ecommerce poland 2013 report - facts and figures for investors

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Executive Summary Report

eCOMMERCEPOLAND 2013

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eCOMMERCE POLAND 2013

Introduction

Poland is one of the fastest growing eCommerce markets in Europe, quot-ing approximately 25% growth year-on-year. The estimated eCommerce B2C value of goods trade, not including services, in 2013 was more than 6 bn euro. If the current growth rate main-tains, the figure is predicted to rise in two years to nearly 11 bn euro.

According to the Eurostat reports, the eCommerce share in the entire Polish consumer trade is about 4%. Although it is less than in some other European countries, the observed market and economic trends are comparable to mature markets, such as British or Ger-man. At the same time, over 30% of the 38 million population of Poland declare to shop online. This rate is higher than for Spain or Italy.

Thanks to growing access to broad-band Internet, the total number of e-consumers increases every year. Ac-cording to the study of the Concise Statistical Yearbook of Poland in 2013, 70% of Polish households had Inter-net access. The number of credit card holders also increases and online pay-ments successfully ousted the cash-on-delivery methods. Meanwhile, there is a gap in the Polish market to be fulfilled by the courier companies, for which the coming years are also predicted to gen-erate double-figure increases.

At present, there are over 12 thousand online shops in Poland. The market continuously matures, as evidenced by the decreasing growth rate of e-shops. However, within many industries, we cannot conclude that the market is sat-urated. This fact is clearly visible in the food sector, which in recent years has been developing most rapidly. Since 2007, the number of online stores in this sector has been growing by approxi-mately 35% each year. It is estimated

that in two years, the e-FMCG will reach the value of more than 107 mln euro. This represents twice the level of cur-rent figures. These trends seem to have caught the attention of western giants, such as Tesco, Auchan or Leclerc, which have already enabled Poles to buy their products online.

The potential of the Polish market has also been recognized by the popular shops of other sectors, such as West Wing or Conrad as well as leaders of the clothing industry - Otto or Zalan-do. Another example of the successful business expansion to the Polish eCom-merce market are companies providing services for online shops, such as Trust-ed Shops or Sofort Banking. Recently, Amazon, the biggest online shop in the world, has decided to build its logistic centres in Poland.

Apart from the huge potential gains emerging from the growing popularity of online shopping in Poland, there are many other important factors influenc-ing overseas investors. They point to good office and communication infra-structure as well as to visible potential of the labor market and access to mul-tilingual specialists. Despite the global crisis, the economic situation in Poland has been assessed as stable, while lo-calization of the country opens the way for further expansion to the Eastern Eu-ropean markets and Russia.

I am convinced that all of the above mentioned factors create an ideal space for investment activities and encour-age forward thinking companies to enter into the game right now because the biggest and brightest opportuni-ties for prosperity in the Polish eCom-merce market are just ahead of us. This report is an executive summary of our multi-year study and presents the key aspects of Polish eCommerce. I hope it

will shed light on lucrative business op-portunities and help you to asses your organizations potential for entering this market.

Piotr Jarosz, CEO of Dotcom RiverExecutive Editor of the eCommerce Poland 2013 Report

3.

Sources:

Eurostat, European Commission, http://epp.eurostat.ec.europa.eu;Centre of Retail Research, http://retailresearch.org;

PMR Research, http://research-pmr.com;Polish Ministry of Treasury, http://msp.gov.pl

Research and analysis See full report on:

38,5 mln

26,2 mln

12,6 mln

Population

Internet users

Online shoppers

12 000 +Online shops

100%

68%

48%

0

20

40

60

80

100

0

20

40

60

80

100

54%

25%

smartphoneusers

social mediausers

Total e-retailvalue 6 bn

European customersshopping online

> 50%

30 - 50%

< 30%

POLANDGERMANY

SWEDEN

UK

FRANCE

SPAIN

8,7%8,7%8,7%8,7%

NORWEY

4,1% ITALY

6,2%

10%

8%8%8%8%

13,2%13,2%13,2%13,2%

9,1%9,1%

3,8%3,8%3,8%3,8%

%Online share of total retail trade


Key Data at a Glance

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Contents

Introduction .....................................................................................................................................3Contents ............................................................................................................................................51. Polish eCustomer......................................................................................................................6Investor’s voice - Trusted Shops ................................................................................................92. Market size and structure ................................................................................................... 113. Online shops marketing and advertising ..................................................................... 164. Transactions and payments ............................................................................................... 22Investor’s voice - SOFORT AG .................................................................................................. 265. Inventory management and logistics ............................................................................ 286. Shopping cart software ...................................................................................................... 29About the Editor .......................................................................................................................... 32Sources ............................................................................................................................................ 32

5.


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There are 38,5 mln people in Poland. In terms of population it places the country on the 6th position within the European Union. Among individuals ranging from 16-74 years old, as many as 62% are Internet users and nearly half of them (48%) surf the web in or-der to find information about products and services, while 21% shop online. According to the data published by the Concise Statistical Yearbook of Poland in 2013, about 70% of Polish house-holds are equipped with computers and Internet access.

Online shopping in Poland is very com-mon. Less than 16% of Internet us-ers we surveyed declared not having bought on the web at all.

Online consumers with the most exten-sive shopping experience belong to the highest populated age group of 31-50 years old. Older Internet users, who are over 65, represent the smallest group of online consumers, where 41% of them still have not purchased anything from the web. These encouraging statistics show that one in every 5 users over the age of 65 made an online purchase at least once during the last year.

Almost every third Pole buys on the Internet several times a month, and more than half of them - a few times a

year. Less than 4% of eConsumers did not buy anything via Internet in 2010. About 9% of Internet users buy very rarely - once a year.

