As Amazon sets its sights on central and eastern Europe, the e-commerce giant will need to convince long-time Allegro shoppers like Elzbieta Modrakowska to click away from the region’s leading online marketplace.
While prioritising its expansion to other, bigger markets, Amazon has given companies such as Allegro the time to lay deep roots and prepare for its arrival - something the Polish firm has done with loyalty programmes, free delivery and other perks.
“I don’t think we will switch ... Allegro has set the bar very high,” said Modrakowska, whose weekly shop spans everything from organic food to batteries. She is one of Allegro’s 20 million monthly customers in Poland, a nation of 38 million.
“It has the parcel lockers option and I don’t know how Amazon will handle this. Waiting for a courier or going to the post office is not an option.”
Amazon launched its Polish website on Tuesday, entering a fast-growing e-commerce market with a proven playbook and global reach that have already secured success against entrenched local competitors in other markets, such as Argos in Britain.
“Business is not winner take all - industries rise together,” an Amazon spokesman said when asked about local competitors.
“There’s a ton of greenfield ahead – and there will continue to be lots of winners,” he said, adding the company focused on customers rather than competitors.
The U.S. company currently has a tiny presence in emerging Europe’s e-commerce market, which Euromonitor estimates at 16 billion euros ($19 billion) in Poland and 6 billion euros in the Czech Republic. Until now, it has run logistics centres in the region and served customers from its German website.
The region is dwarfed by Europe’s top e-commerce markets of Britain and Germany, worth 1 trillion euros and nearly 700 billion euros respectively, according to Euromonitor.
But Poland’s 42% growth rate leads Europe, and makes it an attractive target.
Allegro told Reuters it had improved terms for shoppers and third-party sellers alike during the COVID-19 pandemic, as more consumers shifted online.
“We reduced fees and provided extended payment terms,” Chief Executive Francois Nuyts said. “We are convinced that by serving sellers and consumers extremely well during the pandemic, they will stick with us.”
Source: Reuters
