although we also notice that consumers are currently more hesitant to shop and are holding onto their money more tightly. Of course, we are not alone in this observation; it affects the entire market.

What sets OTTO Market apart? What goals have been achieved in the first years and which have not?

The transition to a platform is the biggest transformation in OTTO’s history. We built the marketplace from scratch within a short time and opened it to external sellers. This allowed us to significantly expand our range and offer customers an even wider selection of high-quality products.

Hervorgehoben:

Since the launch of OTTO Market, we have increased our turnover to a total of 6.3 billion euros and thus achieved our goal of further growth. We now have over 6,500 partners who sell a significant proportion of the 17 million products on otto.de. Our customers benefit from this new customer experience with a larger and more attractive range of products.

As we continue to grow, it is also important to us to maintain the quality of the products we offer and to remain true to our values. This includes close and trusting cooperation with our partners.

We have always placed a special focus on sustainability. This has not changed with the transformation into a platform. At OTTO, we have set ourselves ambitious goals in this regard by 2030 and want to be climate-neutral in all core processes by then. For us, this means driving forward the continuous expansion of our sustainable product range and ensuring even greater presence of the corresponding products. However, we are still developing some processes in the marketplace and are still working on technical capabilities that we consider necessary. We will continue to actively drive forward this expansion in the next fiscal year.

How do you ensure that the products on offer meet the high quality standards? And what criteria does OTTO take into account?

Right from the start, we had very clear ideas regarding the development of our marketplace, as well as the quality standards of our offerings. Ensuring our values of “sustainable, fair, personal” throughout the entire transaction process is particularly important to us. For example, we have effective review mechanisms that focus on customer-relevant KPIs, such as delivery and returns times, to ensure customer satisfaction. Partners who do not meet our quality standards cannot sell with us.

Additionally, we have basic requirements that every seller must meet and minimum product standards, which we clearly communicate on www.otto.market. We individually review these during each registration before allowing a connection to otto.de. In the connection process, further company checks, such as legitimacy verification, take place.

Which developments in the market are particularly relevant for you? And what significance does AI, for example, have for your business model?

As a tech-driven company, AI is naturally very important for OTTO. By using AI technologies, for example, we can generate personalized recommendations for our customers to improve their shopping experience. We recently tested an AI assistant in partnership with Google Cloud on otto.de. Some customers entered a question in the chat bar above the product reviews for an item and received an answer based on the existing reviews within seconds. AI also enables us to optimize internal processes and increase logistics efficiency.

Alongside the trend of increasing digitalization and changing shopping behaviors, we also observe growing interest in sustainability. More and more customers value environmentally friendly products and companies that act socially and ecologically responsibly. We see the opportunity to adapt our range accordingly and offer sustainable alternatives. This can both increase revenue and make a positive contribution to society.

A look at the market shows a strongly growing presence of other marketplaces. To counter this competition, we place increased emphasis on the quality and sustainability of our offerings. The careful selection, transparency of the supply chain, and close cooperation with our partners gain new significance. By continuously adapting strategies and maintaining high flexibility, we aim to achieve competitive advantages and offer customers an attractive shopping experience.

What are the growth areas for the OTTO marketplace?

Above all, we want to grow together with our partners. This includes expanding our current technical capabilities in order to provide our customers with an even broader range of products. We have already introduced the “Drugstore” category for the marketplace this year. The online market for beauty and drugstore products is growing steadily and the forecasts for the coming years are very promising.

We want to benefit from this growth and continue to develop as a platform. Therefore, we closely examine the market and customer potentials and prioritize the next product groups we want to launch, such as assortments in the health and dietary supplements sector. We are specifically looking for partners who can offer these products with us. But we are also constantly expanding our offerings in existing categories, such as furnishing and living.