The leading player in Poland’s e-commerce market, Allegro, has recorded a net profit jump of almost 60%, largely thanks to its subscriber service, according to its freshly announced second quarter results.
The company has recently started building its own parcel locker network, and is now plotting international expansion through the launch of an English-language version of its online marketplace and more exports to the rest of the European Union.
Allegro Group, whose listing on the Warsaw Stock Exchange last October was one of Europe’s biggest initial public offerings in 2020, recorded a net profit of almost 296 million zloty (€65 million) in Q2 of 2021. That was 60% higher than in the same period last year and beat the 286 million zloty forecast by analysts.
Revenue increased to 1.3 billion zloty (€285 million) in that period, up 28.4% year-on-year. That was largely driven by the company’s SMART! programme offering free delivery for subscribers, as well as its advertising business, which has been the fastest-growing element of operations.
Francois Nuyts, Allegro’s CEO, said the growth was “exceptional” when compared with the second quarter of last year, which was already a “period of sharp growth” due to the pandemic pushing shoppers online, reports financial news service Bankier.pl.
Allegro, which was founded and remains headquartered in Poznań but is owned by three international investment funds, now has 13.2 million active buyers, up 7.2% relative to last year. The number of offers in its marketplace has increased by 50% year-on-year. The company employs 3,750 people and is currently recruiting for 950 additional positions.
Allegro has also announced that it is looking to launch an English-language version of its platform, as well as to expand international sales from its Polish platform. The company said it had signed a deal to help merchants ship to other EU countries.
The firm had previously announced that it would also be entering the parcel locker market, dominated by another home-grown company, InPost, which has been its provider so far. Allegro confirmed that its plans to set up 1,500 of its own lockers by the end of 2021 were on track.
It also hopes to boost profits with new services, including Allegro Fulfillment and Allegro Pay.
Like many e-commerce giants, Allegro initially received a boost during the pandemic as people started shopping more online. However, it has also had to tackle pandemic-related restrictions and faced increased competition from the Polish market entry of Amazon in March this year.
Amazon already has an extensive infrastructure of fulfilment centres across Poland, as well as the Amazon Technology Development Center in Gdańsk and the Amazon Web Services branch in Warsaw.
Ahead of its Polish launch, Amazon signed a five-year agreement to use InPost’s delivery services – both couriers and lockers – in Poland.
Main image credit: Klapi/Wikimedia Commons (under CC BY 4.0)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
