Facing a threat from Amazon? Allegro acquires Czech e-commerce Mall to strengthen its position

Recently, Polish e-commerce company Allegro announced on its official website that it has acquired Czech e-commerce platform Mall Group and logistics company WE DO for 881 million euros (about 10.18 US dollars).

It is understood that Allegro Group operates an e-commerce platform Allegro and a price comparison platform Ceneo in Poland. Allegro is the preferred e-commerce platform for Polish consumers. The platform sells various products, including electronics, home and garden, sports and leisure, automobiles, clothing and shoes, etc.

The Czech e-commerce platform MALL Group has more than 4,000 employees and serves 130 million residents in Central and Eastern Europe. In 2020, it delivered more than 14 million orders to customers. In the 2021 fiscal year ending in March this year, Mall Group's GMV was 4.3 billion zlotys (about US$1.08 billion) and its gross profit margin was 14%.

Logistics company WE DO works with 300 express delivery companies and operates 1,000 pickup points.

Allegro said the merged company operates in the Czech Republic, Slovakia, Hungary, Slovenia, Croatia and Poland, targeting 70 million consumers with a consumption scale of 1.1 trillion zlotys (about 276.7 billion U.S. dollars).

Currently, the transaction is still awaiting antitrust approval from relevant countries and is expected to be completed in the first half of next year.

Reuters analysis said that the deal was made amid increasingly fierce competition in China and Europe. Allegro's stock price has fallen by more than 40% this year due to fierce market competition. Influenced by the news of the deal, Allegro's stock price has rebounded slightly.

Last month, Amazon announced the launch of Amazon Prime in Poland, offering free shipping and video streaming services. Amazon said its Prime service in Poland will be priced at 49 zlotys (about $12.35) per year, and will provide free shipping for orders over 40 zlotys. The news caused Allegro's stock price to fall 3.7%.

In addition, in September this year, the Shopee.pl website domain was purchased, and Shopee officially entered the Polish market. For Polish sellers, Shopee will waive their sales commission for the first six months and provide free delivery services to buyers and sellers; in addition, it will provide 250 zloty coupons to some active sellers in Poland. Shopee's entry into Poland has also dealt a blow to Allegro.

Some analysts said that Mall Group's operations in a low-penetration and fragmented market will boost Allegro's growth.

Allegro

Acquisition

Europe