eCommerce EVERYTHING
You liked $MELI $SE $SHOP $AMZN $BABA ?
Here is the LEADING Polish eCommerce platform
GROWING at 50% YoY and PROFITABLE
Here is an EASY thread
You liked $MELI $SE $SHOP $AMZN $BABA ?
Here is the LEADING Polish eCommerce platform
GROWING at 50% YoY and PROFITABLE
Here is an EASY thread
$ALE (WSE) is a Polish e-Commerce platform It was founded in 1999 and is the leading online shopping destination for Polish consumers
The platform counts 12.6m buyers, 117k active professional merchants and had a GMV of $ 5.6B in 2019
The platform counts 12.6m buyers, 117k active professional merchants and had a GMV of $ 5.6B in 2019
eCommerce in Poland
Poland counts 38m inhabitants and it the largest economy in Central And Eastern Europe
GDP Is growing FAST at around 2.5 to 5% a year versus an EU average of around 1.5%
Poland counts 38m inhabitants and it the largest economy in Central And Eastern Europe
GDP Is growing FAST at around 2.5 to 5% a year versus an EU average of around 1.5%
The e-Commerce market is still little penetrated in Poland as online sales only make up 8% of total retail sales while it stands at:
12% in Germany
15% in the USA
18% in the UK
27% in China
12% in Germany
15% in the USA
18% in the UK
27% in China
According to OC&C, e-Commerce sales are set to reach PLN 118B by 2024 up from PLN 52B in 2019 Representing a CAGR of 18%
According to Statista, sales in the Polish eCommerce market are set to reach $ 18B by 2025 up from $ 12B in 2020 Representing a CAGR of 8.4%
According to Statista, sales in the Polish eCommerce market are set to reach $ 18B by 2025 up from $ 12B in 2020 Representing a CAGR of 8.4%
Allegro's position
Allegro is the leading eCommerce platform in Poland with a GMV (ex. second hand items) of PLN 23B versus PLN 2B for AliExpress (next best)
20m internet users in Poland visit Allegro every month
Representing 63% of the Polish population (age +16)
Allegro is the leading eCommerce platform in Poland with a GMV (ex. second hand items) of PLN 23B versus PLN 2B for AliExpress (next best)
20m internet users in Poland visit Allegro every month
Representing 63% of the Polish population (age +16)
How is Allegro achieving this N°1 Position? Well, they focus on getting the basics DONE
Large selection with more than 160m offers
Competitive on price with 80% of products at lowest price point in market
Large selection with more than 160m offers
Competitive on price with 80% of products at lowest price point in market
Speed with 75% of products delivers within 48 hours
Resulting in a NPS of 72 while $SBUX got 77 and YouTube 59
Resulting in a NPS of 72 while $SBUX got 77 and YouTube 59
Similar to $AMZN Prime, Allegro offers a subscription program called “Smart”
Guaranteeing free delivery and returns
Offering better deals and shopping events
Smart members order 2.5 time more than non-Smart customers
Guaranteeing free delivery and returns
Offering better deals and shopping events
Smart members order 2.5 time more than non-Smart customers
Financial Check
Gross Merchandise Value (GMV) reached PLN 8,253m in Q3 ’20 up 49% YoY
Sales reached PLN 929m in Q3 ’20 up 50% YoY
Active buyers reached 12.6m, up 13% YoY while GMV / Active buyers increased 28.4% YoY
Gross Merchandise Value (GMV) reached PLN 8,253m in Q3 ’20 up 49% YoY
Sales reached PLN 929m in Q3 ’20 up 50% YoY
Active buyers reached 12.6m, up 13% YoY while GMV / Active buyers increased 28.4% YoY
Adjusted EBITDA reached PLN 409m in Q3 ’20 up 27% but EBITDA margins decreased to 44% (down from 52% a year earlier)
What’s next for Allegro?
Allegro Pay was introduced for Beta testing during H2 2020
It is Allegro’s own “Buy Now Pay Later” tool that enable users to pay within 30 days at 0 interest rate
Allegro Pay was introduced for Beta testing during H2 2020
It is Allegro’s own “Buy Now Pay Later” tool that enable users to pay within 30 days at 0 interest rate
Allegro Fulfilment is coming to life with 1 new distribution central near Warsaw
Allegro is also testing out with lockers network to ease the delivery of goods
Allegro is also testing out with lockers network to ease the delivery of goods
“We have identified as one of our tactical developments that we want to have the competence and the capabilities to roll out our own lockers,” CFO Jon Eastick https://in.reuters.com/article/allegro-results/update-1-polish-e-commerce-group-allegro-to-pilot-own-parcel-lockers-idUKL8N2IC1KI
What about Allegro as an investment?
According to the Financial Times, Allegro has a revenue (TTM) of PLN 3.5B and a market cap of PLN 85B
Sales are growing at 50% YoY and company has EBITDA margins of 44%
According to the Financial Times, Allegro has a revenue (TTM) of PLN 3.5B and a market cap of PLN 85B
Sales are growing at 50% YoY and company has EBITDA margins of 44%
How does that compare?
$ALE Allegro has a PS of around 25 with sales growth of 50%
$SE has a PS of 25, sales growth of 178%
$MELI has a PS of 24, sales growth of 85% (and 149% in local currency)
$OZON has a PS of 6.5, sales growth of 70% and GMV growing at 152%
$ALE Allegro has a PS of around 25 with sales growth of 50%
$SE has a PS of 25, sales growth of 178%
$MELI has a PS of 24, sales growth of 85% (and 149% in local currency)
$OZON has a PS of 6.5, sales growth of 70% and GMV growing at 152%
THE BOTTOM LINE
It is the absolute eCommerce leader in Poland with 63% of the Polish population visiting its website
It is taking all the right steps to become a future-proof player: building it payments solution, logistical infrastructure and advertising solutions
It is the absolute eCommerce leader in Poland with 63% of the Polish population visiting its website
It is taking all the right steps to become a future-proof player: building it payments solution, logistical infrastructure and advertising solutions
The company is already profitable, growing at a steady rate and locking in customers with subscription offerings
Its current valuation is rich and places it in the same league as $MELI and $SE
Its current valuation is rich and places it in the same league as $MELI and $SE
Can be explained by the stable political climate, adherence to the EU, growing GDP and profitable operations
International potential is more constrained as Germany is crowded and http://Wildberries.ru (eCommerce player from Russia) entered Poland https://www.reuters.com/article/wildberries-poland-idUSL8N29E1X5
International potential is more constrained as Germany is crowded and http://Wildberries.ru (eCommerce player from Russia) entered Poland https://www.reuters.com/article/wildberries-poland-idUSL8N29E1X5
We stay on the sidelines for now and will enter if valuation doesn’t stretch further while sales grow considerably
$EMBRAC is on our watchlist To Be Reviewed SOON
$EMBRAC is on our watchlist To Be Reviewed SOON
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ Reuters
✑ Statista
✑ eCommerceGuide
✑ Financial Times
✑ Cashless PL
Sources
✑ Investor presentation
✑ Company website
✑ Reuters
✑ Statista
✑ eCommerceGuide
✑ Financial Times
✑ Cashless PL
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