(Reuters) – Polish e-commerce platform Allegro is moving forward with expansion plans and building its own parcel lockers network, its chief financial officer said after the company’s second-quarter results beat forecasts.
Founded more than 20 years ago as a home-grown rival to eBay, Allegro saw a sales boost last year as the pandemic accelerated the shift to online shopping and consumers relied on e-commerce for their everyday needs.
Its second-quarter net profit jumped 59.9% to 295.9 million zlotys ($77.2 million), topping the 286 million zlotys expected by analysts, despite the easing of pandemic-related restrictions and intensifying competition.
“The (expansion) strategy has several elements. The first one is organic. We want to be able to export from the Polish website. We’re working also on having the English version of the website available. Those projects are moving forward,” CFO Jon Eastick said in a post-earnings interview with Reuters.
He said Allegro has signed a deal to deliver offers for merchants to ship to European Union countries, but added there was nothing concrete on potential mergers and acquisitions.
Eastick added that the roll-out of 1,500 parcel lockers planned for this year was ramping up well. The first deliveries are set for the autumn.
Allegro’s dominant position in Poland is being put to test following the entrance of online retail group Amazon and more companies building their own parcel locker machines.
Eastick said, though, the company has seen a limited impact from Amazon.
“There is more competition from the market generally since the economy reopened in May but the new entrants are not the source of that, it’s the established players that are fighting for market share.”
Allegro improved terms for shoppers and third-party sellers during the COVID-19 pandemic, as more consumers shifted online. Its SMART! subscription programme helped revenue increase 28.4% to 1.31 billion zlotys in the quarter.
The company gets most of its revenue from its marketplace, but its ad business has been growing the fastest, jumping 39.5% year on year to 32.1 million zlotys
It also expects to boost revenue with new offerings, including a network and logistics service for sellers, Allegro Fulfillment and payments service Allegro Pay.
The company, whose website is attracting 21 million visitors a month, confirmed its outlook for 2021.
($1 = 3.8342 zlotys)
(Reporting by Anna Pruchnicka; Editing by Kim Coghill, Amy Caren Daniel and Emelia Sithole-Matarise)