Allegro's development abroad is slow. There are a lot of customers, but they spend a fraction of what they spend in Poland [ANALIZA]
Foreign e-commerce platforms have a hard life trying to conquer Poland, because they have to break through the well-established Allegro here, but at the same time Allegro also has a hard life in other countries, trying to carve out a piece of the market and start making money from it. The latest data from the Polish sales website registered in Luxembourg show that there is still a long way to profitability in the Czech Republic, Slovakia and Hungary.
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Of the 21.1 million platform users in four countries, 15.2 million (+2% y/y) live in Poland, and 5.8 million (+5.3% y/y) are residents of other countries. The problem is that while Poles leave a lot of money in stores on the platform, Czechs, Hungarians and Slovaks are much more cautious about it or… they do not yet have such an extensive offer.
Only PLN 180 per month
Despite the increase in the number of customers by 5.3% during the year. abroad, that the total value of transactions carried out via the portal decreased there by 3.3%. In the third quarter, the expenditure per customer was only PLN 539 (PLN 180 per month), i.e by as much as 15.4 percent less year to year. For comparison the average spending of a Polish website user increased by 7.9%. y/y to PLN 4,262, i.e. PLN 1,420 per month.
Combining this with data on the number of items sold indicates that cheaper goods have started to be sold abroad via Allegro than a year ago. With a decline in total sales value the number of goods sold increased by as much as 37.9%. rdr up to 10.2 million. This does not mean that more expensive things are sold in Poland, on the contrary – they simply started from a high level and now the level is lowering.
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The average value of a single operation in the third quarter was PLN 72 abroad, while in Poland it was PLN 46. It can be said that the situation in foreign entities is normalizing and heading towards the Polish “standard”.
Lower Allegro commissions in the Czech Republic, Slovakia and Hungary
Allegro clearly wants to attract as many sellers as possible to the platform, because it charges much lower commissions from them than from Polish ones. In Poland, in the third quarter, the website downloaded on average 12.98 percent on the value of the transaction, while abroad only 7.67 percent What's more, in Poland the commission increased by 0.47 percentage points year on year. and outside Poland it decreased by 0.57 percentage points.
However, they are included in the price of Polish transactions delivery costs via Allegro parcel machines, which amounted to PLN 834 million in the third quarteri.e. by 28.5 percent. more y/y with only PLN 82 million of logistics revenues (+140% y/y). While in Poland Allegro contributed PLN 834 million to transport between July and September, it only contributed PLN 39 million abroad.
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Although there are many customers abroad, the value and number of transactions they carry out cause Allegro to generate losses abroad, which it compensates for in Poland. EBITDA (operating result plus depreciation) in the third quarter from foreign operations was negative and amounted to PLN 123.8 million, which is still a result of 16%. better year to year, while the profit of the Polish branch amounted to PLN 1 billion 35 million and was higher by 17.2%. year to year. In total, this resulted in an EBITDA increase of 24%. y/y in the third quarter to PLN 911 million.
IT costs are incurred almost exclusively in Poland, i.e. only 1/10 of the expenses are outside the country. And this is, for the time being, the “economy of scale” that Allegro is realizing abroad. The only question now is to expand the offer and thus encourage our southern neighbors to increase their spending.
