Allegro.pl expects further growth
The service has seen its turnover nearly double on an annual basis and plans to spend heavily on infrastructure.
After recording trade totaling zł.370 million in 2003, which represents more than 12 percent of Poland's total e-commerce market, or nearly twice the zł.200 million recorded in 2002, allegro.pl expects to continue to enjoy near-monopoly status on the market segment of all-purpose Internet auctions.
According to Artur Brzęczkowski, allegro.pl sales and marketing director, the barriers to entering the local market are naturally high, while foreign services, such as eBay, only offer a limited alternative. The costs of sending purchased products from the USA are high, he says, while payments can also cause problems. Anecdotal evidence from eBay's locally based users would suggest otherwise, but they do confirm another problem cited by Brzęczkowski: that tax on items worth more than zł.380 (E80) can be prohibitively high.
The only blot on the otherwise bright landscape of the firm's future is the legal challenge from UK based company QXL Ricardo, which currently controls eight percent of the portal's stock. The company claims that the purchase of a controlling stake by local firm NAII was illegal and that the case is awaiting court proceedings. The dispute, says Brzęczkowski, "has not yet disrupted" the portal's operations.
Allegro.pl currently has 1.34 million registered users and expects the figure to grow, as the current customer base of six to seven million Internet users is bound to increase in size. Brzęczkowski also claims that skeptics, who expected Internet auctions to do less well as the economy returns to high growth, thus diminishing incentives to seek the cheapest deals, "have been proven wrong. Rather than being an anti-cyclical business, Internet auctions have proved to be a-cyclical, as the example of eBay shows."
Last year allegro.pl acquired leading Czech auction portal aukro.cz, and plans to splash out on marketing across the southern border this year, in addition to investing in infrastructure and new services. These include used-car auction motoAllegro, which was launched last year and has recorded around 350 sales a month, as well as planned new features, allowing users to integrate the platform with their own software for the purposes of accounting, for example. The company has so far financed its expansion from equity without taking on much debt. How long this model of self-financing will serve the expanding business remains to be seen.
After recording trade totaling zł.370 million in 2003, which represents more than 12 percent of Poland's total e-commerce market, or nearly twice the zł.200 million recorded in 2002, allegro.pl expects to continue to enjoy near-monopoly status on the market segment of all-purpose Internet auctions.
According to Artur Brzęczkowski, allegro.pl sales and marketing director, the barriers to entering the local market are naturally high, while foreign services, such as eBay, only offer a limited alternative. The costs of sending purchased products from the USA are high, he says, while payments can also cause problems. Anecdotal evidence from eBay's locally based users would suggest otherwise, but they do confirm another problem cited by Brzęczkowski: that tax on items worth more than zł.380 (E80) can be prohibitively high.
The only blot on the otherwise bright landscape of the firm's future is the legal challenge from UK based company QXL Ricardo, which currently controls eight percent of the portal's stock. The company claims that the purchase of a controlling stake by local firm NAII was illegal and that the case is awaiting court proceedings. The dispute, says Brzęczkowski, "has not yet disrupted" the portal's operations.
Allegro.pl currently has 1.34 million registered users and expects the figure to grow, as the current customer base of six to seven million Internet users is bound to increase in size. Brzęczkowski also claims that skeptics, who expected Internet auctions to do less well as the economy returns to high growth, thus diminishing incentives to seek the cheapest deals, "have been proven wrong. Rather than being an anti-cyclical business, Internet auctions have proved to be a-cyclical, as the example of eBay shows."
Last year allegro.pl acquired leading Czech auction portal aukro.cz, and plans to splash out on marketing across the southern border this year, in addition to investing in infrastructure and new services. These include used-car auction motoAllegro, which was launched last year and has recorded around 350 sales a month, as well as planned new features, allowing users to integrate the platform with their own software for the purposes of accounting, for example. The company has so far financed its expansion from equity without taking on much debt. How long this model of self-financing will serve the expanding business remains to be seen.
