Keep calm it's only a (r)evolution in e-commerce

I read the article in Forbes accompanying the ranking of the most valuable Polish e-commerce companies and I was surprised that an opinion-forming magazine asks such surprising questions already in the title "The Internet has lost its charm?" Although this is not a question directed at me, I will be happy to answer.

Already at the beginning, we read that "After a few years of rapid growth, the e-commerce sector has slowed down a bit. This is visible in the lower valuations of the largest companies in the industry, with Allegro at the forefront. In e-commerce, we have braking.”

E-commerce in Poland has grown very steadily over the years.

In 2013, the value of the e-commerce market in Poland was approximately PLN 24 billion.

In 2019, this value doubled and reached PLN 50 billion.

It is worth adding that in 2019 there was a decline in growth dynamics (20.7%) compared to the previous two years, when it amounted to 28.0% in 2017 and 22.9% in 2018.

In 2020, the world stopped, but not e-commerce. In Poland, its value doubled in a year and increased from PLN 50 billion to PLN 100 billion in 2020.

What happened within a year was what previously took 6 years. Probably if it weren't for great logistical problems, this value would be even higher. The following years saw much slower growth.

What caused this slowdown?

- return to natural growth after the supernatural growth caused by the pandemic and related restrictions, among others. in traditional trade

- since 2021, we have recorded a sharp increase in inflation in Poland, which reached its peak in February 2023 (18.4%) - the last time we had such high inflation in Poland was in... December 1996.

- there has been a war in Ukraine since February 24, 2022 However, these events affected not only e-commerce but the entire economy.

E-commerce, although much slower, is still growing.

So, to answer the title question from the Forbes editor - no, the Internet has not lost its charm, it is doing quite well and there is no indication that it will lose it.

According to Statista, it is expected that by 2027 the value of the market will increase to 150 billion zloty.

It is worth noting, however, that the trend described in the cited article does not have to change, even despite the change in the economic situation in Poland, Europe, and the world.

Why?

Among others, Gen Z is buying more and more often on the Internet and especially they like TokTok. Today, this applies primarily to the clothing industry, and partly also to broadly understood beauty, but as various studies show, it will probably not end there. For example, the CGS report reports that Generation Z is moving away from marketplaces such as Amazon.

Only 37% of them say they will shop there. It's hard to believe that this won't affect other marketplaces (like Allegro), i.e. large online stores like those listed in the Forbes ranking.

And while Amazon is fighting as hard as it can (and as the largest - yet - a global player in e-commerce, maybe a lot) by entering into partnerships with platforms where Gen Z is present, local players (and this does not only apply to Poland) may have a problem. They can, but they don't have to. Of course, these changes will not happen overnight, but they are already concrete and noticeable.

The challenge for manufacturers is to sell here and now, and in a much more personalized way than ever before. For e-retailers, it is a challenge to maintain traffic, which may be more difficult not only due to the behavior of Gen-Z but also, for example, the expected change in traffic (-25%) from search engines (this topic, especially in the context of Generative Search Experience (GSE) deserves a separate comprehensive article).

Changes in the value of enterprises, including those related to e-commerce, are not surprising, or rather completely expected. Online business is subject to the same economic laws as any other business, with the difference that in many cases it is much easier to achieve a pivot.

And I am more than sure that these pivots will be forced by demographics.