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The local shelf turns the logistics of food deliveries in Poland on its head
Approximately 35% of global online purchases are made on e-commerce marketplace platforms. Far behind them there are, among others: supermarket websites (17%) and social media (14%). The share of purchases made in the marketplace model has recorded a 500% increase since 2007, and according to ChannelX calculations, in 2027 it will be 60% of total e-commerce. Last year in China, the largest e-commerce market in the world, the share of transactions on websites operating in this model reached 80% of total e-sales.
What is a marketplace?
Broadly speaking, a marketplace is an online intermediary whose most important task is to provide a platform that allows many independent sellers to be directly connected with customers who want to buy products or services online. Basically, every marketplace e-commerce platform can be assigned to two basic categories.
Firstly, due to the type of assortment offered, secondly, due to the sales model. The first group may include horizontal sales, i.e. literally all products, from food, through household appliances, to sports equipment, or only specialized sales, e.g. electronics or clothing.
As for the second category, a marketplace can only be a platform connecting independent sellers with customers, but it can also offer its own brands together with third-party products.
Of course, a mix of models and a more detailed division are possible, but to illustrate the essence of the phenomenon, it is enough to add that a typical marketplace platform is Allegro, Amazon, eBay, Aliexpress and two other platforms from China that are gaining in popularity, i.e. Temu and Shein.
Foreign marketplace platforms have taken Europe by storm
Last year's market analysis conducted by ChannelX indicates that as many as 62% of the 100 largest stores selling online in Europe are marketplace platforms. What's more, as much as 85% of the web traffic generated by the hundred largest e-sellers leads to platforms of this type. For comparison, both single-brand online stores and online retailers attract only 7% of users each.
What is more surprising, however, is that only 40 of the top 100 European e-commerce sites are headquartered within the continent, and in total they generate only 22% of their traffic. An overwhelming 78% of visits are due to platforms headquartered outside Europe, and the largest piece of the cake in this respect belongs to large players from the USA, i.e. Amazon and eBay and the Chinese Aliexpress. Temu and Shein are also currently fighting for a strong position.
Marketplace dominance in Western and Eastern Europe, Poland at the bottom of the pack
Marketplace platforms have gained the greatest recognition in Western European markets, where they constitute 64% of the 100 largest e-stores and generate 83% of traffic. It is similar on the opposite side of the continent. Here, the share in the TOP100 is 62%, while the generated traffic reaches 85%.
The situation is completely different in northern Europe, where e-bazaars constitute only 45% of the 100 largest e-shops and generate 68% of traffic. In Poland, which is included in the eastern part of the continent, the share of marketplace platforms is the same as in the north, i.e. 45%, but they generate as much as 77% of the traffic attributed to the 100 largest shopping websites.
Who exactly deals the cards on the Vistula River?
Allegro has been by far the most important player in Poland for years, and according to the Mediapanel ranking published periodically by "Wirtualne Media" in March 2024, it attracted 19.85 million users, which constituted nearly 66.9% of all Polish Internet users. However, further places on the list of the 10 leading e-commerce platforms look interesting. The second place belongs to Him, who entered the Polish e-commerce market with a hit. At the end of Q1, the Chinese marketplace attracted as many as 14.09 million users, i.e. almost 47.5% of Polish Internet users. This is a significant increase from June 2023, when Temu was visited by 2.55 million customers, and a month later by over 3.25 million. In just over three quarters, Allegro's Far Eastern rival grew by 452%.
The Polish TOP10 e-commerce list also includes two other Chinese marketplace platforms, namely Aliexpress and the fashion Shein. Both platforms maintain a level of ownership comparable to that in mid-2023. The national leader is, of course, Amazon and several other similar players, who together make 8 out of 10 largest e-stores in Poland are marketplace platforms.
How does the development, especially of Asian platforms, affect logistics?
