It is the end of the e-commerce market as we know it. Amazon – the most powerful giant in the sector – has just launched operations in Poland. Does Allegro, the platform through which Poles learned to shop online, stand a chance against the American online sales leader? Who stands to gain from this battle, and who should prepare for it particularly well?
Amazon's decision to start operations in Poland, as well as Allegro's stock exchange debut – are undoubtedly the most important moves on the Polish e-commerce market in recent years. It appears that both companies have prepared well for the fight for both customers and sellers. One thing is certain – an interesting period of competition for the market on the Vistula lies ahead – it is worth observing the solutions implemented by the competing players in the battle for the customer.
What is the fight about?
What is the fight about?
According to data from eMarketer from May this year, the e-commerce market is growing fastest precisely in the Central European region – by 21.5 percent year-on-year. Already now, according to PWC, it accounts for 14 percent of the value of the retail goods sales market.
– Amazon's entry into the Polish market can only strengthen the migration of buyers and sellers to e-commerce, who – just as in the most advanced online sales markets – will mainly move to marketplace-type platforms. Globally, more than 50% of the value of all online sales already consists of transactions on this type of platform. Amazon's entry will certainly translate into accelerating this trend in Poland as well. The companies that may see declines, however, are traditional offline players who have not prepared sufficiently for online sales – says Karol Tak, Head of Marketplace (Amazon) G Media Plus.
Will Amazon repeat its Dutch success in Poland?
Will Amazon repeat its Dutch success in Poland?
In the context of Amazon's first months of operations in Poland, the perspective of the Dutch market is interesting, where the giant opened its official marketplace Amazon.nl almost exactly a year ago. According to data from United Internet Operators (VINEX), within just one year it managed to double its already high reach among Dutch internet users. Today it is already more than 7 million unique users. What decided its success?
– Amazon is known primarily for its very broad product offering, excellent customer service, and very favorable prices. It is this last factor that seems crucial, as confirmed by the research firm Omnia Retail, which examined the price differences of products offered on Amazon and on other marketplaces in the Netherlands. Its analyses show that Amazon's prices at the time of market entry were lower than those of competitors for 73 percent of products. The differences were particularly visible on the most popular products – such as toys and electronics – whose prices were up to 18 percent lower compared to those offered on other shopping platforms. This allowed Amazon to match the largest Dutch player Bol.com in the number of click-throughs in price comparison sites. The promotion related to commission reductions, which Amazon announced for Polish sellers along with its entry, may indicate that the situation on our market may be quite similar. The announced reductions currently concern the Home and garden, Home and kitchen, Sports and tourism, and Clothing, footwear, accessories categories (commission reduction from 15 to 10%) and the Consumer electronics and computers category (commission reduction from 7 to 5%) – adds the G Media Plus expert.
Amazon vs Allegro: who will benefit from the battle of the giants?
On the other hand, research conducted by Capterra in September last year shows that 89 percent of customers prefer Bol.com over Amazon when a product is available in both stores. This situation looks promising for Allegro, which in our market is the undisputed number 1 in terms of awareness.
Who will benefit the most?
Who will benefit the most?
One thing is certain – when Amazon enters a market, a high standard of service becomes more important than ever. The giant is known for its policy of putting the customer at the center of all decisions. Allegro also understood this some time ago, creating solutions tailored to customers' needs and expectations. Both companies have implemented fantastic loyalty programs – Amazon Prime and Allegro Smart. Both have also been ensuring buyer safety for many years through increasingly better service, including complaint handling, as well as the quality of logistics services.
However, in this context – logistics is a particularly strong point of Amazon and is indicated by partners as the greatest advantage of cooperation with this company. For many years, sellers have been able to use Amazon's fulfillment services in the FBA model, which cover comprehensive storage, packing, delivery, and after-sales service. Allegro has also announced the start of cooperation with partners under the Allegro Fulfillment program – details are not yet known, but everything indicates that the company is preparing very interesting solutions for both buyers and sellers.
Who will win?
- One most important answer comes to mind: buyers will win – who, on both the Amazon and Allegro sides, can count on attractive prices, a wide selection, and excellent service. Sellers will also win, taking advantage of the opportunities offered by both platforms. The costs of running a seller account, assuming participation in programs for professional sellers offering similar tools, are comparable on both Amazon and Allegro. However, they represent a fraction of the profits that can flow from using them properly. Simply listing products after registration is already free, so it is worth diversifying your sales channels by using both platforms. It is also worth remembering that running a seller account is not easy, especially at the beginning. It involves the need to implement many new functionalities and tools. Therefore, when starting operations, the help of an expert for the chosen platform can be invaluable. Assistance in the registration process, auditing logistics processes, creating appropriate offers and positioning them on the platform – will translate into the ability to capitalize on the interest of both Polish customers in the new market player and foreign buyers and reaching them through appropriate positioning of the account against the competition. – summarizes Karol Tak, Head of Marketplace (Amazon) G Media Plus. Undoubtedly, these will be very interesting times for Polish e-commerce.
Summary
Amazon's entry into the Polish market and Allegro's stock exchange debut are the most important events in domestic e-commerce in recent years. Experts indicate that buyers will gain the most – thanks to price competition and high-quality service, as well as sellers, who will diversify their distribution channels. The example of the Netherlands shows that Amazon can double its reach within a year, offering prices lower by as much as 18 percent in key categories. At the same time, Capterra research proves that local players, such as Bol.com or Allegro, enjoy greater customer trust when a product is available on both platforms. Logistics will be key – Amazon's strong point.
