A Merry online Christmas
Online retailers may have something to "ho, ho, ho" about this Christmas, the time of year when their sales soar.
The handful of sites that have managed to survive the great dot-com shakedown that continues to rumble across the Internet expect to see higher revenues during the last quarter of the year, generated mainly by sales of books and CDs bought as holiday gifts.
While most online retailers anticipate increases in sales approaching 40% during the holiday season, some market watchers predict lower numbers. Krzysztof Modzelewski, chief executive of Emerging Analysis, owner of Internet market research firm I-Metria, sees online holiday sales increasing by only 15%-30%. Barriers to online buying are still keeping Poles from spending. According to a recent report by
I-Metria, online shopkeepers said that expensive Internet access, security fears about online transactions and the country's low Internet penetration rate keep many would-be buyers at bay.
Precise revenue figures for online sales are difficult to obtain since Internet stores do not publish any public information about their revenue, and market research firms must depend upon answers supplied by retailers in questionnaires. Nevertheless, overall online retail sales in 2002 should reach €71 million (zł. 280 million) compared with €62 million (zł. 245 million) in 2001, according to I-Metria.
Whatever their revenue though, online retailers depend upon their holiday income to carry them through the rest of the year.
"The Christmas holidays are the best season for them," said Piotr Czyżewski, research director at Warsaw-based market research firm ARC Rynek i Opinia. "They live for the rest of the year from the money they gain during the Christmas holidays."
But this year online shoppers looking for the latest Anna Maria Jopek CD or Harry Potter book have fewer sites from which to buy, as several online merchants have shut down after being financially drained.
Retail cyberspace shrunk again earlier this year when some big players, including EasyNet, which operated the online sites for EMPiK, Galeria Centrum and Smyk, and the Vendi.pl online shopping mall, as well as some smaller start-ups such as Salon.pl, which purveyed pricey pens and cigars, were knocked out of orbit, leaving behind only a handful of the most popular sites. Other Internet shopping malls, which cannot keep soaring costs under control, are also going downhill.
According to I-Metria, the number of web shops decreased to about 750 during the second quarter of 2002 from 850 during the same period in 2001. Those which have survived did so by managing to nip their operational costs at an early stage by keeping a tight rein on workers' salaries and logistics expenses - the two main killers of online retailers.
Piotr Muranty, sales director of Stereo.pl, which sells mainly CDs and computer games, said that competition was rife when the site opened two years ago, but now there were only three main competitive shops on the online market, including Merlin.pl and Vivid.pl.
Merlin.pl, the country's Amazon.com, will get the lion's share of online Christmas orders, as it does during other months of the year, with about 70% of its sales coming from books. Overall, books account for 25% of the country's total online purchases, with electronic devices accounting for 12%, computer sales 11% and software 10.5%.
Backed by one of the country's largest publishers, Merlin.pl expects to see its Christmas sales increase 40% between October and the end of December compared with sales during the rest of the year, according to Mirosława Puczko, a member of Merlin's board. The firm will earn roughly 10-15% profit on each shipment.
Another site, Vivid.pl, which offers more than 100,000 books, CDs, DVDs and assorted wares, expects to see a 41% revenue increase from October through December compared with the other three quarters of 2002, said Grzegorz Bielicki, the firm's marketing manager.
With such a tight squeeze for customers among the surviving players, all sites offer special holiday promotions and discounts. Merlin.pl, for example, has a 25% discount on best-selling books, while Vivid.pl is trying to lure shoppers with free autographs of famous recording stars and a complimentary Terravita chocolate with each purchase.
The handful of sites that have managed to survive the great dot-com shakedown that continues to rumble across the Internet expect to see higher revenues during the last quarter of the year, generated mainly by sales of books and CDs bought as holiday gifts.
While most online retailers anticipate increases in sales approaching 40% during the holiday season, some market watchers predict lower numbers. Krzysztof Modzelewski, chief executive of Emerging Analysis, owner of Internet market research firm I-Metria, sees online holiday sales increasing by only 15%-30%. Barriers to online buying are still keeping Poles from spending. According to a recent report by
I-Metria, online shopkeepers said that expensive Internet access, security fears about online transactions and the country's low Internet penetration rate keep many would-be buyers at bay.
Precise revenue figures for online sales are difficult to obtain since Internet stores do not publish any public information about their revenue, and market research firms must depend upon answers supplied by retailers in questionnaires. Nevertheless, overall online retail sales in 2002 should reach €71 million (zł. 280 million) compared with €62 million (zł. 245 million) in 2001, according to I-Metria.
Whatever their revenue though, online retailers depend upon their holiday income to carry them through the rest of the year.
"The Christmas holidays are the best season for them," said Piotr Czyżewski, research director at Warsaw-based market research firm ARC Rynek i Opinia. "They live for the rest of the year from the money they gain during the Christmas holidays."
But this year online shoppers looking for the latest Anna Maria Jopek CD or Harry Potter book have fewer sites from which to buy, as several online merchants have shut down after being financially drained.
Retail cyberspace shrunk again earlier this year when some big players, including EasyNet, which operated the online sites for EMPiK, Galeria Centrum and Smyk, and the Vendi.pl online shopping mall, as well as some smaller start-ups such as Salon.pl, which purveyed pricey pens and cigars, were knocked out of orbit, leaving behind only a handful of the most popular sites. Other Internet shopping malls, which cannot keep soaring costs under control, are also going downhill.
According to I-Metria, the number of web shops decreased to about 750 during the second quarter of 2002 from 850 during the same period in 2001. Those which have survived did so by managing to nip their operational costs at an early stage by keeping a tight rein on workers' salaries and logistics expenses - the two main killers of online retailers.
Piotr Muranty, sales director of Stereo.pl, which sells mainly CDs and computer games, said that competition was rife when the site opened two years ago, but now there were only three main competitive shops on the online market, including Merlin.pl and Vivid.pl.
Merlin.pl, the country's Amazon.com, will get the lion's share of online Christmas orders, as it does during other months of the year, with about 70% of its sales coming from books. Overall, books account for 25% of the country's total online purchases, with electronic devices accounting for 12%, computer sales 11% and software 10.5%.
Backed by one of the country's largest publishers, Merlin.pl expects to see its Christmas sales increase 40% between October and the end of December compared with sales during the rest of the year, according to Mirosława Puczko, a member of Merlin's board. The firm will earn roughly 10-15% profit on each shipment.
Another site, Vivid.pl, which offers more than 100,000 books, CDs, DVDs and assorted wares, expects to see a 41% revenue increase from October through December compared with the other three quarters of 2002, said Grzegorz Bielicki, the firm's marketing manager.
With such a tight squeeze for customers among the surviving players, all sites offer special holiday promotions and discounts. Merlin.pl, for example, has a 25% discount on best-selling books, while Vivid.pl is trying to lure shoppers with free autographs of famous recording stars and a complimentary Terravita chocolate with each purchase.
