* Otto online sales up 6.4 pct to 6.063 bln euros in 2013/14
* Executive pay to be tied to sustainability targets
* Otto squeezed by Amazon, Zalando
HAMBURG, May 21 Germany's Otto,
Europe's second biggest e-commerce player, emphasised on
Wednesday to its commitment to ethical standards as it tries to
face off stiff competition from Amazon and other online
The Otto Group, a family-owned mail order firm founded in
1949 which shifted into e-commerce in the 1990s and now runs
dozens of websites worldwide, said executive pay would be tied
to the achievement of sustainability goals.
These include increasing the use of organic cotton and hard
woods certified as from a sustainable source as well as reducing
emissions of carbon dioxide and improving working conditions for
employees in its supply chain.
"Values are something that sets Otto apart from many other
companies," Chief Executive Hans-Otto Schrader told a news
conference, adding customers, employees and other partners
increasingly demanded that Otto act responsibly.
He said the collapse of a garment factory in Bangladesh in
which more than 1,100 workers died last April had underlined the
need for the clothing industry to take such issues seriously.
Otto reported a 1.5 percent increase in earnings before
interest and taxation (EBIT) to 392 million euros ($536.86
million) for the year ended Feb. 28 on sales that rose 1.8
percent to 12 billion euros.
Online sales grew 6.4 percent to 6.063 billion euros,
including a 7.2 percent rise in Germany to 3.96 billion euros,
albeit at a slower pace than 12 percent growth rate reported for
total e-commerce by the German Retail Federation (HDE).
Consultancy Booz & Company predicts that e-commerce will
grow in Germany to account for 29 percent of sales of apparel,
electronics and furniture by 2020, up from 13 percent in 2012.
Otto is facing competition from Amazon, which saw German
sales grow 21 percent to $10.5 billion in 2013, and online
fashion retailer Zalando, which increased annual sales by 52
percent to 1.76 billion euros.
However both companies have attracted negative headlines in
recent months in Germany for their treatment of warehouse
workers, who have repeatedly gone on strike at Amazon over pay
Schrader admitted Amazon was proving a formidable rival,
noting it was aggressively cutting prices to win market share in
some areas. But he said Otto was fighting back in others, noting
Amazon had stopped selling shoes.
"We win more than we lose," he said.
However, Schrader declined on Wednesday to give a concrete
forecast for the current financial year, citing the tense global
political climate around Ukraine, noting that the group made
around 600 million euros of sales in Russia.
($1 = 0.7302 Euros)
(Reporting by Emma Thomasson, editing by Louise Heavens)