E-commerce market: From July 1, goods from Aliexpress are more expensive by VAT

The pandemic influenced the rapid development of the e-commerce industry. Already 19 percent. of all global sales take place online, in Poland it is 9,1 percent. From July 1 products purchased on Aliexpress will be subject to VAT without exception. This is an opportunity for Amazona i Allegro to increase its market share.

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.

End of "promotion"

As of July 1, most goods bought at auctions in China may go up by VAT. Regulations come into force that abolish in the European Union the exemption from this tax for goods worth less than EUR 22. In Poland, this exemption did not apply, but parcels from China were first directed to other EU countries, to later reach recipients in Poland. Recent weeks have brought a lot of uncertainty among buyers whether they will pay VAT or not, especially since the big sale on the Aliexpress website ended on Friday. Shipments with these goods will reach Poland after July 1, which may mean that the buyer will have to pay tax. The coming weeks will bring an answer to how tight the new system will be and whether foreign platforms will actually make it possible to pay the tax immediately upon purchase from day one. How much the sales of platforms such as Aliexpress will drop in Europe will depend on the practice and tightness of this system. At the same time, it is an opportunity for Amazon or Allegro to increase sales.

E-commerce market - the pandemic has helped

The entire global e-commerce industry grew by 28 percent. in 2020, already accounting for 18 percent. all retail. While pandemic restrictions are slowly receding, online sales are on the rise. The forecasts for 2021 are 14 percent. increase in online sales and 5 percent. offline.

In Poland, after a sharp increase in online sales in March by 28,8 percent. compared to the previous month, in April we recorded an increase by 6,2 percent, and in May a decrease by 7,2 percent. In May, the share of online sales in total sales amounted to 9,1%, compared to 10,8%. in April. You can see that the pandemic has significantly increased the level of online sales, however, we are still far short of online trading leaders. Of the 5 markets where online sales are the highest, three are Asian countries (China, Japan, Korea).

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Online commerce is fueled by sales and special trading days. The Aliexpress sale lasted from June 16 to 25. On June 21 and 22, Amazon was in the lead "Prime Day"during which Prime subscription holders (available in 22 markets outside Poland) could buy products at significantly reduced prices. Amazon's position, which is responsible for 40 percent. The US online sales market is so significant that Walmart and Target organized similar sales during this period. Important events for the e-commerce industry around the world are Black Friday (this year on November 29.11) and Cyber ​​Monday (November 29.11). Earlier, in November, Aliexpress organizes its day of occasion.

When investing in the e-commerce industry, it is worth remembering about geographical diversification, because its prospects in many markets are much better than in Poland. We can invest in stocks of companies such as Amazon, Alibaba (owner of Aliexpress), JD.com or Allegro. It is also worth paying attention to Free market - the leader in online commerce in South America, or Jumia Technologies, which is a trade leader in Africa.