WARSAW – You don’t think of Poland as a centre of Internet usage, but according to the latest figures, over two thirds of those who have access to the Web go online every day or almost every day.
In fact, the Polish e-commerce market is significantly bigger than its Irish, Portuguese or Greek counterparts.
A member of NATO (since 1999) and the European Union (since 2004), the country has a population of about 38 million people. Gross domestic product per capita in the country was estimated to be US$16,500 in 2007. According to SMG/KRC NetTrack research, Internet penetration in Poland was around 42 per cent in Q2 in 2007. That means there were 12.8 million Internet users (over 15 years old).
Interactive Advertising Bureau Polska (IAB Polska) estimates that in 2006 Internet advertising market was worth Polish Zloty 215 million, excluding search advertising. Unfortunately Google does not disclose its revenues, which makes the process of estimating the value of the market quite difficult. Nevertheless, IAB Polska prompted that paid search advertising could have been worth Polish Zloty 60 million in 2006. That makes a total market value of Polish Zloty 275 million. It also means that Internet advertising has more than five per cent of all media ad spend in the country.
IAB Polska forecasts that in 2007 Internet ad spend reached Polish Zloty 305 million and search engine marketing revenues rose up to Polish Zloty 110 million. According to these estimations online market was worth Polish Zloty 415 million in 2007.
There are thousands of Internet firms operating in Poland. Google is the most popular Website in the country (it is visited by 77 per cent of Polish users every month). The second most popular Internet destination is Onet.pl, a Web portal owned by a large media group ITI. The Digital Landscape: Poland report outlines the main market players (both local and foreign firms operating in the country, grouped into categories: advertising bureaus and networks, interactive agencies, web portals, other services). It also describes companies’ ownership structure and business models.
From 2001 to 2006 Polish ecommerce market grew by over 4500 per cent. The highest growth rate was seen in 2000-2004 when Polish online retail trade sales increased by 200 per cent per year. The value of the market in 2006 was estimated to be Polish Zloty 5 billion. Online auction platforms generated 3 billion, online shops had a turnover of Polish Zloty 2 billion. According to the latest estimations published by Rzeczpospolita, Polish online shops and auction platforms generated Polish Zloty 8 billion in 2007.
Since 2005 about 60 per cent of Polish e-commerce sales have been made by transactions performed on auction platforms. The indisputable online auction leader in Poland is Allegro.pl. The catalogue run by Sklepy24.pl currently contains information about 3,300 Polish online stores divided into 12 groups. Home &Garden makes the largest category; there are another four significantly big groups: Health & Beauty, Gifts & Flowers, Electronics &Photo and Computers. There are not many Polish shops selling food, only a few from 77 listed in the catalogue offer fresh food (e.g.Frisco.pl).
According to the data published by Eurostat, in 2006 one in eight Poles and one in four Polish Internet users did online shopping at least once. This proportion places Poland on 17th position in the European ranking, next to Slovenia, Czech Republic and Slovakia.
The Polish Internet market can be considered a mature one with local companies having very strong market positions. Although foreign big players have started their operations in Poland it has proved difficult for them to outplace local firms in a short period of time. A good example is eBay, which entered Polish market in 2005 and is still behind local auction platform – Allegro.pl.
What created a lot of stir on Polish market recently were two announcements: both MySpace and AOL decided to open their offices in Poland. At the moment MySpace is in the process of hiring staff for marketing and content management departments. Interestingly, MySpace is perceived as one of a few international companies which stands real chances of conquering Polish market. Other international social networking players (Hi5 and Bebo) are trying to enter Polish market,but they will have to face very strong competition.
There are already local firms: Fotka.pl (with more than 3 million users a month), MojaGeneracja (with more than 2 million users a month), Nasza-Klasa.pl (with more than 6 million registered users), Grono.net (with more than1 million users a month), ePuls.pl (with round 600 thousand users amonth), which are doing very well and which may prove very difficult to compete with.
Many Polish firms made public offerings in 2007. There are already a few companies which have been listed on the stock exchange in Warsaw for many years (Interia, Agora). Last couple of years has shown that more and more firms find stock exchange a very tempting way for finding new resources for business development. Hence, Bankier.pl S.A.,Gadu-Gadu S.A., Travelplanet S.A. and many more firms went public.
It goes without saying that year 2007 should be called “a year of investments.” The amount of venture-capital investments and acquisitions has not been seen on Polish market before. There are many traditional firms buying small and medium size Internet companies to gain market advantage or online entrepreneurs widening their portfolios and increasing revenues from the Internet.