25 Oct While Allegro goes for German market, Amazon makes its move towards Polish one
Just before last weekend, the private equity fund managed by Cinven, Permira and Mid Europa acquired Allegro for 3.35 billion dollars. This is the value of buyers from the leading Polish auction website. Nevertheless, some share of them may soon be taken by Amazon, launching Polish version of its German website. Is this – together with Allegro starting to operate on German market – going to change online sellers’ situation?
German online buyer spends 5 times more
The acquisition of Allegro was called the largest transaction in the history of Polish Internet. Active website users may be wondering if Allegro having new owners means also new policy. It’s definitely too early to claim so, but it’s worth noticing that earlier this year, Allegro got interested in German market.
Allegro has already over 20 million registered users making 14 million transactions a month. Going for German market with Allegro.de, the auction website encourages Polish sellers to receive higher income from their auctions. German online buyers spend on average 2.2 k euros, while Polish ones- only 400 euro per year.
Allegro provides Polish sellers with full support – the auction available on Polish website can be duplicated without any additional cost to German website. The comission per sale is identical for both countries. What’s more, Allegro translates automatically – and for free – the auction content into German and exchanges the rates from Polish zloty into Euro currency, based on current exchange rate. The only thing that sellers need to do on their own, is to define the shipping cost to Germany but even in this case, they can use DHL that cooperates with Allegro.
According to Allegro, the e-commerce market in Germany develops slightly faster (23.1% yearly) than Polish one (18.4%). The question is if Allegro is able to deal with such important players as Amazon or eBay.
We are observing increased price monitoring on German market which means that Polish online shops are attempting to enter. Although the competition is strong, Polish sellers have chances to succeed, provided attractive prices and shipping terms are given. In case of Allegro, its success will also depend on how it will be promoted in Germany, but it’s wise to provide such a strong support for Polish sellers that helps to reduce language and other barriers to entry the new market. - comments Grzegorz Brajewski, CEO of PriceLab.
Polish Amazon starts from Germany
More less at the same time when Allegro changes the owner, Amazon launched its Polish version: Amazon.de.
Amazon.de is not a separate shop yet but it’s an important step towards Polish customers. Although Amazon has incredibly strong position, Polish sellers not necessarily have to loose this battle. Prices in Polish version of Amazon.de are given in euro, which may restrain Polish customers from shopping decision. What’s more, shipping time is slightly longer- it can take from 3 up to 5 days. Still, Polish sellers should take a closer look at Amazon’s activity and monitor their prices to be provide most attractive offers. – says Grzegorz Brajewski
Not all elements of new website are available in Polish but there are already plenty of products dedicated to this market and the customer support also operates in this language. Still, there are products that cannot be ordered. The payment can be made with credit card only. The delivery is free of charge for Polish territory if the order amounts to at least 39 euro.
Shopping in Amazon should now be easier for Polish buyers but it still looks more like the online retailer is rather testing the new market than deciding for a full entry. Amazon has logistic centres in Poland but there are no official representatives yet. It looks like Allegro has made much smarter move towards Western Europe, but it’s also possible that new policy will come with new owners. As usually, we will need to wait to see the results of both strategies of e-commerce giants.