Countries across Europe are seeing the rise of COVID-19 cases which led many governments to enforce new decisions in order to slow down the outbreak. Some of the measures have led to a series of economic debates about the long-term impact of coronavirus lockdown and decline in offline sales.
One of the government actions that has heated the discussion was the French government’s ban on buying non-essential goods during this November. This includes the closure of non-essential stores, followed by the ban on the sale of all ‘non-essential’ items in supermarkets.
However, the consumers are shifting to digital, and while turning to online shopping the companies such as Amazon are threatening to become the “pandemic giants”. The French junior Economy Minister reacts by requesting Amazon to stop with their biggest advertising campaign.
Online holiday shopping 2020 breaks the records
People in France are only allowed to leave their homes to buy essential goods, for medical purposes, and to exercise for one hour a day. According to the news portal France24, the country is unlikely to lift a partial coronavirus lockdown any time soon.
Inevitably, the measures highly affect French small businesses that haven’t digitized their operations, while some corporations such as Amazon and big retailers who have developed online sales channels, continue to grow. Nonetheless, almost one-third of French consumers expect to shift to online purchases for holiday shopping.
The French junior Economy Minister Agnès Pannier-Runacher, who was alarmed by the situation, asked Amazon to stop their Black Friday ads in France. “It was not at all appropriate at a time when 200,000 businesses will have to shut their doors”, she noted. Answering the fair-play business pledge Amazon suspended the ads in France.
New survey results (McKinsey) showed that more than 60 percent of global consumers have changed their shopping habits. The flight to digital is seen across countries and categories. E-commerce continues to boom with 37 percent of consumers planning to shop more online.
In France only, 56 percent of shoppers have already changed their shopping habits and switched to new brands and stores. This shock to loyalty was mainly triggered by the need of customers for more convenient shopping.
France struggles to balance — just like any other country
Being the fifth largest in the world, the French economy presents around one-fifth of the Euro area gross domestic product (GDP). Although the state economic policies are market-oriented, there is a strong legislative background that supports the substantial action of public authorities, especially when it comes to businesses with an element of French culture.
From French perfumery to artisan bakery and book-stores, there are many small, authentic, and locally–run businesses that are endangered by Amazon. Even though many customers prefer the traditional shops, the government recognized the power of eCommerce and underlined the possibilities of developing a monopoly position, in the days when physical shops are closed.
The correlation between maintaining public health, the state economy, and preserving local heritage is indisputably complicated. While many business owners argue that the government’s decision to close their stores is not justified, many think that lockdown is the right thing to do. Additionally, a recent Pew survey showed that Emmanuel Macron is perceived as generally positive ratings: A median of 67% across eight EU member states had confidence in Macron.
Amazon in Europe: New milestones despite court restriction and data complaints
The Black Friday ban case was not the first time for France to address Amazon on a similar matter. This April a French court limited Amazon to orders of groceries, hygiene, and health-related products. Amazon was warned to pay 1 million euros per each day the decision was not respected.
The French union group Sud Commerce organization brought Amazon to court by claiming that over 100 workers from Amazon France were being forced to work in close proximity. The court ruling eventually led to the closing of six Amazon warehouses.
As Bloomberg reports, at home, Amazon faces much weaker unions than it does in Europe, where participation hovers close to 23% on average compared with about 10.3% in the U.S. Furthermore, the turbulences in Europe go back before the pandemic when the EU General Data Protection Regulation (GDPR) brought attention to the possible Amazon’s data collection concerns.
Despite the difficulties, the retail giant that once was an online bookseller has gone a long way in Europe. Amazon’s most recent milestone is the very first air freight center in Europe. The 20,000 square meter cargo facility is located at the Leipzig-Halle Airport in Germany. It is supposed to create a new connection within the company’s European logistics network, and eventually generate more than 200 jobs locally.