The only way for a parcel ordered in China to reach Europe or the USA within a few days, which has basically become standard, is air transport, and it is this that has been most affected by the dynamic growth in popularity of new digital giants such as Temu and Shein. Reuters reports that the increasingly popular model in which single shipments are sent directly from manufacturers to consumers around the world has meant that the fast fashion sector now accounts for approximately half of China's total cross-border e-commerce, and all cross-border e-commerce (CBEC) of this country has already taken over approximately one third of global long-haul air transport capacity.
The scale of the phenomenon is truly gigantic, as evidenced by the fact that Shein and Temu alone send almost 600,000 to the USA. parcels every day, and in air hubs such as Guangzhou and Hong Kong, this has led to a blurring of the boundaries between operations carried out during peak traffic and off-peak times. As a result, capacity shortages are becoming more and more common and, as a result, transport rates are increasing.
In turn, according to official data from China's Ministry of Commerce (MOC), export declarations submitted by three leading Chinese marketplace platforms at Shanghai airports in 2023 increased tenfold compared to 2022.
Analyzes conducted by Cargo Facts Consulting indicate that only the Temu platform sends 4,000. tons of air cargo per day. Shein sends 5,000 of them. tons, Alibaba 1 thousand tons, and TikTok 800 tons. That's the total equivalent of 108 Boeing 777 freighters departing from China every day! Other calculations, this time by Coresight Research, state that Shein alone, responsible for approximately 20% of the global fast fashion market in terms of sales value, generates such a huge use of transport capacity that space for other sectors using freighters is shrinking, and the situation is not helped by the continued blockade of the Red Sea.
The marketplace model powers Chinese air transport
In the long run, however, this delivery model is not the most cost-effective solution, because air transport is expensive and dedicated to the transport of microprocessors rather than toys and footwear. Nevertheless, according to analysts behind the Freightos Air Index, freight volumes generated by e-commerce platforms such as Temu and Shein are currently the main driver of strong demand, low availability and high rates for air freight from China to both Europe and North America .
In the long term, the pace of global expansion of Far Eastern e-commerce also seems unsustainable for the aviation sector. This means that long-haul freighter flights simply cannot keep up with the demand generated by Chinese marketplace platforms. In last year's market forecast, Boeing estimated that the dynamic development of Chinese e-commerce and express deliveries means that the local commercial freighter fleet will have to expand by an additional 190 machines by 2042, reaching the level of 750 aircraft. This will constitute 20% of all aircraft of this type in the world and the same percentage of all new orders for freighters, of which 925 units are needed by 2042.
In addition to high costs and the ability to meet high demand, there is another fundamental problem when it comes to using air logistics to transport online orders. Namely, while many parcels are currently leaving China, much fewer are returning.
The solution is to be warehouses located around the world and throughout Europe
It is no coincidence that also in Poland we hear more and more about the spaces occupied by e-commerce market giants, not only those from Asia, but also from the USA and regional players. However, when it comes to Chinese e-commerce, there is nothing particularly surprising in the fact that the largest marketplace platforms want to distribute from locations close to key sales markets, while limiting costs and delivery times, just like their competitors do. However, the scale of this undertaking is impressive. According to the Chinese MOC, at the end of 2023, the number of e-commerce warehouses located abroad increased to 1,800 investments, which means an increase of 200 locations in just one year.
– The impact of the e-commerce sector, including marketplace platforms, on the logistics sector in Poland is very large and extremely important for the industry. It does not matter whether the brand is sold by an American or an Asian brand, although everyone has noticed that the activity of the latter has visibly increased recently. The development of large trading platforms in Europe, including in Poland, benefited all operators who decided to meet the challenges posed by e-commerce. Last-mile deliveries, fulfillment centers and, more broadly, the warehouse market have certainly benefited greatly. Over the last few years, there has not been a single market report or quarterly summary that did not pay attention to e-commerce. These publications show, among others, that in the years 2019-2022, warehouse resources in Poland intended for entities conducting online sales increased by 84%, and in 2022 alone, 30% of warehouse resources in our country were occupied by e-commerce. Last year, e-commerce also accounted for 11% of the total market demand, and it is also thanks to it that we exceeded 32 million sq m of available, mostly modern warehouse space. This year it is expected to be 34 million sq m. Therefore, it is difficult not to notice the contribution of e-commerce to the development of logistics, which guarantees support at every stage of physical order execution – says Marek Kaniera, operational director of e-commerce at ID Logistics Polska, which provides comprehensive logistics and transport solutions, e-commerce services. commerce and supply chain management in 18 countries.