Salaries of Polish internet users directly correlate with the respective frequency of online shopping. More than 38% of Internet shoppers, earning over EUR

1,185 (PLN 5,000 ) buy online at least a few times per month. Meanwhile, among those who earn less than EUR 474 (PLN 2,000), one in every 4 shop-pers keep pace at the same frequency.

1. Polish eCustomer

1.1. eCustomers experience

Most Polish eConsumers have more than 3 years of

shopping experience.

Figure 1.1. Experience in online shopping

18,6%

27,6%38,2%

15,6%

less than 1 year1 - 3 yearsmore than 3 yearsnever

Figure 1.2. Frequency of online shopping

30,0%

57,4%

8,7%

3,9%

on average, at least a few times per monthin total, a few times during the year

one time during the last year

have not done shopping online this year yet

Figure 1.3. Experience in online shopping in different age groups

0 20 40 60 80 100

less than 18 yrs

18-30 yrs

31-50 yrs

51-65 yrs

more than 65 yrs

29,6

17,9

17,7

17,6

20,2

25,1

30,0

28,0

27,3

11,8

15,4

37,8

42,8

39,5

27,2

29,9

14,2

11,5

15,6

40,8

less than 1 year1 - 3 yearsmore than 3 yearsnever

[%]

1.2. Online shopping frequency

6.6.


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Figure 1.4. Frequency of online shopping with respect to the respondents monthly income

0 20 40 60 80 100

less than 2.000 PLN (475 EUR)

2.000-5.000 PLN (475 - 1187 EUR)

more than 5.000 PLN (1187 EUR)

25,2

31,7

38,2

59,9

58,8

45,2

9,9

7,1

10,7

5,0

5,8

on average, at least a few times per month

in total, a few times during the year

one time during the last year

have not done shopping online this year yet

[%]

Figure 1.5. Motivations for buying online with regard to the gender of respondents

0 10 20 30 40 50 60

it’s convenient and saves time

I tend to buy impulsively, if there is something I like

I like to compare many products before I make a purchase

it’s the only way to access products that I need

prices are more attractive than in traditional stores

other reasons

50,3

11,7

32,9

18,3

45,3

2,9

44,7

8,9

35,5

17,0

43,7

3,1

woman man

[%]

7.7.


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Figure 1.6. Arguments that could persuade Polish e-consumers of different age groups to buy online more often

0 10 20 30 40 50 60 70

lower prices

quicker delivery time

money-back guarantee provided by a trusted institution

wider selections available through online shops

simplified procedures of online shopping

greater certainty about the security of my personal data

gaining a greater understanding of the online experience and process

more frequent/ better Internet access

*other

50,9

30,7

22,4

36,8

14,1

14,4

13,4

12,3

4,0

57,9

33,1

32,9

42,3

16,9

21,1

11,8

10,2

3,8

51,2

22,1

25,2

38,4

16,1

15,5

11,2

7,8

3,5

44,7

14,8

18,4

35,1

18,2

12,7

12,7

8,2

4,0

31,8

18,2

10,6

26,5

18,2

10,0

15,3

9,4

6,5

less than 18 18-30 31-50 51-65 more than 65 [yrs old]

[%]

*The most prevalent concerns voiced by respondents were: lower delivery costs or a lack of delivery fee, wider product range, a need for more specific information about products and an easier way of finding a desired product.

8.

Partners


Why did Trusted Shops decide to en-ter the Polish eCommerce market?

With a population of over 38 mln and as many as 18 mln internet users, Po-land is an attractive market with huge potential still to be unlocked. In fact, in recent years Poland has had one of the highest growth rates in the eCom-merce sector among all EU countries. At the same time Poles demonstrate a very low level of trust, which makes them reluctant to do online shopping. We identified this challenge and have decided to address it by equipping shop owners with solutions that help to build consumer trust.

What were the main obstacles you had to face while entering the Polish market and how long did the prepa-ration take?

At the initial stage, the biggest hurdle was to compile a knowledge base that would enable us to specify Polish crite-ria for the audit – our core product. The Trusted Shops quality criteria are based on national and European laws that are important for making purchases on the Internet. Our experts had to make sure they comply with Polish regulations. It took us almost one year to establish our operations in Poland, as we wanted to ensure the highest quality of service. We also prepared the ground for coop-eration with organisations and associa-tions in the Polish eCommerce sector.

What was the biggest surprise after launching your services in Poland, comparing to the native German

TRUSTED SHOPS IN POLAND - ENTERED THE MARKET AT THE RIGHT TIME

Investor’s voiceTrusted Shops about the Polish branch

Founded in 1999, the Cologne based company is Europe’s market leader for the accreditation of online shops. Since the company was founded, over 17 000 retailers have been accredited. At present, Trusted Shops has operated, inter alia, in Germany, Austria, Switzer-land, France, Belgium, Spain, Italy, Great Britain and in Poland since 2010.

We talked with Anna Rak, the Country Manager of Trusted Shops in Poland, about the entry of the German established company into the Polish market in 2010.

market?

What struck us most when we launched in Poland was finding out how low the level of trust was. While signing con-tracts with us, Polish online retailers would engage their lawyers and care-fully analyse every single page looking for fine print. This accurately illustrates the typical attitude towards people or business partners that Poles cooper-ate with for the first time. However, it’s interesting to work with people who combine passion and diligence at the same time. Likewise, the eCommerce sector in Poland is still young and dy-namic and it keeps surprising us even today.

What, in your opinion, is the key to success on the Polish market?

Our experience shows that an in-depth understanding of the Polish market is essential for foreign companies that plan to extend their operations to Po-land. As a new player on the market you need to identify your target cus-tomers and challenges they face. This requires communication since it’s im-portant for both parties to speak the same language. Establishing a good rapport with customers is key to pro-viding excellent service and helps turn them into brand evangelists. We should not underestimate the word-of-mouth, especially in some industries.

With hindsight, was it a good deci-sion to enter the Polish market and was the decision made at the right time?

