PANDEMIC ACCELERATES CHANGE, BUT DOESN’T GIVE YOU COURSE. DOES THE ENTIRE E-COMMERCE INDUSTRY COLLECT AWARDS
The first pandemic lockdown has become an extremely effective fuel for e-commerce entrepreneurs. Analysts agreed — the coronavirus accelerated market changes and the evolution of shopping habits, but did everyone take advantage of the opportunity and successfully migrate their services to the Internet? It turns out that mainly industry novices remained on the proverbial ice.
In the debt network
The beginnings of the niche development on the Vistula River were not the most spectacular. On the one hand, between 2010 and 2018 alone, the number of e-commerce enterprises increased by over 30 percent. However, while the last decade brought to the domestic market well over 7.6 thousand. online stores, after an average of 8 years of operation, only 2.3 thousand. the companies registered at that time managed to stay afloat. Reason? Two years ago, the editors of the Polska Times reported that in December 2017 the debt of the domestic e-commerce industry was PLN 106,913,730. At that time, companies mainly from Wielkopolska and Mazovia faced solvency problems. Record holder? As much as PLN 2.4 million in the red. Negative balances were reduced with transactions in the pre-Christmas period, but significant changes were yet to come. Finally, the first quarter of 2020 has come, and thus — the closure of brick-and-mortar stores during the March lockdown.
Moderately enthusiastic analyzes were shared by e.g. analysts from the Center for Retail Research (CRR). It was originally assumed that the e-commerce industry in Western Europe would account for 15.3 percent. the entire retail market by 2022. CRR predicts that, due to the pandemic, Internet companies will reach this level by the end of 2021. When it comes to the situation in Poland, the editors of the portal dlahandlu.pl say that while in the first half of 2019 e-commerce recorded 6 percent shares in gross demand, the indicator increased to 15% in 2020. The main beneficiaries of the lockdown are entrepreneurs dealing in the distribution of books and multimedia, as well as the food niche, which is said to be at 239%. increase in orders. Health and beauty products are also holding up well, but some still have a dominant market flaut. Young entrepreneurs from the sports and tourism niche especially have big problems. Interestingly, newcomers selling clothing also faced a considerable challenge.
The fittest will survive
It seems that large marketplaces have the most stable situation. Allegro is a flagship example on the Polish market, although younger consumers are looking for alternatives. Increasingly, smaller players are ahead of the “older brothers”, but they are mainly based on a strong personal brand. These include influencer stores and well-known brands, so less space is left for complete newbies. They were the main drivers of the less optimistic bankruptcy statistics before the pandemic. The main problem of both pre-pandemic and lockdown newcomers was the cost of maintaining the store. Despite several EU programs, the industry still does not have access to effective system solutions that could realistically support beginner e-commerce players. For the most part, the commercial market does not provide tools for newcomers, although the Provema team can boast an interesting offer. Katowice fintech is systematically developing the LoanByLink model, which allows you to easily transform any website into a fully-fledged online store. As the creators of the project themselves declare, their system meets the expectations of the industry, as it greatly facilitates the first steps for beginners on the e-commerce market. There is a good chance that just such an approach can really support the industry, and what’s more — contribute to the development of further innovations in the sector.
Are there any chances for the contenders to enter the e-commerce market? On the one hand, the pandemic has given many wings, but they are mostly big players. While the industry is growing more and more, its offer seems to be ignored only by fledgling colleagues.