July 7 (SeeNews) - Romania's largest online retailer eMAG is targeting double-digit growth in 2023, building on the positive momentum of the past few months and sees itself in a unique position to drive e-commerce market growth in Central and Eastern Europe (CEE), CEO Tudor Manea told SeeNews.
“The large investments of previous years created the foundation for a steady business outlook in the mid and long term. As a regional ecosystem of technology and e-commerce, eMAG is in the best position to drive market growth in the CEE, attracting new customers online and new cross-border sellers,” Manea said in a recent interview with SeeNews.
While recent inflationary pressures were keeping customers focused on prices and promotions, online consumer behaviour saw a rise in shopping frequency, delivering an increasingly diversified shopping basket, especially in areas such as fashion, beauty, household products, home & deco, products for children and pet shop items. The swelling popularity of e-commerce is also owed to its transparency, as customers are being given the tools to compare offers from various vendors and choose what suits them best from tens of millions of offers on eMAG’s platform, Manea noted.
Fuelled by reassuring macroeconomic prospects and a growing preference for online shopping sustained by a push towards digitalisation, eMAG is in a position to accelerate e-commerce into one of the most dynamic economic areas of the EU, Manea stressed.
HIGH REGIONAL POTENTIAL
As the macroeconomic backdrop of the CEE region is encouraging, and digitalisation is an EU priority and a particular focal point of recovery and resilience funds in CEE, there is a steady growth potential for e-commerce over the next ten years, possibly achieving long-term double-digit annual growth, Manea opined.
Customers in Romania, Bulgaria and Hungary, where eMAG is targeting a population of over 35 million people, are strengthening their online shopping habits, increasingly choosing e-commerce over traditional retail, he added. Special offers, fast delivery and a mobile device usage rate of over 70% for online orders are a common denominator across these markets.
“If we compare the e-commerce share in overall retail, the growth potential is clearly there: in Romania, it represents around 10% of total retail, in Bulgaria and in Hungary at around 8% - 9%, while in other countries nearby, such as Poland or the Czech Republic, it stands at 15%, according to Euromonitor,” Manea said.
INVESTMENTS TO DRIVE FUTURE GROWTH
eMAG’s strong investments in infrastructure and technology in recent years have put the company in a position to continue expanding its regional marketplace in Romania, Bulgaria and Hungary.
“In the past two years, we have invested over 400 million euro ($435.4 million) and created a regional technology and e-commerce ecosystem that is now a direct highway to 9 million customers,” Manea said.
The company’s investments in the region's digital infrastructure have enabled small and medium-sized enterprises (SMEs) to access and scale their businesses abroad through eMAG’s marketplace, while testing the feedback from new markets at no cost or without tailor-made investments, he added.
In 2022, one of eMAG’s key focus areas was international development. To this end, the company invested about 100 million euro in Bulgaria and Hungary, six times more than in 2021. The investments targeted logistics as well as the improvement of services and diversification of the company’s offering with the help of an ever-growing number of marketplace sellers that exceeded 54,000 throughout the region.
The cross-border programme developed by eMAG enables entrepreneurs to expand their reach in the region and has undergone continuous enhancements. Leveraging technology and artificial intelligence (AI), the programme enables sellers to quickly translate their offering into the language of the targeted market when selling outside of their home market. Apart from translation, listed products also benefit from automatic price conversions into local currencies, with sellers being able to synchronise stocks of goods and prices across different markets.
Starting this spring, the company also developed the Fulfilment by eMAG (FBE) cross-border programme, which enables sellers to deliver directly from the warehouse in Romania to Bulgaria and Hungary at the same costs, Manea noted. eMAG handles all logistics, from receiving, warehousing, picking, packing, delivery, customer relations or returns, via the FBE service. The number of products included in the FBE programme has jumped by over 45% on the back of extending the FBE programme cross-border.
Following the acceleration of eMAG’s cross-border programme, over 5,000 sellers from Romania currently sell across the markets of Bulgaria and Hungary. According to Manea, the programme's results speak for themselves, as in the first half of 2023, sellers using the cross-border facility registered a 40% hike in sales for products listed in the three countries, compared to sales in their local market alone.
The Romanian entrepreneurs active in the cross-border programme also exported over 5 million products to Hungary and 3.3 million to Bulgaria during the first six months of this year, eMAG said in a press release on Tuesday. Half of these sellers are present across all three countries in the region.
($=0.9187 euro)
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