We believe that we launched our ser-vices in Poland just in time to gain momentum before the eCommerce boom started. We have been growing together with the online market. As the Polish eCommerce sector has yet to become fully mature, we observe a great demand for our comprehensive services that help retailers thrive in this favourable climate. One of our chal-lenges now is to catch up with this dy-namic growth.

Many investors, who enter the Polish market, indicate the strategic loca-tion of Poland in Europe as one of the main reasons behind their decision. Was the Trusted Shops’ investment into the Polish branch also a case of taking the first step towards the fur-ther expansion into the Eastern Euro-pean markets?

We are continuing expansion into Eu-rope so that more retailers and cus-tomers can enjoy the benefits of safe and secure online shopping. This sum-mer we launched Trusted Shops trust-mark in the Netherlands, Belgium and Italy. Poland will serve as a hub when we further expand in the Eastern Eu-ropean region but more details will be announced at a later time.

9.9.

Boost your online salesin Poland and the EU with the Trusted Shops buyer protection!

Our independent money-back guarantee helps:

convince customers to buy highly-priced products online instead of treating the store as a mere catalogue

increase basket size by encouraging customers to spend more instead of playing safe with small orders

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Find out more at

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üüü

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2013 was a period of continuation in dynamic growth for Polish eCommerce turnover. Its value is estimated to be about EUR 6,2 bn, which is 21% more than in the previous year (EUR 5,1 bn). In 2012, the growth rate was also dou-ble-digits and was up 23% year after year. The scale of growth is made read-ily evident by referencing the value of Polish eCommerce just 10 years ago, when it amounted to EUR 78,6 mln, i. e. only 1,3% of the current value.

The fast pace of growth in the Polish online market is consistent with global trends within this sector. According to estimates of eMarketer, B2C Internet sales increased by 21,1% in 2012, ex-ceeding the value of USD 1 trillion for the first time in history. Meanwhile, the growth potential of the Asian-Pacific region is projected to propel it into be-coming the world’s leading B2C online sales market, surpassing even North America.

Polish eCommerce is constantly grow-ing, although the growth rate has slowed down in the last years indicat-ing that the process of market matu-ration has begun. Back in 2009, every other Polish online store had been op-erating for less than two years, while in 2012 the beginner shops represent slightly more than a quarter of the total number (29.2%).

The largest decrease in the growth rate among web shops affected the elec-tronics industry and book stores (9%), while the delicatessen (17%) and cloth-

ing (14%) are leaders of the relative increases. This is not surprising in the case of grocery stores. Given the struc-ture of Polish consumer spending, mar-ket for these products has the greatest potential and the competition in this industry is relatively low.

Almost half of all shops in Poland is staffed by one person (24.5%) or two people (22.2%), while companies em-ploying more than 50 people repre-sent a narrow margin of retailers (3.3%). Among online shops that have oper-ated less than a year, only 32,5% of firms sell offline, while in the group of retailers having operated more than 10 years, 64,5% possess a land-based store.

2. Market size and structure

2.1. Number and age of online shops

The largest increase in the number of new online stores in Poland in recent years was reported in the

food industry.

2.2. Employment and market area

85% of Polish online shops are micro-enterprises.

Figure 2.1. Number of online stores in 2006-2012

0 2000 4000 6000 8000 10000 12000 14000

2006

2007

2008

2009

2010

2011

2012

2 762

4 230

5 841

7 576

9 289

10 814

12 117

[quantity]

Figure 2.2. Age of online stores

12,7%

16,5%

18,3%24,2%

23,2%

5,1%

less than 1 year1 - 2 years2 - 3 years3 - 5 years5 - 10 yearsmore than 10 years

11.11.


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Figure 2.3. Number of shops in different retail sectors

0 500 1000 1500 2000 2500

Automotive

Delicatessen

House and Garden

Goods for Children

Photo and RTV-AGD

Hobby

Computer

Books and Multimedia

Clothing

Presents and Accessories

Sport and Tourism

Health and Beauty

643

331

2 491

984

932

602

977

566

1 278

1 312

856

1 145

[quantity]

Figure 2.4. Does your company also sell offline?

46,0%54,0%

yes no

Figure 2.5. Number of employees in companies running online shops

0 5 10 15 20 25 30

one person

2 people

3-5 people

6-10 people

11-20 people

21-50 people

over 50 people

24,5

22,2

26,7

11,5

7,4

4,3

3,3

[%]

Figure 2.6. Having a brick and mortar shop, depending on the business age

0 20 40 60 80 100

less than 1 year

1 -3 years

3 - 10 years

more than 10 years

32,5

39,3

52,4

64,5

67,5

60,7

47,6

35,5

yes no

[%]

12.12.


Partners


Almost all Polish online stores (99,8%) operate within the national market. Every third Polish seller we surveyed (33,1%) is willing to accept orders from countries belonging to the European Union, while only every tenth (9,6%)

would reach for clients from the rest of the European countries.

This is due to the fact that unfortu-nately, many companies are not able to overcome the major barriers of cross-border e-commerce, which are mainly time and cost of international trans-port. In addition to logistics, the other obstacles are language differences, dif-ferent currencies, taxes, additional de-mands of search engine optimization and marketing, and last but not least, the challenge of gaining the trust of the foreign client.

The average basket value in Poland is EUR 62 (PLN 260). Average basket val-ues are reflected in the shop’s total in-come, however, the profitability of the shops depends heavily on the trade margins that they negotiate.

Business sectors that reach the high-est trade margins in Poland are gifts and accessories (26%) and clothing (25,8%), while the toughest competi-

2.3. Polish cross-border eCommerce

Only every third of Polish shops sells products in

other EU countries.

