E-commerce company Allegro goes local to stand out from Asian competitors
GDANSK, May 22 (Reuters) - E-commerce platform Allegro is doubling down on its local offering in a bid to differentiate itself from Asian competitors like Temu, its finance chief said on Thursday.
Allegro, which aside from its home market Poland runs third-party marketplaces in the Czech Republic, Slovakia and Hungary, has in recent months removed offers with long shipping times, mostly from East Asia, from its international platforms, it said in an earnings statement.
"We're looking to really double down on our differentiators versus the Asian players that are in the market, and make it really clear to the consumer why they look to Allegro every day as the main place to shop," CFO Jon Eastick said during a conference call.
Eastick told Reuters in an interview that the move followed a similar one for its Polish marketplace, which he said had "almost no impact" on the gross merchandise value of the business.
It also plans to improve its platform, including features for its consumer loyalty scheme and initiatives that use AI solutions to drive better recommendations and choice of advertisements, Eastick said.
Allegro, which has been developing the platform since 1999, remains the go-to online shopping place for millions of Poles despite growing competition from international players.
Its share of the Polish retail e-commerce market was 38.8% at the end of 2024, according to data analytics company Euromonitor International. Amazon held a 3.9% share, followed by AliExpress with 3.4% and Temu with 1.5%.
"There was fairly rapid progress from zero in 2023 and early part of 2024, but it's slowed down dramatically now," Eastick said about the performance of Asian platforms in its markets, referring to Allegro's own monthly survey looking at transaction share across e-commerce players.
"We'll continue to defend our position in terms of marketing spend," he added.
Temu entered Poland in June 2023 and has been splurging on marketing.
"The advertising intensity may be a little bit higher so far, but it hasn't changed massively," Eastick said. "But marketing spend and share of voice is definitely where we feel the impact of the new competitors the most."
Allegro's marketing costs rose 10% to 317.1 million zlotys ($84.46 million) in the first quarter, slowing down from a 28.7% in the fourth quarter that included the busy holiday season.
($1 = 3.7545 zlotys)
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