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The e-commerce market in Poland experienced exceptional growth due to the pandemic situation. The unprecedented switch to remote working greatly increased Poland’s digital skillset, and restrictions on the ability to conduct in-person shopping, further bolstered a change in Poland’s consumer habits.
E-commerce growth is driven by easy and affordable access to the internet through multiple tools, comfortable online purchasing platforms, and customer-friendly regulations. The pandemic situation stimulated buyer’s interest, which in turn accelerated the development of new e-commerce initiatives, especially enhancing the focus on customers service and automation of processes, including application of artificial intelligence (AI).
In 2020, e-commerce grew by 35%, compared to a 16% growth rate in the previous year. According to PwC analysis, the value of the market reached a total of $26 billion in 2020. The market is expected to experience an estimated 12% year on year growth for the next five years and is expected to reach $42.3 billion in 2026. In 2020, Poland’s online sales totaled 14% of all retail sales, which was significantly lower than the EU average. In the first quarter of 2021, when shopping centers reopened, online sales declined to 9.5% of the retail sales. However, in 2026, e-commerce is expected to account for 20% of all retail sales.
The B2B e-commerce segment also experienced dynamic growth in 2020, reaching an estimated $90 billion. In Poland, 84% of B2B companies sell online, though 79% of these companies generated less than 10% turnover through their online sales.
Assessment of Current Buyer Behavior in Market
The main drivers for online shopping remain unchanged: 24/7 access, convenient payment and delivery conditions, including returns. In addition to increased interest in e-commerce due to the pandemic, online shops continue to benefit from Poland’s retail shopping being severely restricted on Sundays.
According to the Polish Statistical Office, 90.4% of all households, and 99.5% of households with children, had internet access. Of these, 67.7% used fixed broadband access and 66.7% had mobile access, which was an increase over the 2019 figures, 86.7%, 62.3% and 54.3% respectively. In 2020, approximately 83% of Polish internet users shopped online, a 10% increase over the previous year, but still below the EU average which exceeded 90%.
The most active group of buyers live in large cities or villages and are 29-49 years old. More than 70% of Polish buyers use price-comparison services, and the average e-consumer spends an equivalent of $80 a month.
Polish e-consumers appreciate local e-commerce solutions, such as Allegro and local shops, and a majority of online shopping is still done locally. Cross-border online shopping currently accounts for 30% of all transactions and continues to grow, thanks to customer-friendly regulations and decreasing delivery cost.
The most popular categories of online purchases are clothing and shoes, which represented 44% of all e-commerce sales in the first quarter 2021. Other popular categories included books and media, furniture, consumer electronics and home appliances, and cosmetics. The fastest growing segments of the e-commerce market are grocery sales and a variety of home delivery services from restaurants and convenience shops.
Delivery preferences, such as retrieving packaged from parcel lockers and courier services shifted during the pandemic, and now door-to-door courier services have become the preferred delivery option. In addition to parcel lockers, e-commerce platforms often offer drop/pick-up parcels at shops and retail stores.
Poland’s preferred payment methods are the mobile BLIK payments (30%), fast transfer through payment services (27%) and credit card payments (21%). Cash-On-Delivery (COD) payments are rarely used in Europe, compromising of only 6% of e-commerce transactions.
Local eCommerce Sales Rules & Regulations
There are no barriers to conducting electronic commerce activities in Poland, but American companies should consider the EU’s strict personal data protection regulations and tax issues. Polish regulations are based on the European Union e-commerce rules.
In December 2020, the EU Commission adopted a proposal for a Digital Services Act (DSA), which combined with the Digital Markets Act (DMA) aims to create a safer and more open digital space for all users and ensures a level playing field for businesses. DSA will address changes, particularly in relation to online intermediaries, in the e-Commerce Directive, which was adopted 20 years ago.
New VAT rules for online sales of goods and services entered into force on July 1, 2021 in the EU countries, including Poland. The EU VAT e-commerce package tightens the tax system. It eliminates the VAT and custom duty exemption for shipments of the value below 22 Euros. The regulations also introduce the Import One Stop Shop (IOSS) procedure for processing VAT payments for packages not exceeding 150 Euros in value. Non-EU sellers, including e-commerce platform acting as intermediaries, are now responsible for collecting VAT and reporting it to EU authorities appropriately. This could be done by the established entity in the EU or through appointing a representative responsible for VAT processing in any of the EU country. For sales exceeding 10,000 Euros to non-VAT registered EU buyers, the seller must collect VAT for all deliveries to EU countries.