2.4. Average basket value and gross margin

Figure 2.7. Sales coverage of Polish online stores in EU and other countries

0 25 50 75 100

in Poland

European Union countries

European countries from outside of the EU

other countries

99,8

33,1

9,6

6,8

[%]

Figure 2.8. Average basket value of Polish e-stores

0 5 10 15 20 25 30

less than 5 EUR

5 - 12 EUR

12 - 24 EUR

24 - 36 EUR

36 - 48 EUR

48 - 71 EUR

71 - 119 EUR

119 - 238 EUR

238 - 478 EUR

more than 478 EUR

hard to say

0,5

8,6

24,2

16,5

13,7

13,5

8,7

5,9

4,1

1,6

2,6

[%]

13.


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tion and the lowest margins are associ-ated with computer shops (10,2%) and stores offering photography products and household appliances (13,5%). Ob-viously, we have to keep in mind that these are the average market values and many shops that offer niche prod-ucts, thereby avoiding competition, achieve significantly higher profitability.

Almost two-thirds of Polish retailers re-ported an increase in sales. Compared to 2010, our survey shows an increase in the number of stores with a turnover greater than EUR 11,850 (PLN 50,000) and over EUR 47,401 (PLN 200,000). However, these are relatively minor changes, indicating the structural sta-bilization of the Polish Market. The turnover of online stores has a direct correlation with the profitability of the businesses directly impacting margins for their respective owners. The abso-lute majority of the surveyed retailers (66.2%) achieved gains, while losses were recorded by 14.5% of respon-dents.

As might be expected, mature stores (83.3%) make a profit more often than the small and beginner shops (49.1%), of which nearly one-third (29.1%) are not able to determine whether they will make a profit or a loss.

Average gross margin of Polish online stores is

21.7%.

Figure 2.9. Margin trading of e-stores, depending on their product range

0 10 20 30


Clothing

Delicatessen

Sport and Tourism

Health and Beuty

House and Garden

Hobby

Goods for Children


Automotive

Photo and RTV-AGD

Computer

26,0

25,8

23,2

22,5

22,2

21,4

20,0

19,7

17,8

16,8

13,5

10,2

[%]

2.5. The size and profitability of sales

At least 2/3 of online shops in Poland are profitable.

Figure 2.10. How the sales figures will change this year compared to the previous one

12,4%

13,3%

59,0%

15,3%

decreaseinvariableincreasehard to say

Figure 2.11. Market share of shops hav-ing various sales figures

40,7%

43,6%

15,7%

up to 2 385 EUR2 385 - 23 833 EURmore than 23 833 EUR

14.


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Figure 2.12. Are online retail sales prof-itable?

66,2%

19,3%

14,5%

yes, we achieve profitshard to sayno, we do not achieve profits

Figure 2.13. The probability of profits depending on age, number of employees and sales volume

0 10 20 30 40 50 60 70 80 90

yes, we achieve profits

we do not achieve profits

hard to say

49,1

21,8

29,1

83,3

11,1

5,6

[%]

shops up to 3 years old, employing up to 2 peoplewith a monthly sales value up to 11 917 EUR (50 000 PLN)shops more than 3 years old, employing more than 2 people,with a montly sales value over 11 917 EUR (50 000 PLN)

Table 2.1. The biggest European and Polish eStores, eCommerce turnover in million Euros

Rank in Europe Company Name

eCommerce Turn-over 2012

[Europe only, Mio Euros]Country of origin Main Sector % eCommerce

1 Amazon 16.710 USA All sectors except food 100%

2 Otto 5.700 Germany Fashion 48%

6 Tesco 2.466 UK Food / all sectors 4%

10 Carrefour 1.500 France Food / all sectors 3%

16 Zalando 1.150 Germany Footwear, leather and fashion 100%

24 Dell Inc. 810 USA Consumer electronics n/a

25 Mark & Spencer 804 UK Fashion 6%

43 Conrad 500 Germany Consumer electronics 63%

50 H & M Henner & Mauritz AB 450 Sweden Fashion 2%

55 Ozon 383 Russia Books, Music, electronics 100%

57 Tchibo GmbH 360 Germany All sectors except food n/a

72 C and A 270 Luxembourg Fashion 4%

87 DocMorris N.V. 178 Netherlands Medicines n/a

88 Redcoon GmbH 175 Germany All sectors except food n/a

94 Adidas 158 UK Footwear, leather and fashion 9%

100 Walbusch Walter Busch GmbH & Co. KG

144 Germany Footwear, leather and fashion n/a

Rank in Poland Company Name

eCommerce Turn-over 2011

[Europe only, Mio Euros]Country of origin Main Sector % eCommerce

1 NEO24.PL sp. z o o. 57 Poland Photo n/a

2 Oponeo.pl S.A. 40 Poland Automotive n/a

3 Komputronik S.A. 35 Poland Computers and Electronics n/a

4 Merlin.pl S.A. 35 Poland Books, Music, Games n/a

5 Empik Digital & Publishing 34 Poland Music, Games, eBooks n/a

used exchange rate: 1EUR=4,24 PLN; Source: iBusiness.de

15.


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Importance of service customisation grows in Polish eCommerce, focused on winning niche by delivering services of the highest possible quality, accom-panied by wide product assortment. According to our research, established web stores have well-diversified mar-keting channels and use them efficient-ly. Sales value is strongly dependent on the intensity of marketing activities. The degree to which higher turnover is achieved by a shop is directly reflected in the intensity by which its products are advertised across marketing chan-nels.

According to our research, the two

most popular forms of advertising of eCommerce websites, are presence in online catalogs of shops (over 74% of our interviewees) and Search Engine Marketing (more than 71%). The next quite common marketing method is promotion on social networking sites (62% of stores declared as having ran profiles in social media) as well as hav-ing featured products on price com-parison websites and auction platforms (56 and 52% respectively).

