Polish e-commerce platform Allegro increases expansion after winning

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The Allegro website is shown in this image as of October 12, 2020. REUTERS / Dado Ruvic / Illustration / File Photo

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Aug 5 (Reuters) – Polish e-commerce platform Allegro is pushing expansion plans and building its own parcel locker network, the CFO said after second quarter results exceeded forecasts.

Founded as a domestic rival to eBay (EBAY.O) more than 20 years ago, Allegro saw sales surge last year as the pandemic accelerated the transition to online shopping and consumers relied on e-commerce for their everyday needs.

Net income for the second quarter rose 59.9% to 295.9 million zlotys ($ 77.2 million), surpassing the 286 million zloty analysts had expected, despite the easing of pandemic restrictions and increased competition.

“The (expansion) strategy has several elements. The first is organic. We want to be able to export from the Polish website. We are also working on making the English version of the website available. These projects are progressing.” CFO Jon Eastick said in an interview with Reuters.

He said Allegro had signed a contract to offer dealerships to ship to countries in the European Union, but added that there was nothing specific about possible mergers and acquisitions.

Eastick added that the 1,500 parcel locker rollout planned for this year has got off to a good start. The first deliveries are planned for autumn.

Allegro’s dominant position in Poland will be put to the test after the entry of the online retail group Amazon (AMZN.O) and other companies that build their own parcel machines.

However, Eastick said the company saw limited influence from Amazon.

“Since the economy reopened in May, there has generally been more competition from the market, but it is not the new entrants that are causing it, it is the incumbent players battling for market share.”

Allegro improved conditions for buyers and third-party sellers during the COVID-19 pandemic as more consumers switched online. It’s SMART! Subscription program contributed to quarterly sales increasing 28.4% to PLN 1.31 billion.

The company generates most of its revenue through its marketplace, but its advertising business has grown the fastest, increasing 39.5% year over year to 32.1 million zlotys

In addition, the company expects to increase sales with new offerings, including a network and logistics service for sellers, Allegro Fulfillment and the payment service Allegro Pay.

The company, whose website attracts 21 million visitors a month, confirmed its outlook for 2021.

($ 1 = 3.8342 zlotys)

Reporting by Anna Pruchnicka; Editing by Kim Coghill, Amy Caren Daniel and Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.

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