Amazon Prime overestimated Allegro by PLN 7 billion

The e-commerce market is closely watched by investors. He remains the leader in Poland Allegro, however, in our market it is puffing up Amazon, the giant of world trade. On Tuesday, he introduced the Amazon Prime service to our country, which caused Allegro's capitalization to drop by 12 percent. that is PLN 7 billion.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

Amazon Prime for PLN 49 ... next year!

Amazon, the e-commerce giant, has launched its Amazon Prime subscription in Poland. For PLN 49 a year, each customer of the website can get free deliveries of goods, access to Amazon Prime Video and additional benefits. This is a challenge to Allegro, the most popular e-commerce platform on the Vistula River, which offers flat-rate free deliveries under the name Allegro Smart and at the same price. Since Amazon Prime was introduced in Poland on Tuesday, Allegro's share price has fallen by 12,2%. from PLN 58,25 to PLN 51,14. This means that for this reason the company's capitalization fell by approximately PLN 7 billion. At the same time, Amazon stock rose 0,33 percent.

Allegro vs Amazon

The Polish market will face an important battle in the coming years between Allegro and Amazon, for which it is an increasingly important market. So far, Allegro has had many successes, but many of them consisted in copying ideas already introduced by Amazon in other markets. This was the case with Allegro Smart, the prototype of which was the Amazon Prime service, introduced with great success in 2005 in the USA. Smart was, among others advertised on television as an alternative to traditional in-store shopping, because it combined a lower price available on the Internet with no delivery fee. The service was launched in cooperation with InPost, the operator of the largest network of parcel machines. However, talks and cooperation Inpost with Amazon prompted Allegro to create its own network of such machines, it is also developing its own network of warehouses.

In September, it launched a pilot program with One Fulfillment, a comprehensive logistics service for sellers, which covers the entire sales process - storage, packaging and shipping of goods, as well as full handling of returns. Thanks to this solution, in the form of one parcel, it will be possible to send goods from different sellers, which will significantly reduce costs and relieve the cooperating networks parcel machines*. It's no secret that Allegro, like Amazon in other markets, ultimately wants to offer same-day delivery of the ordered goods. In this case, the e-commerce customer experience will come closer to the customer experience of buying in a brick-and-mortar outlet.

The future of e-commerce

The e-commerce industry in Poland and around the world has definitely good prospects. Thanks to the pandemic, online shopping was reached by people who would otherwise be difficult to persuade to do so. Therefore, the industry's turnover has increased significantly. However, many players are fighting for this market cake. The duel between Allegro and Amazon promises to be very interesting, and consumers should also benefit from it. Currently, restrictions in the supply of goods, caused by a significant increase in demand in the markets, remain a big problem. These companies are highly dependent on their own logistics chain.

It is worth considering these industries when constructing your investment portfolio. When investing in the e-commerce industry, it is worth remembering about geographical diversification, because its prospects in many markets are even better than in Poland. We can invest in shares of companies such as Amazon and Allegro, as well as Alibaba (owner of Aliexpress) or JD.com. It is also worth paying attention to MercadoLibre - the leader in online commerce in South America, or Jumia Technologies, which is the leader in trading in Africa.

* RECTIFICATION

InPost sp. Z oo explains that the word "Paczkomat" is a registered trademark, for which the Patent Office of the Republic of Poland granted protection right no. R.18.02.2010 by the decision of February 225679, XNUMX. The right to use the designation "Paczkomaty" to designate services related to the use of parcel machines is granted only to companies from the lnteger.pl Group, including lnpost sp. Z o. for labeling your services.

Z oo, ul. Wielicka 28, 30-552 Kraków, KRS number: 0000543759
attorney - attorney Michał Wojtyczek