The Amazon bandwagon rolled into Paris last week for the glittering launch of the giant net retailer's latest branch, www.Amazon.fr. Before a lavish party on the Seine, chief executive Jeff Bezos declared ambitions for the French site familiar to Amazon-watchers around the world: to become number one in the country for online sales of books, CDs, videos and DVDs.

But Amazon might not find France as easy to wow as the UK or Germany, its other European beachheads.

As well as fierce competition from three local incumbants, the American retailer will also be unable to use a key weapon in its armoury - price cutting.

Amazon started working on its French website in secret 18 months ago. The company failed in an effort to buy an existing online bookshop, so had to build everything from scratch. "We chose France as our third European plant," says Amazon.fr managing director Georges Aoun, "because electronic sales are really taking off, with the largest growth in Europe."

But other companies have bet on the same idea. "Book sales in France are valued at 14 billion francs (£1.4bn), out of which only 0.5 per cent are sold on the Internet," explains Sophie Rasle of a rival, bol.fr.

"In comparison, in the United States, 5.4 % of books are sold on the Internet. We hope the arrival of Amazon will boost the market."

Indeed, all Amazon's competitors in France remain positive, counting on enlargement of the market. The leader in online book sales is fnac.com , whose bookshops also dominate the "bricks and mortar" market for books and CDs, with a 15 billion-franc (£1.5bn) turnover.

"We are rather surprised that Amazon did not come earlier," says Jean-Christophe Hermann, fnac.com chairman. "Isn't it risky arriving so late?"

In second position comes Alapage.com, a website bought by France Telecom in October 1999. Its creator, Patrice Magnard, is confident too.

"We have been established since 1988 when we started online sales of books with the Minitel system. We launched our website in March 1996."

Far behind Fnac and Alapage comes a CD discounter, Amazon.com and bol.fr, launched in February 1999 as a joint-venture between German publishers Bertelsmann and French counterpart Havas.

With its French website, Amazon is taking aim at a worldwide market of 160-million French speakers. But the e-tailer, which has lost 70% of its market value this year, is likely to find it as difficult to turn a profit with amazon.fr as it has elsewhere. In France, most commentators think e-commerce will not be profitable for another three to five years.

"Our development requires lots of investment, in terms of technology as well as logistics," says Amazon's Georges Aoun. "Our advantage is being able to share these investments between several countries, as for our call centre for customers in the Netherlands."

But despite its multinational approach, Amazon will still have to abide by France's block on book discounting.

The bar exists because, in France, books are considered "privileged vehicles of culture", and have to be accessible to any citizen at the same price in any part of the country.

But Aoun says discounting is not a vital part of the Amazon offering. "One cannot say that Amazon won the American market because we offered 30% discounts," he claims. "Prices don't determine the choice to buy online. Customers appreciate the large catalogue we offer as well as shopping at any time."

"E-commerce is not alone in using price competition in the United States and in Britain. This is linked to the structure of the market. Moreover, in Germany, where prices are regulated, Amazon.de is the market leader."

That site was launched in October 1998, six months after Amazon bought up a small online bookshop, Telebuch.de. Most countries in the European Union regulate the price of books. Only Belgium, Finland, Ireland, Britain, Luxembourg and Sweden do not.

To counter regulation, many readers go to Belgian websites, such as Proxis.be, which offer discounts on French books. But this importing of books is against French law, and the publishers' trade union is now suing the Belgian website.

"Belgium is worth it if you are here to pull it off quickly and then leave," says Aoun. "But if you want to become rooted in a market, you have to play the game."

"The Belgian examples are not convincing," adds Jacques Mazel of publishers Fayard. "Our position, as French publishers, is to refuse to supply them."

For him, e-commerce in books is a real opportunity, even without discounts. "It's important for us to be referenced by these websites because it makes it easier to sell older books that one can rarely find in a bookshop."

Antoine Gallimard, chairman of the eponymous publishing house, also says that "electronic technology must enable us to preserve the content of our books."

But he warns: "We have to invent new solutions to stop Amazon, Alapage or Fnac alone controlling the market. Once we are able to use the Internet to support our writers and discover others, we will have won our bet."

Jean-Christophe Hermann, chairman of the online wing of giant French retailer Fnac, adds that France's restrictive laws could even be good news for Amazon, which has watched its stock plunge in recent months in the face of market worries about when it will become profitable.

"The economic model of the internet does not make goods cheaper than when they are sold in traditional shops," he says.

"Amazon cannot afford to be a discounter anymore. Because of its terrible losses, it has to become profitable."