It turns out that price comparison web-sites are almost twice as likely to be used by stores with revenue of over

EUR 23,700 (PLN 100,000) than by the ones with a turnover of less than EUR 2,370 (PLN 10,000). It is similar in the case of SEM (Search Engine Marketing), whereas daily deals websites and e-mail marketing are three times more likely to be used by the sales leaders. Interest-ingly enough, the biggest difference concerns affiliate marketing. It is used as much as six times more frequently-among well-prospering players (16%) than the new ones (only 3%). The only things that the “newbies” do more than the mature vendors are buzz marketing and promotion in online directories.

3. Online shops marketing and advertising

3.1. How do online shops advertise?

Featuring in online directories and SEO are the

most popular marketing forms.

Only slightly more than 1% of online stores do not use

any form of eMarketing.

Figure 3.1. Marketing activities of online stores

0 25 50 75 100

listing in online catalogs of shops

SEO

social media profile

listing on price comparison websites

selling through web auction platforms

SEM

e-mail marketing

buzz marketing

advert on thematic websites

own affiliation program

promotion on daily deals websites

affiliate ads networks

other

we do not perform marketing activities

74,3

71,2

62,8

56,3

52,7

42,8

40,4

31,6

26,0

14,2

11,7

9,4

3,6

1,3

[%]

16.16.



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Figure 3.2. Forms of marketing used by shops with respect to their sales value

0 25 50 75 100


e-mail marketing


SEM

promotion on daily deal websites


44,3

28,1

60,9

32,3

8,1

3,8

59,5

42,5

63,5

44,4

10,7

8,7

82,4

69,2

67,0

65,9

26,4

23,1

monthly turnover up to 10 000 PLN (2 370 EUR)

10 000 - 100 000 PLN (2 370 - 23 700 EUR)

more than 100 000 PLN (23 700 EUR)

[%]

Figure 3.3. Profitability of online sales, by the use of marketing

0 20 40 60 80 100

use marketing activities

do not use marketing activities

66,6

37,5

19,2

25,0

14,2

37,5

yes, we achieve profits hard to say we do not achieve profits

[%]

18.


Partners


Figure 3.4. Forms of marketing used by online shops with respect to their age, employees number and sales volume

0 10 20 30 40 50 60 70 80 90

SEO


e-mail marketing

listing in online shops catalogs


selling through web auction platforms

SEM

advert on thematic website

buzz marketing

promotion on daily deals websites

own affiliation program


other

we do not perform marketing activities

65,5

45,5

22,4

78,2

65,5

47,3

30,3

24,2

34,5

6,7

10,9

3,6

4,2

1,2

79,6

76,9

66,7

65,7

63,9

62,0

61,1

34,3

29,6

22,2

17,6

16,7

1,9

0,0

[%]

shops up to 3 years old, employing up to 2 people with a monthly turnover up to 50 000PLN (11 820 EUR)

shops over 3 years old, employing more than 2 people with a monthly turnover over 50 000 PLN (11 820 EUR)

19.


Partners


Among stores that claim not to perform any kind of marketing activities, only 37% said their stores were profitable. The rest of the shops report losses, or their owners do not know if the stores are profitable (25% of cases).

Polish owners of online shops say that social media does not sell. Only 10% of our responders said direct sale was the main purpose of their social media activity and they represent mostly the smallest firms. The biggest shops, much more often use social networking sites to share information about new offers, competitions or to interact with clients and get to know their opinions.

Nearly 12% of online shops declared promoting their products on daily deals websites. This form of advertising is mostly used by the clothing industry.

Shops offering books, computers or hobby accessories advertise this way very rarely.

Among retailers, who cooperate with daily deals website, 46% choose Grou-pon. The second most favored daily deals portals are Allegro Citeam.pl (cho-sen by 31% of online shops) and Gruper (listed by 24% of answerers).

Price comparison websites are a source of customers for 56% of online stores.

They are also one of the first choices when it comes to eCommerce market-ing strategy, regardless of the store age. Given the popularity of various com-parison sites, Ceneo.pl is leading the Polish market (cooperating with 37.7% of our responders), Nokoaut.pl ranks second (35.9%), followed by Okazje.info (29.8%).

Figure 3.5. Social networking sites popular among online shops

0 25 50 75

Facebook

Twitter

NK (Nasza-Klasa)

Goldenline

Blip

Google+

Grono.net

Flaker

Fotka

other

no account

62,5

8,1

7,6

3,4

2,9

2,6

1,3

1,1

0,0

0,8

37,2

[%]

Figure 3.6. Main goals of social media marketing for online shops

0 25 50 75 100

information about new products

news and company announcements

special promotions / contests for followers

constant contact with clients and knowing their opinion

direct sale through the social account’s profile

other

87,9

62,7

57,0

55,4

10,2

2,6

[%]

Most of the Polish online shops use social media to

share the news.

3.2. Social Media marketing

3.3. Daily deals websites

20.


Partners


Figure 3.7. Popular daily deals websites

0 5 10

Grupon

Citeam

Gruper

MyDeal

Cuppon

Okazik

FastDeal

Happyday

Ofeteria

Frupi

DealLx

Other

5,4

3,6

2,8

1,3

1,3

1,3

1,2

0,7

0,5

0,2

0,2

1,5

[%] 0 25 50 75 100

Computer

Photo and RTV-AGD

Health and Beauty

Sport and Tourism


Automotive

Goods for Children

Hause and Garden


Clothing

Hobby

Delicatessen

immaterial products

other

82,1

75,9

64,5

62,9

62,8

61,3

57,3

56,1

54,4

53,9

50,0

48,1

44,4

47,3

[%]

Figure 3.8. Usage of price comparison sites in e-retail sectors

Figure 3.9. Price comparison websites popular among online shops

0 25 50

Ceneo.pl

Nokaut.pl

Okazje.info

Skapiec.pl

Radar.pl

Kupujemy.pl

Smartbay.pl

Twenga.pl

Bazarcen.pl

Torturacen.pl

Other

Do not use comparison sites

37,7

35,9

29,8

26,7

17,6

10,7

8,1

7,9

3,4

2,3

5,0

43,7

[%]

21.