– Marketplace platforms also played a significant role in the dynamic growth of the logistics sector, and this is a direct result of the shopping preferences of Polish and European Internet users. In Europe, we simply prefer large platforms that offer payment security, greater selection, convenience, better prices and, of course, turnkey delivery logistics solutions. Due to the logistic support, this model is also chosen by sellers for whom the marketplace is a ready-made sales solution that allows them to reach completely new customers and enter new markets with very limited expansion costs and risks – says the expert.
– However, logistics service of the marketplace is not easy, especially in terms of the diversity of the assortment. At the same Internet address you can buy products requiring controlled storage temperature, electronics, but also large-sized items. However, storing them in one warehouse is not possible, so several locations are often opened for one client. When operating large platforms, order processing time is also important. What counts here is literally minutes and the ability to handle the return of goods purchased online, which is a challenge especially in the electronics and fashion category. A completely different type of challenge is the ability to cope with a huge volume of orders, counted in hundreds of thousands of pieces, and it does not matter whether they come from the American or Chinese platform, because the pressure on quality and service time is the same in both cases. At the same time, we see that the share of orders fulfilled by the latter is growing dynamically from 2023 – comments Marek Kaniera.
Marketplace platform exports are China's new national sport
The Chinese take online stores conducting cross-border trade very seriously. Not only the platforms themselves, but also the administration. According to this year's information provided by the State Council Information Office (SCIO), the official Information Office of the State Council of the People's Republic of China, the value of the Chinese cross-border e-commerce sector, both import and export, reached 2.38 trillion yuan, or approximately USD 331 billion. , which represented an increase of 15.6% y/y. Exports accounted for the lion's share of the final result, amounting to 1.83 trillion yuan ($254.4 billion) and growing by an impressive 19.6%. Imports amounted to 548.3 billion yuan ($76.2 billion) and recorded an increase of 3.9% yoy. SCIO reports that as early as July 2023, 100,000 people were involved in cross-border online trade. Chinese market entities. This is more than all online stores in Poland, of which, according to the Dun & Bradstreet Poland business intelligence agency, there were 66,000 last year.
The Chinese Ministry of Commerce openly admits that cross-border e-commerce plays a key role in China's overall foreign trade. This is not surprising, since CBEC has been maintaining growth for years. In 2020 it was 25.7%, a year later 18.6%, in 2022 only 7.1%, but last year as much as 15.6%. According to MOC's latest forecasts, the value of cross-border e-commerce, both imports and exports, will reach 2.95 trillion yuan this year, marking another jump, this time by almost 24% YoY. According to SICO data published on April 22 this year. shows that CBEC grew already in the first quarter of 2024, jumped by 9.6% year on year and reached the value of 577.6 billion yuan, or approximately USD 81.3 billion.
This growth is mainly generated by large platforms, but it does not come out of nowhere. The development of the sector is accompanied by a long-term and multi-vector strategy, including the cyclical launch of the so-called special economic zones. pilot zones scattered throughout China. These zones offer, among others: simplified business registration procedures, optimization of payment systems, taxation, customs procedures, logistics infrastructure and warehouse facilities. In the background of the dynamic development of China's CBEC, there are also other coordinated logistics solutions on land, sea and air that are intended to enable the further development of the sector. The best example of this is Silk Road E-commerce, an international economic cooperation platform created to support e-commerce as part of China's Belt and Road Initiative.
