Pole position for e-commerce

One of the largest economies in Central Europe in terms of population, physical size and output, Poland presents attractive prospects to exporters, particularly in e-commerce.

This sector was in focus at a 27 July webinar entitled “The E-Commerce Route into Poland”, organised by the Research Department of the Hong Kong Trade Development Council (HKTDC).

Healthy performance

Poland has a gross domestic product (GDP) of US$595.9 billion in 2019 for a nominal $15,693 per capita, with external trade valued at 106.2% of GDP.

The economy has a relatively large 28.83% of its value in industry, against 2.15% in agriculture and 56.9% in services. The 38 million-strong population has a median age of 41.7 years. One of the country’s main challenges is a tight labour market, which nevertheless has the upside of encouraging pay rises and bodes well for individual consumption going forward.

Not immune to the COVID-19 pandemic, the nation’s economy shrank 2.5% last year, its first decline since 1991, according to HKTDC Assistant Principal Economist (Global Research) Louis Chan. That, however, was a mild decline by European standards, with the euro zone shrinking 6.5%.

The Polish economy is ready for a strong comeback with government support for companies and low interest rates, said Mr Chan.

E-commerce

Among the country’s most vibrant sectors is e-commerce, led by such brands as Allegro, which lays claims to being the most popular online shopping platform in Poland and one of the largest e-commerce websites in Europe. It operates on the marketplace model, hosting 125,000 merchants from whom buyers can source whatever they need.

Zoltan Farkas, Education and Merchant Development Partner at Allegro, said the 21-year-old platform had initially served just Polish merchants but two years ago started inviting international merchants to market their goods on the platform.

He said the site had 21 million Polish users, of which 13 million are active buyers. Users carry out 1.5 billion searches a month on the platform, which stocks items in 14 categories. Overseas sellers can list items in all categories.

The largest categories are home and garden, electronics and vehicle products, Mr Farkas said. Supermarket, health and beauty were the fastest growing.

From a buyer perspective, pricing selection is key, he said. Allegro charges commission as low as 0.5% if a seller has attractive products. Allegro retains customers through its Smart! loyalty programmes.

Allegro has a fee calculator for commissions and they range between 2% and 15%. Merchants can also subscribe for additional options such as promotional tools to boost listings.

Basic promotion tools include feature highlights. Sellers with high buyer ratings can win a super-seller badge and buyers are drawn to super sellers, he said.

For sellers, there are no listing fees in most categories. Fee-charging categories apply mostly to categories that appeal to domestic sellers such as vehicles.

Nevertheless, Allegro charges commission with a wide range of promotion tools for merchants. Mr Farkas said Poles tended to steer clear of overseas e-commerce sites, making the platform a good way for international sellers to reach out to Polish consumers.

Smart! loyalty

Allegro introduced Smart! loyalty in 2018, offering free delivery and returns for subscribers charged just US$15 a year. Sellers gain loyal customers because members buy two and a half times more. Business growth can be as much as five times faster than for sellers outside Allegro Smart!.

Allegro has been introduced in neighbouring countries Germany and the Czech Republic.

Mr Farkas said overseas buyers can register with identification (ID) documents and business papers, such as value-added tax (VAT) certification, that can be in English or Chinese. Copies must be photos, not scans, and documents no older than four months.

The platform yields pages of products from different sellers in response to queries. Mr Farkas said it was important for merchants to position themselves well by filling in all the parameters thoroughly – higher quality increases visits. Allegro promotes listings that draw many positive reviews.

Allegro does not carry out order fulfilment, Mr Farkas said. Sellers need to take care of delivery but the platform does have a service-provider network putting sellers in touch with logistics firms.

Merchants can use an Excel or CSV file to upload as many as 10,000 offers simultaneously, Mr Farkas said. There is an application programming interface connection for uploading offers in bulk. All offers should be in Polish and the service provider network includes translators. Many sellers use translation tools and were doing quite well, so is another possible solution.

Access to Europe

Merchants can manage orders through the website. Payments are made in the national currency, the zloty (PLN), using PayU, a payment gateway enabling businesses to accept online payments. Payouts can also be made through other payment gateways such as LianLian Pay, Payoneer or PingPong.

Sellers can also attend the Allegro Academy help centre, which is free and requires no registration for obtaining information on selling, conflict resolution, and more.

Allegro has a welcome programme for new merchants from Hong Kong, offering commission rebates as well as free promotion deals that automatically place them high on the merchant list.

Jakub Kolodynski, Senior Business Development Partner at Allegro, said the platform was a good starting point for merchants venturing into Europe for the first time since registration is easy. The system for submitting offers was also rated as easy and it was a good way to find Eastern European customers, he said.

Merchants using warehouses in Poland, the Czech Republic or Germany  could also enjoy a free delivery service, he added. Allegro was looking at expanding beyond these countries.

Brand establishment

Mr Farkas said overseas brands establishing themselves in Poland can promote on Allegro and also through such platforms as Facebook and Google as well as broadcast media outlets.

Branding was important in Poland, and brand names in roman letters or in Polish would be a big plus. He said Chinese brands had a good reputation in Poland because suppliers were seen as helpful.

One webinar attendee noted that Poland is surrounded by other emerging markets such as Belarus, Ukraine and Czech Republic. Could Hong Kong exporters use Poland and Allegro as a base to explore these countries even though languages are different?

Mr Farkas said exporters could use Poland or Allegro as a base to expand east to Belarus, Ukraine and other countries. The platform is Polish but in the 21st century buyers come from all over Europe and even the world, with Ukrainians noted to be especially keen buyers. Allegro intends to become more visible in neighbouring markets, he said.

When choosing to fulfil orders through air, sea, or rail freight, Mr Farkas said merchants needed to consider many factors such as the kind of goods on offer and the sales volume. Those supplying high volumes should use warehousing in Poland but many international sellers dispatch directly from their production centres such as Mainland China. Exporters use mostly rail or sea since these are the cheapest. If buyers cover costs, merchants could consider using airfreight.

Asked about sales of food, dietary supplements and traditional Chinese medicine, Mr Farkas said Allegro does carry food items but suppliers, especially those from overseas, needed to consider Allegro’s list of forbidden items, such as certain food components. Supermarkets was the fastest-growing merchant category but a key problem was transport time for perishable items, he advised.

Related links
HKTDC Research – Poland
Full webinar