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Amazon Takes A 25% Stake In Colis Prive To Ramp Up Its Delivery Network In France

TechCrunch TechCrunch 1/05/2014 Ingrid Lunden

E-commerce giant has reportedly made its first investment into the French market: it has acquired a 25% stake in , a delivery company that competes in France against the likes of state-owned La Poste, and global giants TNT, DHL, UPS and FedEx to deliver parcels. The news was first reported by the French blog , and we are reaching out to both companies for confirmation.

Terms of the investment were not disclosed.

If accurate, the move makes a lot of sense for a number of reasons. In the U.S. Amazon has built up a formidable logistics operation. But to improve margins and general efficiency, it has been slowly working on ways of extending that even further, with reports last week that it is testing a in San Francisco, Los Angeles and New York. Last-mile delivery is something that companies like Google and eBay are also exploring.

In France, it looks like Amazon is instead looking at partnering with a local player, at least in the initial stages, rather than building something out from scratch on its own.

Le Journal estimates that in France, Amazon ships around 50 million packages annually. With that kind of scale, if Amazon can better control distribution to the customer, it can reduce its own costs more, and potentially also pass that savings on to users, or at least use it to get more aggressive on pricing against its competitors.

Colis Prive is a strategic bet for Amazon in a couple of ways: one of its two depots in the country happen to be right next to one of Amazon’s biggest French warehouses (playing up the idea of cost-reduction).

But it is also a significant move for the company at a time when it has faced significant backlash in France over accusations of it destroying French businesses. That has seen “anti-Amazon” legislation — for example — get raised. (That law, by the way, has now been passed in France but is facing potential blockage at the EU level.)

Taking a stake in a local business means that even if Amazon cannot make aggressive price cuts on one front, it can try to reduce costs in another, and it will be doing so by investing in a French business no less.

Those who have been up in arms over Amazon’s role in France will either love them for making the move, or hate them for having figured out a way to wiggle out of what would have been a significant penalty on doing business in the country.

In any case, it could be a match made in anti-socialist heaven. Colis Prive itself appears to have been borne out of a will to rage against the French machine: it was originally , as an alternative to La Poste during a particularly strong wave of union strikes. As of 2012, the company says that it employs 300 people and has distributed more than 25 million packages.

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