Ecommerce in CEE: hot developments to watch

Date : 22 September 2015

We round up some of the latest ecommerce developments to watch from the region’s leading retailers including advancements in Poland, Romania and Hungary; Agrokor’s strategic online project and what’s happening in click & collect.




This article was written by Harriet Cohen, Senior Retail Analyst in IGD's international research team. Harriet is responsible for contributing to IGD's research into Northern & Central Europe and regularly travels to markets in the region. She brings five years of experience working for leading UK retailers to IGD. To learn more about how IGD's research can benefit your business further, please get in touch. 
@RetailAnalysis

Poland: retailers at varied levels of advancement

Tesco Poland, which has operated an online grocery service for three years, has reportedly revealed that the number of stores offering online delivery has doubled to 27 stores, while delivery vans have increased threefold. The retailer’s average basket online is four to five times higher than traditional bricks and mortar stores and is continuing to rise every year.

The majority of Tesco’s orders in Poland are placed on desktops and laptops, with only around 9% of online orders placed on mobile devices. Comparatively, in the UK, IGD Shopper Vista Channel Focus research shows that laptops are the most popular device used for online grocery shopping, with 64% of shoppers using this method in the last month between May and July 2015. Desktops, meanwhile were used by 28% of shoppers, while tablets have become increasingly popular, used by 28% of shoppers.

Carrefour’s online grocery service is less advanced than Tesco, with the retailer reportedly trialling home delivery to customers of its upmarket convenience stores in Warsaw. Shoppers need to spend PLN 150 (€36) to be eligible for delivery within 24 hours. Competitor Auchan also offers home delivery to Warsaw and its suburbs.

In addition, pure play online retailer, Frisco.pl offers free online delivery on a range of 15,000 items in the area. In December 2014, Eurocash purchased 44% of Frisco.pl, allowing the online retailer to utilise Eurocash’s warehouse facilities and expand its delivery service across the country.

Elsewhere in the market, Zabka has partnered with courier company, Tba EXPRESS to introduce 4,000 nationwide in-store collection points for online orders by November. Shoppers will be able to collect their online orders daily between 06.00 and 23.00, with a next day delivery service also available.

Meanwhile, Intermarché’s new Polish concept store allows shoppers to collect online orders in-store or at a dedicated Drive facility. The retailer is said to be planning the expansion of online shopping across all of its Polish stores within the next three years.

The Balkans: Agrokor’s strategic online project and new Serbian online service

Earlier this year, Croatian conglomerate Agrokor, which owns the Konzum and Mercator grocery chains, alongside other food oriented businesses announced that it was launching a new strategic online project, A007 in a bid to become the leading online retailer in the region. The project will reportedly operate as a regional version of Amazon or Alibaba according to Mate Krpan, CEO of Agrokor’s IT business and is expected to launch later this year or early next year. Ivica Todoric, President of Agrokor has advised this could potentially become the most valuable part of Agrokor and is an important factor in its future growth.

Agrokor is already one of the most advanced ecommerce retailers in the Balkans. In Croatia, Slovenia and Bosnia-Herzegovina, it is the only modern retailer to offer an online grocery service. Agrokor has also recently launched online grocery in Serbia’s three largest cities; Belgrade, Niš and Novi Sad. Competitor Delhaize already offers a service in the market.

The progress Agrokor has made in integrating the Konzum and Mercator businesses, including the ‘exchange of best practice and know-how, logistics processes, and negotiations on competitive purchasing terms’, alongside improved performance at Mercator should free up time and resource to focus on developing and enhancing its overall online grocery offer, as well as the A007 project.

Romania: Carrefour relaunching online platform as Cora introduces home delivery

Carrefour is relaunching its online grocery platform in Romania, with features including an improved interface with an emphasis on mobile devices, same day-delivery and improved search engine, navigation and product photographs.

Elsewhere in the market, Cora has introduced a delivery offer to provide shoppers with a wider range of fulfilment options. The service is provided by logistics firm TNT, with a delivery charge of RON15 (€3.40). Shoppers can choose from over 14,000 products, while deliveries are available between 14.00 and 21.00 on weekdays and 12.00 and 16.00 on Saturdays.

Hungary: Auchan set to launch online this year

In neighbouring Hungary, General Manager Dominique Ducoux has revealed that Auchan will launch an online service this year, although further information has not yet been provided. Currently, Auchan offers online grocery in other European markets, including France and Poland.

Competitor Tesco already operates a comprehensive online grocery service in Hungary, delivering to key cities including Budapest, Szeged, Gyor and Székesfehérvár.

Click & collect: less advanced than western Europe

While a growing number of retailers operate in online grocery, many don’t yet offer click & collect as part of the service. An exception is Tesco, which offers click & collect in Poland, Hungary, the Czech Republic and Slovakia; although advancement levels vary by market.

Poland is Tesco’s most advanced market for click & collect in the region. It is available at 27 sites, including multiple locations in Warsaw and Krakow, while in Hungary, the service is only currently available at a small number of stores.

Initiatives to support click & collect

In the Czech Republic and Slovakia, where Tesco also offers click & collect, it ran a seasonal promotion to encourage shoppers to use the service and drive average basket . In the Czech Republic, for example, Tesco offered a special collection price of CZK 1 (€0.04) at its two collection sites. In Slovakia, meanwhile, for every €20 transaction using click & collect, pick up was free and shoppers were rewarded with free ice-lollies at collection sites.

Agrokor also offers click & collect in Croatia and Bosnia-Herzegovina while S Group offers the service in Estonia, in partnership with foodie.fm.

Conclusions: online key to growth; Tesco, Agrokor and Poland lead the way

Across the region, it is evident that retailers are at varying stages of development, although many key retailers are prioritising investment in the channel as they look to drive growth, generate competitive advantage and better meet shopper needs in the future.

Central and eastern Europe’s online grocery services are still less advanced than western Europe. Tesco remains one of the more forward-thinking retailers in the region, with its online service likely to be enhanced by best practice shared from its UK operations. Agrokor also remains a key player to watch as the only modern grocery retailer to operate an online service in multiple markets, while we wait with interest to hear more about its innovative online project,  A007.

Poland is one of the most developed markets for online grocery retail in the region, with multiple retailers operating or trialling an online grocery service, although more work is needed to offer a fully consolidated service.

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