Partners



The recent results of our study showed that, for the first time in years, the Polish payment market of online trading has begun to follow European trends. The visible success of online transfers sug-gests that currently our market is evolv-ing in the direction of the Dutch model, in which solutions like Pay-By-Link (PBL) are commonly used. At the same time, 67.6% of online transfers are operated by payment service providers, reflect-ing the large success of these entities on the Polish market.

It should be noted at this point that a separate trend in the field of Internet payments may soon become the solu-tion based on mobile payments, with the use of smartphones. Especially, if they are integrated with sale and distribution of products through ap-plications installed on these devices. Observation of unusual development dynamics of mobile solutions in differ-ent usage areas in Poland suggests that in the coming years they will likely be able to challenge other services of on-line payment.

The current trend for accepted pay-ment methods in Poland indicates the dominant coverage of COD payments and bank transfers. Noteworthy in re-cent years is a significant expansion of the scope of the acceptance of a few important methods: payment service providers from 46.29% to 78.42%, on-line transfers from 51.19% to 63.59% and payment cards from 54,97% to al-most 60%. The popularity of virtual pay-ment services is gradually growing and amounts to about 20% at present.

A significant increase in availability of credit card payment in Polish online stores is related to the fact that they are the most important instrument of payment in foreign markets. In the UK, where the market trends are a com-

mon indicator of changes expected in Poland, 40% of online transactions are carried out using a credit card, and 35% - a debit card. In Poland, the cards are usually widely accepted for cross-border payments, but currently oper-ating e-transfers, in principle, allow for payments exclusively with Polish online stores. This is due to various organiza-tional reasons and because they use national bank transfers.

3.4. Popular payment methods

3.5. Cross-border sales and evolution of online payments

4. Transactions and payments

Figure 4.1. Are you satisfied with pay-ment methods available in Poland?

69,9%

13,3%

16,8%

yes hard to say no

Figure 4.2. Percentage of sales served by the certain payment method in 2010 and 2012

0 20 40 60 80 100

2010

2012

35,4

38,6

37,9

29,3

4,9

11,5

7,8

6,7

5,5

6,6

6,2

4,8

bank transfercash on delivery

online transferpayment upon pickup

payment carde-payment integrator

other

[%]

22.22.


Partners



Figure 4.3. Payment methods accepted by online stores in Poland in 2010 and 2012

0 10 20 30 40 50 60 70 80 90 100

bank transfer

cash on delivery

e-payment integrator

payment upon pickup

quick online transfer

payment card

virtual payment servicesuch as PayPal

installment credit / loan

bill payment network

mobile payment

online payment coupons

Premium SMS/MMS payment

other

94,8

92,4

46,3

69,9

51,2

55,0

18,5

17,8

3,4

1,3

1,5

0,7

2,4

95,6

90,0

78,4

68,9

63,6

60,0

19,9

18,9

1,8

0,7

0,7

0,0

1,6

2010 2012

[%]

23.23.


Partners



Figure 4.4. Payment methods accepted by online stores in Poland, with respect to their attitude towards international trade

0 10 20 30 40 50 60 70 80 90 100

bank transfer

cash on delivery

payment upon pickup


payment card

installment credit / loan

virtual payment service


mobile payment



other

96,6

88,3

72,2

63,9

69,8

22,9

33,2

2,9

1,0

1,5

0,0

2,9

95,0

90,8

67,2

63,4

55,0

16,9

13,2

1,2

0,5

0,2

0,0

1,0

sale in Poland and abroad only in Poland

[%]

such as PayPal

24.24.


Partners



Figure 4.5. Payment methods accepted by online stores that receive over 500 and less than 50 orders per month

0 10 20 30 40 50 60 70 80 90 100

bank transfer

cash on delivery

e-payment integrator

payment upon pickup


payment card

instalment credit / loan

virtual payment service



mobile payment


Other

95,5

85,3

67,7

62,1

50,0

41,9

18,2

16,2

1,5

0,5

0,0

0,0

1,5

93,0

99,0

88,0

77,0

74,0

81,0

29,0

26,0

1,0

1,0

1,0

0,0

1,0

less than 50 orders over 500 orders

[%]

such as PayPal

Figure 4.6. Factors influencing the shop owners’ decisions on the provision of certain payment methods

0 20 40 60 80 100

costs of transaction service

the risk of not getting paid

popularity among clients

the waiting time for payment

complexity of the service

easy integration with IT system

fact that competitors have it

settlement in other currencies

63,0

53,8

50,0

42,1

36,6

34,0

15,7

9,7

27,1

31,9

34,3

35,8

36,3

38,4

28,9

16,3

5,1

8,6

10,1

12,8

16,4

15,2

27,1

17,8

3,2

4,2

3,6

7,2

8,3

7,6

14,6

27,6

4,8

13,7

28,5

very importantimportantneither important nor unimportantof little importanceunimportant

[%]

25.25.

Partners


Why did SOFORT AG decide to enter the Polish eCommerce market?E-commerce is booming in Europe and the trend is only going one way: upwards. Very good news for all market participants in general, but there are some areas in the European Internet and e-commerce landscape which in the past have been identified by the SOFORT AG, a Eu-ropean company, as less positive. These are first of all, the lack of cross border transactions taking place in Europe via the Internet and secondly the domination of American business mod-els and corporation’s such as Amazon, Google, EBAY, Facebook etc. in the e-commerce busi-ness. Despite the power of these companies, we believe that there is still a chance for European companies to defy the dominance of American companies in the online payment services sec-tor. Therefore, SOFORT AG follows the strategy of establishing a successful pan-European e-com-merce payment service as soon as possible. Due to this fact we want to ensure that all Europeans have access to SOFORT Banking and are able to easily pay for their purchases – nationally and in-ternationally – with direct bank transfers based on the online banking structures. Logically, the expansion plan of SOFORT Bank-ing Poland was one of the highest priorities - due to the size of the market with the highest growth rates in Europe, a high internet penetra-tion and the popularity of online banking. In ad-dition, we have had a lot of requests by existing business partners and customers to offer a so-lution for cross border transactions to and from Poland. Following this strategy, SOFORT Banking is expanding continuously and is currently avail-able in 11 countries. By the end of 2014 we want to have added two more countries.

