Industry Insight

E-Commerce developments in Poland

The rapid growth in e-commerce makes Poland the focal point in Europe

The coordinates are shifting. If Western Europe was still the epicentre for e-commerce a few years ago, the online retail sector is moving further and further east. Poland is now one of the most popular centres. Turnover there has increased by an enormous 30 percent just in the last few years. What are the reasons for this? We want to discover what has been happening.

The COVID-19 pandemic has once again changed shopping habits drastically and e-commerce has advanced to become one of the most rapidly growing sectors in the world. This development is being felt in Poland too. Germany's neighbour has now become the leader among the fastest developing e-commerce markets in Europe. If turnover was still EUR 10.6 million in 2020, it is estimated to be about EUR 12 million in 2021. Forecasts from the Statista Global Consumer Survey suggest that the figure will be EUR 15.9 million by 2025. That would represent annual growth in turnover of 7.3 percent.

A miracle with a message

According to experts, the “Polish online miracle” is not just a domestic success story, but has two important external reasons. Firstly, the country now has what is very well-developed infrastructure and this is attracting online retailers to Poland from all over Europe. Warsaw has significantly upgraded its road and rail networks during the past few years with a large-scale infrastructure programme and numerous industrial parks have been built too. “There are about 20 million square metres of modern warehouse space available now1 ,” say Rhenus experts. Another 1.9 million square metres are being constructed2. This means that Poland is in eighth position in Europe. One quarter of the available space is already being used by the e-commerce sector – and this figure is expected to rise.   

The second reason should not be underestimated either: Poland can offer a huge reservoir of workers – with wages that are more than competitive compared to those in Western Europe. “It’s more attractive for companies to invest in their workforces than in automation, particularly in the warehousing sector,” experts from the logistics specialist, Rhenus, say – and point out that Poland is also one of the largest centres of worker immigration from countries located further east like Ukraine. This means that there are enough people available to work, even at peak periods. Brands like Zalando or Amazon, which have established huge distribution centres in the country, are benefiting from this.

The market and opportunities are attracting companies to Poland

Large companies in Western Europe in particular are already stretched to the limit. “Poland offers an attractive alternative,” is the saying doing the rounds in the logistics sector. First of all, the local market with 28 million online shoppers is attractive3. According to current statistics, they primarily order clothes and this is closely followed by home electronics, cosmetics and books. Secondly, the cross-border e-commerce segment, so-called cross-border online sales, is a major force there, powered mainly by European companies. Large logistics specialists are benefiting from this; Rhenus, for example, has significantly expanded its capacity and is now operating four warehouses in Poland.  

If the key question in the past was whether and how an increase in volume could be handled using traditional structures, the problem today is very different. While health experts are discussing the length of the pandemic and the restrictions associated with it, economists are arguing about how quickly traditional structures and supply chains can recover once again. What can be done to safeguard online market shares that have been gained and expand them during the post-COVID-19 period? And is it possible at all to plan for the longer term in the face of these kinds of uncertainties?

Organic growth has come to an end

The sector knows that the retail trade was still able to rely on organic growth just a few years ago. “But those days are over. We now have to adapt to unforeseen, short-term market fluctuations, particularly in the online business. Customer requirements are increasing at the same time,” says Marta Kunikowska, Marketing Manager at Rhenus Logistics in Poland, expressing her view of the situation. The logistics specialist is supporting several large companies in Poland. Rhenus has not only had to complete the expansion of its warehouse capacity during ongoing operations, but also put in place an extended reliability concept. The issue of trust placed in the logistics company has become a much more important priority during the pandemic.

The approach that Rhenus has selected is two-fold. First of all, there are the COVID-19 tests, which are even used before hiring seasonal workers. However, providing the personnel with adequate training is just as important. “Communicating experience safeguards quality,” Kunikowska says. “That’s the only way of creating a “premium-quality packaging”, i.e. achieving the perfect packaging for a high-class product by using the correct packing process.

“These kinds of attractive solutions are popular with customers, particularly in the fashion and cosmetics sectors,” the Rhenus Warehousing expert emphasises. And if customers have not received the right product on one occasion, even the return process can become an exciting experience if the right measures are used. “When it comes to shoes, for example, people don’t have the opportunity of finding the right size in a shop during the pandemic. We’re handling this business to the satisfaction of our ordering party and final customers too.” 

New communications create new sales paths

Precise, customer-friendly work performed by the logistics specialists not only helps manufacturers gain greater coverage and attract new customer groups. The online platforms in particular are those that need and welcome this new flexibility. “New ways of communicating are creating new sales paths,” is the saying in the sector, because platforms like Zalando or the family shopping provider, Limango, are increasingly developing into a market-place model.  

However, it is precisely the logistics specialist that is increasingly handling customers’ orders and in the end plays its part in determining whether a sale is a positive customer experience or not. “Providers and customers are moving closer together through the logistics specialist. The customer experience is extremely important, particularly with e-commerce,” says Kunikowska. To express it differently, a positive customer experience creates some emotional bonding. This can be a crucial competitive advantage at a time when changing brands was never so simple. 

A question of trust

Almost three quarters of German online shoppers say that their decision about which item to buy hinges on the company that will ship the product. The situation is similar in Poland, if not quite so drastic, as insiders are aware.

„Here in Poland, the COVID-19 pandemic has significantly accelerated developments in the retail sector towards e-commerce. And this development will no longer be reversed, because the online retail trade has arrived at the centre of society.“
Paweł Nowak | Branch Manager at Rhenus Poland

And the statistics back him up: according to figures from the Polish Statistics Office, 35-to-49-year olds and residents of large cities in particular use the Internet to do their shopping. “E-commerce is increasingly the only opportunity for the retail trade to still do any significant business at all. The retail sector needs this digital foundation,” says Nowak, “and it needs logistics partners to handle this in a customer-oriented manner.”

Short distances, good cooperation

The largest market segment in Poland is the fashion sector, which will probably generate EUR 5.7 million in 2021. At the same time, fast-moving consumer goods, i.e. food and drugstore products “right down to nappies”, are developing in a particularly dynamic way,” says Branch Manager, Nowak. In his view, this trend can also be traced back to the fact that customers are increasingly appreciating the excellent cooperation between retailers and firms making the deliveries. 

Word has got out – abroad too. According to sector data, half a dozen new warehouses have been set up in Poland in a short time. Short decision-making processes in the country combined with short delivery routes to neighbouring countries like Germany, Slovakia, but also to the Baltic States and even to Scandinavia have catapulted Poland to the forefront in the e-commerce sector. Nowak, who has experienced this development first-hand at Rhenus, is not surprised.

„This has not only made us the top European country, but – viewed from a logistical point of view – has even made Poland the focal point in Europe.“
Paweł Nowak | Branch Manager at Rhenus Poland

Interested in even more e-commerce?

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For this article there are 1 Comment


20/04/2021 - 14:08

A very interesting article with good insights!

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