E-traders test the waters
By : Dolores Cruz
Poland still lags well behind the e-commerce business taking off in Western Europe and the United States.
New figures released by Internet research company International Data Corp. (IDC) estimate that in 2001 Polish e-shoppers could spend up to $45 million, buying everything from CDs and books to office materials and groceries. Last year, they spent just $9.5 million. Apparently, this e-shopping frenzy will be even stronger in the business-to-business sector, with IDC estimating sales revenue increasing 1,208% to $266 million in 2001.
But according to Andrzej Jarosz, IDC's research manager for Central Europe, these figures are small change compared to other European markets. IDC calculates that e-commerce revenue in 2000 accounted for 0.02% of Poland's GDP. In Portugal, that percentage was 0.07%, Austria 0.25% and in Germany 0.25%.
"The main reason we predict such huge growth this year is that Polish e-commerce business really just started in 2000," Jarosz said. "This year, we think the number of Internet users will grow due to the growth of PCs in households."
About 9% of Poland's population (or 4 million people) use the Internet at least once every three months. By the close of 2001, IDC anticipates that number will grow to 4.6 million people. Jarosz said Poland still has one of the lowest Internet penetration rates compared to European Union (EU) countries. This is mainly due to the relatively high cost of PCs and Internet access in Poland.
But what all these figures fail to reveal are the shifting sands on which Polish e-retailers are building their e-businesses. IDC estimates there are about 580 Polish e-commerce sites, but less than 30 of these generated more than $100,000 in revenue last year.
"And the quality of service offered by a lot of these e-commerce sites can be low and long term this can be an inhibitor," Jarosz said. "If customers are not happy with the service they get, they won't continue to buy."
Another Polish Internet market research firm, I-Metria, came up with similar results.
I-Metria's latest figures estimate there are 800 Polish e-stores on the Internet, but a large portion of them are "not functional." They also tend to be small operators existing in a highly fragmented market. The majority of them use their own "internally developed e-commerce technology," and only 32.2% of them are selling products online at prices lower than in retail outlets. In fact, 1.7% sell products online at higher prices than in the shops.
Books and press are still the biggest sellers, but during the first six months of 2000 the percentage of stores offering them dropped by 4%. Also, the number of e-stores selling computer and software assortments has fallen from 22.2% and 23.6% to 16.4% and 15.7% respectively.
"What we haven't yet seen in Poland is the phenomenon that happened in the U.S. where many e-commerce players started to be well capitalized," said I-Metria CEO and founder Christopher Modzelewski. As a result, many of these e-shops either fold or continue to operate in a sporadic fashion, or what Modzelewski calls "mom and pop e-shops."
"But what's more important is we found that people in Poland generally have a positive outlook about e-commerce both from the user's point of view as well as from the store's." I-Metria found the biggest concern among e-shoppers is online security of personal details and credit cards.
One development has been the boom in horizontal aggregators, which have helped alleviate the problem of Poland's fragmented e-commerce market. "A horizontal aggregator doesn't try to be an e-store itself. What it tries to do is connect a lot of other small stores and aggregate them into an American-style mall," Modzelewski said.
One example is the variety of shopping sites on some of Poland's bigger portals. Onet has its "Internetowy Pasaz Handlowy" and Wirtualna Polska has its "Wirtualny Sklep" both provide links to e-shopping sites selling everything from DVDs to underwear.
"What direction Poland will go is something only time will tell," Modzelewski said. "Whether it will be toward more horizontal aggregators, or if it will be more toward an influx of venture capitalist money or private money funding larger e-commerce players."
Is e-shopping easier?
For shoppers it can be a cyber jungle out there, so we sent Dolores Cruz on a virtual adventure to try out some of Poland's more popular e-commerce sites.
www.empik.com
Claiming to be the largest Internet shop in Poland with more than 100,000 products for sale online, www.empik.com is colorful and easy-to-use rather like its brick-and-mortar stores.
Clear icons make it easy to browse through the CDs, books, videos, photo accessories, etc. There's a search option to find what you're after. Or if you encounter any problems, try their e-mail address or helpline from 9 a.m.-9 p.m.
Credit cards are accepted, and despite the Web site assurance that it uses the latest data security technology, it's disturbing to read a disclaimer saying "this information can be processed and made available to other entities for marketing purposes, in line with the requirements of the Personal Data Protection Act."
A cash-on-delivery option is also available. Pay a courier fee of zl. 19.90 to have your shopping delivered to your home or office, or get it sent to the local post office (a charge of zl. 8.50). The site advises that postal delivery "should be" within two weeks. You can also collect the item at your nearest Empik store, incurring no delivery charge.
We decided to buy a CD the new Massive Attack album "Mezzanine" for zl. 59.99, easily found in the search option. We asked for courier delivery and also posted a query that was replied to in about four hours. They sent us a confirmation e-mail the following day that our order was being processed.
There is no on-screen faktura VAT option. Instead, you have to fill in the form that arrives with the goods, and send it back to Empik, taking about seven days.
The CD was ordered Jan. 22 and had still not been delivered by Feb. 7, when the WBJ went to press. It would probably be more convenient (and certainly cheaper) to pop into a local CD store. Total cost and still pending: zl. 79.89.
www.merlin.com.pl
At first glance, this virtual store lacks flashing icons and bright colors, preferring sensible written descriptions and dull hues. But once we got into the site, it was impressive.
Selling more than 80,000 titles, CDs, cassettes, and multimedia goods, www.merlin.com.pl pays attention to detail. In the book department, you can read excerpts from a large number of titles, read reviews and also e-mail them your own review (and be in the running for a weekly prize).
Like Empik, Merlin goes to great lengths to reassure e-shoppers that their credit cards and personal details are safe. But unlike Empik, the site stresses that these details "will be used only to carry out the order."
We bought another copy of Massive Attack's CD "Mezzanine" for zl. 56 (nearly zl. 4 cheaper than Empik's price), and opted for courier delivery at a bargain zl. 15. We promptly received a confirmation e-mail that we had to resend our information for our order to be processed. We filled in an on-screen faktura VAT option, but then also had to go through the rigmarole of printing out a special NIP form from the Web site, fill it in, get it signed by one of the bosses, and then fax it back to them.
Our CD, which had a maximum delivery time of two weeks, arrived just four working days later complete with its faktura VAT. Total cost: zl. 71.
www.buy.pl
This cyber supermarket sells everything from cars (just pop it in your virtual shopping basket) to Austrian ski holidays, homes, artwork as well as your usual items. Grocery stuffs are also for sale and that's what we decided to purchase from www.buy.pl.
Click on a topic food, for example and a series of categories runs down the left-hand side of the page: meat, bakery, drinks, alcohol, etc. A complicated coding system indicates availability and delivery time:
However, delivery can take an additional 14 days beyond the listed time which means you could be waiting up to 30 days for your fruit juice and salami. Or worse still, your Champagne and caviar for that soiree you so carefully planned.
There was also a complicated process of sending confirmation e-mails, and then getting an additional confirmation phonecall.
I'm sorry, but we just didn't have that amount of time to wait around. We took our shopping elsewhere.