What were the main obstacles you had to face while entering the Polish market and how long did the preparation take?

Beside the development of the technical solu-tion for the Polish market, the challenge was the localization of our service in all areas. We have had to adapt our website, payment pages, ad-ministration area, user and merchant communi-cation and ensure a high usability factor for the user’s journey. Of course, this is an ongoing pro-cess. In February 2014 we will have a re-launch of our Polish website with a brand new look.

What was the biggest surprise after launching your services in Poland, comparing to the na-tive German market?Right from the start we were very impressed by the high conversion rate of SOFORT Banking in the checkout process. We believe we have done a good job, but additionally the high ac-ceptance and commonness of online banking in Poland was definitely a significant factor for the positive results and this was a big difference to some other markets such as e.g. in South Eu-rope.

What, in your opinion, is the key to success on the Polish market?We will keep working at ongoing improvements e.g. in areas like localization, product and usabil-ity improvements and the better understanding of the country, mentality, business behavior and cultural differences. We have already built inter-faces to the major shop systems in Poland and we will continue adding new partners. Market players gave us the feedback that we have stim-ulated the competition in the Polish payment market and that we will help lower their costs and get better solutions or innovative products. In addition, the low cost for international trans-actions attracts merchants for SOFORT Bank-ing. In comparison to most of other solutions, SOFORT Banking does not offer higher rates for international transactions such as for domestic ones.

In hindsight, was it a good decision to enter the Polish market and was the decision made at the right time?Yes, we are sure it was the right decision. At the moment, Poland is the market with our high-est growth rate and taking this into account we would be happy to have entered earlier. Poland has a really high potential for our product and we are looking forward to make our contribu-tion in the fast developing of the e-commerce market in Poland.

Taking into account the strategic location of Poland in Europe, was SOFORT AG’s invest-ment into the Polish branch the first step made towards the further expansion into the Eastern European markets?As explained, we want to establish a successful pan-European e-commerce payment service, therefore we will continue adding more coun-tries. Planned are two more countries by the end of 2014. We have two strategic hubs for the future expansion to Eastern Europe: Poznan in Poland and Vienna in Austria.

SOFORT AG IN POLAND - ANOTHER STEP TOWARDS EUROPEAN EXPANSION

With the payment system SOFORT Banking, SOFORT Überweisung Pay-code and the online verification system SOFORT Ident, SOFORT AG offers inno-vative products for a secure payment of merchandise and digital goods on the Internet. With its product SOFORT Banking, the company based in Gaut-ing near Munich is the market leader amongst the direct transfer procedures in Germany. Over 25,000 E-commerce shops process more than two million transactions with SOFORT Banking per month. Apart from Germany, the ser-vice can also be used in Austria, Switzer-land, Belgium, France, the Netherlands and the United Kingdom, Italy, Spain and Poland.

We talked with Dagmara Kruszewska, the Country Manag-er of SOFORT AG in Poland, about the entry of the German payment company into the Polish market in 2012.

Investor’s voiceSOFORT AG about the Polish branch

26.26.

I WANTMORE GROWTH.I WANT IT NOW.SOFORT Banking – the international payment system that benefits you.

transaction fees from 0,8%

> 25,000online shops

> 12 million user

www.sofort.com

YOUR ADVANTAGES WITH SOFORT.

SOFORT Banking is a direct payment system and works like an automated advanced payment (by bank transfer) within seconds.

Use the advantages of the practical and secure SOFORT Banking as self-evident payment system in your online shop. Your customers pay with their familiar online banking details without any additional registration.

Available in 11 European countries (AT, BE, CH, DE, ES, FR, IT, HU, NL, PL, UK)

Currency conversion is possible with SOFORT XXL

contact us:

sales.international@

sofort.com

> 100 shopsystem interfaces

http://sofort.com


Partners



More than 50% of the entities in Po-land receive on average 100 orders per month, and only 7.8% carry out more than 1,000 orders. The share of stores filling less than 100 orders per month has declined in recent years from 54.9% to 50.6%, and the share of stores carry-ing more than 1,000 orders has risen by just 1.1%. The obtained data justi-fies the low number of people working in Polish online stores - 73.4% of them employ only 1 to 5 people.

In Poland, as many as 86.4% of online retailers are satisfied with the courier services and only 3.9% are dissatisfied. This result proves the competitiveness of the market and the high level of cus-tomer service provided by the courier companies.

According to our study, UPS is the leader (41.60%) of courier companies in Poland. DPD ranks second (29.80%), fol-lowed by DHL (19.60%), which gained the largest increase in the Polish market share among the courier services in the last 3 years. Such classification may sug-gest that e-stores pay significant atten-tion to the quality of service, because the three courier companies are far from the cheapest ones on the market.

5. Inventory management and logistics

5.1. Number of eCommerce orders

5.2. Popular courier services

The largest increase in the Polish market share among

the courier services was gained by DHL.

Figure 5.1. Are you satisfied with the courier services?

