* Amazon expanding "Fresh" business in US, eyeing Germany
* Ocado not rushing into international partnership
* Ocado sees 40-60 pct of grocery market moving online
* Amazon like to prevail over Tesco, Waitrose
By Emma Thomasson
LONDON, March 13 British online grocer Ocado
sees Amazon's push to sell more groceries as
more of an opportunity than a threat, believing it will
encourage big international retailers to look for partners to
help them get set up in e-commerce.
"What Amazon is clearly doing is awakening the global
grocers to the online challenge they are going to face and they
are accelerating the opportunities for us as a platform partner
provider," Ocado Chief Executive Tim Steiner said on Thursday.
Amazon plans to expand its "Fresh" grocery business within
the United States this year and is reported to be considering
launching in Germany, its second biggest market, prompting big
retailers in the country to seek to set up online operations.
Ocado expects to strike partnerships with retailers outside
its home market Britain like its 200 million pounds deal with
Morrisons, Britain's No. 4 supermarket group, to provide
its online grocery operation.
Speaking at the Retail Week Live conference where he was
continually approached by executives offering business cards,
Steiner said he had already spoken to 40-50 global retailers
about working together, including a dozen this year.
But Steiner told Reuters Ocado was not rushing to do a deal
with an international partner, noting that it had been able to
launch online sales for Morrisons quickly because it had spare
capacity, with a new warehouse taking 2-1/2 years to build.
"We're working on more scalable, modular, faster-to-market
solutions," he said. "Rather than succumbing to market pressure
to announce something, we continue to focus on the long-term."
Ocado, which mainly sells products supplied by upmarket
grocer Waitrose, has seen its share price rise more than
four-fold over the last 12 months. It posted an 18 percent rise
in first-quarter retail sales on Wednesday, putting it on track
to make its first annual pretax profit this year.
Online grocery sales will roughly double from 2012 to 2016
in five major northern European markets - Britain, France,
Germany, Switzerland and the Netherlands - the food and consumer
goods research group IGD forecasts.
Steiner predicted that 40-60 percent of grocery would
ultimately be sold online in the developed world, up from just 5
percent in Britain now and much less than that in most other
countries: "We are going to end up as a global business."
"As we grow online and as the stores get cannibalised, the
economics are going to shift so wildly in favour of the online
grocer ... that it is going to become the cheapest place to get
groceries, with more selection at lower prices."
While Amazon is not currently a serious competitor, he sees
the world's biggest online retailer as the main long-term rival.
"Ask me who will be our biggest competitor in online grocery
in 20 years time, is it more likely to be Waitrose or Tesco
or Amazon? I would place my money on Amazon," he said.
"Grocery retailing over the next 20 years is going to be
driven by technology ... I don't rate the technological skills
of my competitors versus the technological skills of Amazon."
While Amazon moves to complement its sales of books and toys
with food, Ocado is expanding its offering of higher-margin
non-food goods as customers seek combined deliveries.
Steiner said he was also looking to leverage the Ocado
delivery network for sellers outside of its network.