Local eCommerce Business Service Provider Ecosystem
In the first quarter of 2021, there were more than 44,500 registered online shops, an increase of approximately 70% over 2019. Interestingly, while 11,800 new e-stores opened in 2020, at the same time 5,600 suspended operations and over 4,000 were subsequently permanently closed.
Before COVID, only 5% of small companies had end-to-end online operations and 46% of them had limited online presence. At present, a majority of small companies have added online channels or are planning to do so. The same trend applies to all categories of retail chains, which are currently active online.
The trend to establish omnichannel sales started in 2018, rapidly accelerated during the pandemic in an attempt to gain customer loyalty. E-commerce providers constantly enhance customer service, developing a personalized approach to customers, often with the use of AI solutions, and focus on improving and streamlining product delivery options.
The most popular e-commerce player in Poland, in all product categories, is Allegro, which had more than 36% market share in 2020. On its platform Allegro currently hosts approximately 125,000 business sellers and offers its own retail lines. In early 2021, Allegro expanded its B2B operations, offering corporate customer discounts, rebates for large orders, and deferred payment terms.
Initially established as an auction platform, Allegro changed its business model and expanded over the time. The Allegro Group currently also owns a popular price comparison service, Ceneo, the second most popular e-commerce portal. In 2020, Allegro established its presence on the Warsaw Stock Exchange, and the company’s net sales increased by 54.2%, reaching more than $1 billion. At the end of 2000, the company had 13 million active buyers, a 14% increase over the previous year. Allegro’s investments are expected to increase from $60 million in 2020 to a minimum $130 million in 2021.
For years, AliExpress was the most popular foreign e-commerce platform in Poland. Buyers, attracted by exceptionally low prices, accepted long delivery terms and lack of accountability for transactions. In most cases, the products were shipped as low-cost, not taxable purchases. The new VAT regulations, which case into enforced on July 1, 2021 are expected to eliminate unfair competition from this source.
In 2020 Amazon’s market share in Poland was less than 5%, as the company’s Polish-language version
of its German platform was not very popular among Polish buyers. Amazon focused on developing logistics centers, which are located throughout the country, to serve the needs of domestic market and neighboring countries. In early March 2021, Amazon launched its long expected fully functional Polish platform Amazon.pl. The company invites local sellers to sell on the Amazon platform, both on the internal market in Poland and on international markets. Their logistic support for sellers is seen as Amazon’s strongest competitive advantage.
It is yet to be seen how Amazon’s entry will change the landscape of the Polish e-commerce market but there is no doubt that major changes will occur. Online shops have yet to make a decision if they will stay on the Allegro platform, move to Amazon, or maintain a presence on both channels.
In general, smaller e-commerce platforms in Poland are eager to work with foreign suppliers and sell their products online. Nevertheless, many limit their suppliers to European sources, especially after the new e-commerce rules were introduced on July 1, 2021. Small companies have limited experience in dealing with suppliers from the United States and provide limited logistic support, if any.
Approximately 30% of Poland’s ecommerce companies outsource their logistical operations. In addition to large international logistic companies, there are many local specialized providers serving the e-commerce market, including consulting, logistics, digital marketing and other e-commerce-related services. A list of business service providers is available on request.
E-commerce is a main contributor to the rapid growth of logistics operations, accounting for more than 60% of the warehouse space used by retail chains and logistics operators. According to CBRE, the demand for warehouse space in Poland reached 3.3 million square meters in Q1 2021, an increase of 36% compared to the same period in 2020, and another 3.1 million square meters of space is currently being built. Poland is a central hub for several e-commerce operations serving Western European countries.
Useful contacts in Poland:
- Digital Affairs – Chancellery of the Prime Minister
- Ministry of Economic Development, Labour and Technology, Digital Economy Department
- Chamber of Electronic Economy
- Ministry of Finance, Tax Administration
- Local events in Poland: InternetStandard, eTrade Show, E-Commerce Fair
For updated information on events, please check events’ websites or contact: email@example.com.