86,4%

9,6%

3,9%

yes hard to say no

Figure 5.2. Popularity of courier services in Poland

0 10 20 30 40 50

UPS

DPD

DHL

GLS

Siódemka

K-EX

Opek

InPost

Schenker

Raben

EMS Pocztex

Spedpol

TNT

other

41,6

29,8

19,6

14,6

13,8

10,7

7,5

6,8

3,2

3,0

2,9

0,2

0,2

3,9

[%]

28.28.


Partners



From 2009 to 2012, we have observed within the Polish eCommerce arena a very dynamic shift in the market share for SaaS platforms. Since 2009 their popularity has basically doubled from 14.4% to 29.1%. SaaS solutions have en-joyed a great boon to their popularity catapulting them into the leading po-sition ahead of licensed solutions with a score of 26.8% at that time. In recent years popularity of licenced software with self hosting has dropped by more than 10%. This process is consistent with global trends visible in developed markets.

The leader of SaaS platforms in Poland is the fast growing Shoper, which was identified by more than 9.1% of respon-dents. The second most popular option in terms of building online shops ap-peared to be using a free open source license (28.1%). The clear leader in open source software is, as every year, osCommerce (12.0%), although its po-sition may soon be threatened by the more mature Presta Shop (9.1%). The third most popular option for running a web store is developing a custom solu-tion (14,5%).

Only 15.9% of store owners decided to purchase a licence to build their busi-nesses. The leaders of the licenced soft-ware category are SOTE (6.1%), KQS.Store (4.4%) and i-shop (1.6%).

6. Shopping cart software

In terms of the IT solutions popularity, the Polish

eCommerce follows global trends.

6.1. Technological solutions in the Polish eCommerce

Buying licensed software has become a less popular

option for running an online store.

Figure 6.1. eCommerce solutions used in Poland in 2009 and 2012

0 5 10 15 20 25 30 35

Software as a Service (SaaS)

free, Open Source Software (OSS)

licensed software, own hosting

dedicated software, comissioned

own, copyrighted software

hard to say

14,4

21,3

26,8

19,6

15,7

2,1

29,1

28,1

15,9

14,5

10,0

2,4

2009 2012

[%]

29.29.


Partners


Figure 6.2. Type of software that is going to be used by Polish online retailers in the future

13,7%

8,4%

17,9%

29,5%

17,9%

12,6%

SaaSfree, OSSlicenced, with own hostingdedicated app, comissionedown, copyrighted softwarehard to say

Figure 6.3. The most popular eCommerce solutions in Poland

0 5 10 15

dedicated software, commissioned

osCommerce


Shoper

Presta Shop

SOTE

Click Shop

IAI-Shop

iStore

KQS.store

Redcart

Magento

13,8

12,0

9,6

9,1

8,4

6,1

5,3

4,9

4,4

4,4

3,0

2,0

[%]

SaaS

free, Open Source

licenced, with own hosting

dedicated software, commissioned


30.

USE OUR KNOW-HOW

TO DO IT RIGHT

Marketresearch

Complying with the legal norms

Website translation

& proofreading

Liaising with partners

Organization of the branch

Marketing & PR

We launched the Trusted Shops services on the Polish market in 2010

SEE CASE STUDY

European leading seal of approval for online shops


WANT TO EXPANDYOUR eBUSINESSTO THE POLISH MARKET?



http://dotcomriver.com/trusted-shops.html?utm_source=AdDCRconsult&utm_medium=PDF&utm_campaign=RaportEN

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Partners



©

Dotcom River Sp. z o.o.

Dotcom River is a software devel-oper, providing customized, web and mobile applications for clients from around the world. Dotcom River’s solutions streamline daily operations of Polish and German online shops, financial and postal services, certi-fication authorities and interactive agencies.

Dotcom River also executes market research and economic analysis. The company supports scientific activities and organizes trainings and industry conferences, such as DobryKupiec.pl. Leveraging comprehensive knowl-edge about Polish eCommerce, the company provides consultation and helps to facilitate and coordinate en-try of foreign businesses into the Pol-ish market.

Contact to the Editor:

Dotcom River Sp. z o.o.ul. Buska 9/553-326 WroclawPoland

tel. +48 71 / 788 95 [email protected]://dotcomriver.pl

About the Editor

Published: February 2014

This report is an executive summary, created on the basis of data collected by Dotcom River during detailed stud-ies in 2009-2013. The research involved more than 1,900 e-retailers, and nearly 12,000 e-consumers. The data comes from the original reports:

eHandel Polska 2012Published: October 21, 2012ISBN: 978-83-930264-3-2

eHandel Polska 2010Published: October 30, 2011ISBN: 978-83-930264-2-5

Other sources:

eCommerce EuropeEurope B2C ECommerce Report 2013 - Light VersionPublished: May 22, 2013http://eCommerce-europe.eu;

GUS (Central Statistical Office),Concise Statistical Yearbook of Poland 2013Published: June 2013http://stat.gov.pl/gus/5840_737_ENG_HTML.htm

Centre for Retail ResearchOnline Retailing: Britain and Europe 2012http://www.retailresearch.org/onlineretailing.php

European Commission (Eurostat), Internet use in households and by individu-als in 2012Published: December 13, 2012http://epp.eurostat.ec.europa.eu/

Polish Ministry of Treasury,Forecasts for Polish e-commerce market in 2013Published: March 7, 2013http://msp.gov.pl/portal/en/88/4005/

The data contained in the report is the property of the publisher and the report may be distributed only by its publisher. In accordance with the principles of fair use it is permissible to cite an extract from the works, pro-vided that it is done in order to explain, analyse, comment or teach in other intelectual property, always stating the source of the information quoted. Creation of papers or summaries of the report without editor’s permission is prohibited.

PMR Research, Survey 2012http://research-pmr.com

32.32.

http://dotcomriver.pl/files/raport-ehandel-polska-2012.pdf

http://dotcomriver.pl/files/raport-ehandel-polska-2010.pdf

ecommerce poland 2013 report - facts and figures for investors

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