Exploring the Allegro Marketplace

This post introduces us to ecommerce in Poland and Allegro, the leading Polish marketplace.

There’s no doubt about it, Poland is a major European ecommerce market. You only have to look at the marketplaces that play there. Amazon established a fulfilment centre there in 2014 and at the beginning of the March 2021 launched Polish Amazon with 100 million products in 30 categories. eBay is there too (at Volo we fully support Amazon.pl and eBay.pl from within Volo Origin and Vision). And then there’s Allegro.

Before we get onto Allegro, let’s look at some facts about Poland:

• 38 million people live in Poland, the 5th largest population in the EU
• It’s the largest economy in Central and Eastern Europe
• Poland is the 13th largest developed economy in the world, according to the OECD
• Its economy has consistently outperformed the EU average since 2009 and in 2019 was two-and-a-half times the average
• In 2019 Poland’s ecommerce industry was worth PLN 52 billion (The Polish Zloty, worth about £10 billion today) which was 8% of total retail at a compound annual growth rate since 2016 of 19%, compared to 11% in the UK

So Poland is a large ecommerce market in Europe, without question. Which brings us back to Allegro. Allegro is the 800-pound gorilla in Polish ecommerce, enjoying a pretty dominant position among Polish online consumers. Consider these statistics:

• Allegro is the primary consumer touchpoint 47% of the time when buying an item online in Poland (as of June 2020). Contrast this with Google at 19%
• Its GMV was 12 times the nearest competitor in 2019 and its market share was increasing more rapidly too
• It enjoys over 20 million visitors every month, which is 63% of the Polish population aged 16 and over, and 12.6 million users are active annual buyers
• Customers buy over 1.2 million products every day, around 95% of which are new, fixed price items
In an independent 2019 survey by Gemius, 80% of respondents said Allegro was their preferred ecommerce brand
• A staggering 125,000 sellers are registered to sell on the platform, from the largest brands to the eBay-style hobbyists
Despite this dominance, Allegro’s penetration of the total Poland retail market is only 3%, which indicates there is significant headroom for growth

Put all this together and you have a very powerful and popular ecosystem. Factoring in the 35 million leads from Allegro-owned price comparison site CENEO.pl, for example, the product listings grew 47% in the year to June 2020, and active buyers grew 13% in the same period.

And what about the basic operational aspects of Allegro? Well, it was founded in Poznan and now has additional offices in Krakow, Torun, Warsaw and Wrocklaw. It covers all the main categories and is especially strong in the 4 main ecommerce verticals: automotive, electricals/tech, fashion and home & garden.

Allegro started out as an auction site in 1999. Rather like eBay’s heritage and set-up, then, each product from each seller is listed and sold individually. This is in marked contrast to Amazon, Cdscount and OnBuy, for example, with their product catalogue approach. Since each listing needs to contain all the information you’d need to feel good about buying it, it goes without saying that the quality of your listing data is paramount.

Allegro’s answer to Amazon Prime is Smart! Launched in 2018, Smart! is a subscription loyalty program designed to emphasise value for money and remove the barriers of delivery cost and returns. This has transformed the delivery – and therefore buying – experience for consumers, since 62% of listings offered free Smart! delivery in June 2020. Furthermore, 75% of products are delivered within 1 or 2 days, track and trace on Smart! purchases are captured 98% of the time, and there are 25,000 pick-up points and lockers in the network.

Apart from free delivery and returns, there are Smart! deals every day, and various events and premières, all for an annual subscription of PLN 49 (about a tenner). Unsurprisingly, Smart! consumers order two-and-a-half times more frequently than non-Smart! buyers, which is not to be sneezed at when you know that there are over 2 million of them and growing.

This paints a picture of a very local base of active buyers that grew, as we’ve already said, 13% year-on-year. Against the backdrop of the pandemic they’ve been spending more too, with active buyer GMV increasing 29% in the 12 months to September 2020 compared with 2019. Together with non-active buyers, this pushed up Allegro’s total GMV to PLN 24 billion (about £2.5 billion) for the first 9 months of 2020, half as big again as the 2019 equivalent period.

What about currency, culture and language we hear you say? In a future post we’ll cover more of the detail around how to get started selling on Allegro. To discuss adding Allegro to your current coverage of online channels, and to find out how you can grow profitably by centralising your multichannel efforts, you can get in touch with us here.