Global internet auction colossus eBay may be number one in Europe, but not in Poland. Despite a two-year presence and plentiful financial input, the US giant has barely managed to gain 10 % of the market, and doesn’t know when things are going to look up.
Meanwhile Allegro, widely perceived as eBay’s “indigenous“ rival, is going from strength to strength. “In 2006, our turnover was PLN 2.5m, that is over half the turnover of the whole market, which was worth PLN 4.6m,“ says Patryk Tryzubiak, PR manager at Allegro. The company, owned by the British firm QXL Ricardo, already controls 80% of all internet auctions taking place in Poland, but doesn’t plan to stop there. “We’ve got over six million users,“ boasts Tryzubiak. “That’s half of all Polish internet users. And the market is growing very fast. Soon we expect to have 10 million.“
EBay traces the root of its failure back to the very first hours of its Poland debut, on April 21, 2005. Its entry Poland was preceded by a fanfare of press excitement, as a chorus of journalists and analysts predicted that the global king of internet auctions would knock Poland’s players off their feet. But the launch, when it came to it, proved a little short of a disaster.
It didn’t help, that just as eBay was about to launch, Poland’s national hero, Pope John Paul II, died in Rome. Postponed for two weeks, in deference to national mourning in Poland, eBay arrived somewhat in confusion. Then, when the e-auction platform finally launched, a series of technical flaws and problems turned eBay’s much vaunted take-off into an almighty turn off. “You never get a second chance to make a first impression,“ says Alina Prawdzik, country manager for eBay Poland, “It can’t be denied, the company is still living with the consequences of those first few days.“
According to Rafał Agnieszczak, cofounder of Poland’s number three auction site, swistak.pl, the cock-up could have been avoided. “EBay just wasn’t professional,“ he says. “Its simplified structures weren’t good enough for the Polish market, there were loads of flaws and the transactions were way too slow.“
That first impression was particularly crucial, in Poland, eBay’s Prawdzik goes on, where a certain element of public opinion was already stacked against the US newcomer, from the outset. “Although Allegro is actually British owned, there is a certain level of loyalty to Allegro in Poland, where many think of it as a ‘local’ company,“ she explained. Coming into the market six years after Allegro had already become a household name, eBay had to prove it was better. It had to enter with a bang. When it entered with a fizzle everyone lost interest.
Swistak’s Agnieszczak doesn’t think eBay can recoup the damage any time soon. “Allegro is such an incredibly strong brand in Poland, that it’s very hard for anyone to make any inroads,“ he says. Prawdzik admits that Allegro’s hegemony is daunting. “We’d like to be number one. But I can’t predict the future. All I can say is that we’re here to stay and we expect to be a significant player. We have to see how fast our community wants to grow.“
Even eBay’s awesome capital resources won’t necessarily help, according to Agnieszczak. “It’s not necessarily a matter of money,“ he says. When eBay first launched, some hoaxer put Swistak up for sale on Allegro, as a joke; it was generally assumed that Swistak would be biting the dust within months. But two years later, Swistak is still strong and hearty. “We are a three-person firm,“ Agnieszczak points out, “Ebay are investing stacks of money and energy, But we have around the same share of auctions.“
Prawdzik says eBay no longer hopes to compete directly with Allegro; it now plans to build its strength in places where Allegro doesn’t go. “It’s hard to beat Allegro as a forum for domestic sales, but we are a global platform and we offer sellers the opportunity to sell their products abroad,“ she says.
She claims eBay can be a magnet for exporters. “A lot of Poles now sell car parts on eBay to foreign buyers, for example, in Germany,“ she says, adding that eBay is also a natural forum for sellers of unusual products, who may not find a good price oreven a buyer on the local market. “One of our most successful clients, for example, is a young man who paints little figures forwargames and sells them-for an astonishingly good price-in the US.“ People hoping to sell labour intensive goods, like hand-made craft, according to Prawdzik, will also turn to eBay. “Products like this are still not fully appreciated on the local market, where labour is still comparatively cheap, but can fetch impressive prices on western markets.“
But Tom Parkinson, secretary to Allegro’s owner, QXL Ricardo, thinks eBay’s Poland website is not, in itself, a forum for international sales, though it may serve an advertisement for eBay’s other national sites. “EBay is obviously a global name, but I don’t know how much that helps Polish exporters in practice,“ he says. “I don’t know if you can reach American buyers through eBay Poland, for example. I think you may have to register separatelyon their US site.“
“It’s a free market, of course,“ Parkinson goes on, “We have Germans buying car parts in Poland through Allegro, for example. And in fact, we are thinking of facilitating this by setting up links between our national sites. But my impression is that eBay’s country sites, like ours, are designed primarily as forums for domestic sales.“
Meanwhile Allegro’s Tryzubiak points out that QXL Ricardo, is growing competition for eBay abroad as well. If eBay has won the west, QXL is now fast conquering CEE Europe, where eBay has no presence, and according to Prawdzik, no plans to create one. “We’ve got platforms in the Ukraine, Russia and Hungary. We expect them to grow really fast,“ says Tryzubiak. The Czech subsidy, Aukro.cz, is already local leader. “They are where Allegro was about three or four years ago,“ Tryzubiak claims. The company also has plans for Romania and Bulgaria.
Back home, though, only one thing is certain: there are still millions of Polish users to be gained. Only one in three people in Poland now use the internet, as opposed to one in two people in Britain, but the ranks of internet users continue to swell. “We hope to hold onto our share as the market grows,“ says Parkinson. “We hope to grow with the market,“ says Prawdzik. So the battle goes on.

źródło: Poland Monthly | 6.6.2007 | rubryka: Business | strona: 54 | autor: Hilary Davies 

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