An online shop is one of the few businesses that can actually grow from a proverbial garage company to a global player providing its services worldwide. The first barrier to overcome is the border of one's own state.
We should already be proud of how e-commerce has developed in Poland. Last year, South African Naspers sold the Polish auction platform Allegro for $3.25 billion to a consortium of investment funds. It was one of the biggest transactions in the history of e-commerce not only in Poland but worldwide.
This is an excellent, but not the only, example that Polish e-commerce has considerable potential not only in the opinion of local observers but also according to international investment funds.
In Poland, there is still room for development of both local and cross-border trade. Cross-border e-shopping in Poland accounts for ca. 10% of e-commerce, where the European average is three times higher - 30%.
The European Sprinter
Data shows that in the last 5 years Polish B2C e-commerce has grown by 18% on average. In 2016, it reached PLN 36 billion. This means that juxtaposed with the European average, we are one of the sprinters. Out of the 38.6 million Poles, 67 percent of them have internet access. More than half of all Polish consumers are already within reach of this form of sales.
In Europe, 70% of online sales are made by the “big internet three”, which includes the United Kingdom generating € 48 billion from sales, Germany with € 39.2 billion and France with € 25 billion. Poland features the lowest level of the total online sales volume - only € 3.4 billion. On the one hand, this data indicates that the market is still immature and will have to undergo multiple changes before reaching the level of saturation seen in Western countries.
On the other hand, our market has enough potential to create entities such as the Allegro group, which, as we mentioned earlier, has been sold for a profit. What is more, Allegro's presence was one of the reasons why the American giant Ebay, when entering the Polish market, managed to capture only a marginal share of the market.
There was some speculation (by Reuters, among others) before the sale of Allegro, that the potential buyer could be Ebay, or even the Alibaba Group - a Chinese giant, which is evidently arming up before its big clash with Amazon. The interest of international funds as well as hegemonic market leaders indicates directly Poland’s huge potential on the world e-commerce map. And this potential definitely continues to grow.
One of the key strengths here is the location of our country. Culturally and geographically, we belong both to the East and to the West of Europe, which allows Polish entrepreneurs to enter both the mature markets of Western Europe and the much less developed but also challenging Eastern markets. One of the geographically closest markets is the Russian market, but relatively close - on the other end of the New Silk Route, which runs through Łódź, is China. It is a market both hermetic and fabulously absorbent at the same time.
Poland’s other ally is its own currency. Due to its weaker standing against the Euro, Polish shops can easily compete with Western players on price. It is possible to maintain the European quality of customer service, and being located in the centre of the continent, deliveries throughout the European Union are not an enormous challenge.
e-consumer on the global market
The consumers of today are operating on the global market: they often buy from a country that differs from their place of residence. It is expected that the value of cross-border online sales will break the barrier of $1 trillion by 2020, with the number of cross-border shoppers increasing from nearly 400 million at present, to over 1 billion . Cross-border shopping is motivated primarily by prices or availability of goods, as well as by the quality of products. The commodities that are most frequently purchased abroad include clothing, shoes, electronics, cosmetics and books. Consumers are not the only ones affected by those changes. They will also result in international expansion being a natural path to be followed by numerous local companies.
Author: Justyna Skorupska, Head of Business Consulting Europe, e-point
Marketing & PR Manager
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