The leading player in Poland’s e-commerce market, Allegro, has seen its profits rise rapidly during the pandemic, as Polish shoppers – like those elsewhere in the world – have increasingly moved their shopping online.
Allegro Group, whose listing on the Warsaw Stock Exchange in October was one of Europe’s biggest initial public offerings in 2020, saw its profits pass 355 million zloty (€78.4 million) in the first quarter of this year, reports Business Insider Polska.
That was 157% more than in the same period of 2020 and 36% more than in the final quarter of last year, which is usually the best time of year for retailers.
In Europe's biggest IPO this year, and largest ever in Poland, shares in Allegro jumped 65% after it listed on Warsaw's stock exchange today, giving the firm a market value of $17.4 billion and putting it ahead of CD Projekt as Poland’s largest listed firm https://t.co/kx1yWS1jyq
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Founded in 1999 and headquartered in Poznań, Allegro Group runs Poland’s largest e-commerce platform, Allegro.pl, as well as leading price comparison site Ceneo.pl. In 2016 it was purchased by three international investment funds from its previous owner, South African multinational Naspers.
The group’s revenues during the first quarter of 2021 reached 1.21 billion zloty (€265 million), up from 0.75 billion zloty a year earlier. The majority, 994 million zloty, came through commissions from sellers, with a further 101 million zloty from advertising, 50 million zloty through Ceneo, and 59 million zloty from Allegro’s own sales.
While Allegro’s number of active users increased 13.4% year-on-year to reach 13.2 million, sales rose by 61%, notes Business Insider. This meant that spending per active user went up by 38.9%, to an annualised average of 2,880 zloty (€636). The platform’s average commission from sellers also rose to 10.43% from 9.32% last year.
“Buyers have not given up on shifting to online shopping, which we have seen since the start of the COVID-19 pandemic,” commented Allegro’s management board. The value of products sold through its platform in the 12 months ending in March 2021 amounted to 38.1 billion zloty, an increase of 55.6% compared to the same period a year earlier.
The firm also said that its “Allegro Smart!” programme, through which users can get free delivery to parcel lockers and collection points, has boosted sales revenue. Its board expects gross merchandise value (GMV) to rise by 20% in 2021, net revenues by over 30%, and adjusted EBITDA by around 20%.
Allegro noted, however, that the recent entry of Amazon into Poland’s e-commerce market as well as the investment in parcel lockers by Alibaba has “intensified competition”. This “may lead to…a significant deviation in financial results for 2021 from our expectations”.
In March this year, Amazon launched its long-anticipated Polish website, offering products directly to consumers in Poland for the first time.
Main image credit: Allegro/Facebook
Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.
