The eMAG Group announced in a press conference on Thursday, the first in physical format in the last 2 years, the balance sheet for the 3.2 billion lei three-year investment plan, launched in 2021. In the first year, investments exceeded 1 billion lei, and in the next two years, the eMAG group will continue to invest 2.2 billion lei in its plan to transform the regional ecosystem of online commerce.
Following the investments in 2021, the eMAG group recorded a turnover of 9.57 billion lei in 2021, of which the revenues realized by eMAG in Romania represent 5.68 billion lei. Dante International SA, the company that includes eMAG Romania, Fashion Days Romania and makes sales for eMAG Bulgaria and eMAG Hungary, recorded a turnover of 7.346 billion lei in 2021.
Iulian Stanciu, eMAG Executive President said that the pandemic proved the utility of the e-commerce and that things went well for the group during the pandemic, as after the lifting of restrictions the consumer behaviour remained the same.
“In the second year of the pandemic, we decided to launch an ambitious investment program to support the transformation of eMAG into a regional e-commerce ecosystem. The results of this program are already visible, both for customers who buy more often, from a wider range of products, with faster delivery, and for the 42,000 entrepreneurs in the Marketplace. Thus, in the two years of the pandemic, we achieved an increase of over 60% in turnover, which gave us confidence to continue the investment plan with 2.2 billion lei in the next two years to provide a more Easy, faster and more affordable shopping. We continue to invest in services, in the new Genius subscription, which will be extended, from June 15, to four applications: eMAG, Tazz, Fashion Days and Freshful, but keeping the same annual price as before. We will invest in the automation of the logistics center in Joița, where we install robots that help employees increase their productivity and thus maintain low prices for customers. At the same time, we continue to invest in entrepreneurship and provide marketplace marketers with a centralized sales platform in the countries in the region where we are present, helping to grow their business in a much larger market,” said in his turn, Tudor Manea, CEOeMAG.
In 2021, eMAG investments mounted to over RON 1 billion, of which RON 128 M in Romanian technology, RON 493 M in logistics, RON 72 M in marketplace, RON 260 M in eMAG Ventures, RON 75 M in international development and RON 15 M in professional development.
According to eMAG officials, The Genius service has reached over 340,000 customers, who can choose from over 5 million free shipping products, and as of June 15, it will expand and become a subscription with benefits in four online commerce applications: eMAG, Tazz, Fashion Days and Freshful.
Due to investments in logistics for digital infrastructure, which last year amounted to 493 million lei, and the simplification of the delivery and return process, currently one of the two customer orders reaches Easybox. The network developed by Sameday will be expanded in both Romania and Hungary and will reach over 4,000 units in a year.
Investments in eMAG Marketplace in the last year amounted to 72 million lei, facilitating access to the markets in Romania, Hungary and Bulgaria for traders on the platform. In order to accelerate the development and simplify the process of international expansion, eMAG launches a centralized system of automatic administration for all three countries, which will increase the number of Romanian traders selling internationally, from 2,500, currently to 4,000 next year .
Over 260 million lei went to the development of its newest platforms: Tazz and Freshful, the online hypermarket that delivers fresh weekly shopping at home. Through eMAG Ventures, the company has invested a total of 8.5 million euros in the development of Flip, a promising business in the circular economy and in Atlas, a medical services platform that focuses on telemedicine.
Romanians’ trends on online shopping
Romanian consumer behaviour have changed during pandemic, the eMAG representatives say, focusing more on indoor, home deco and beauty products in the first year of the pandemic, and then shifting more in the first months of 2022 towards outdoor (home and gardening items) smartphones, gadgets, smartwatches, bicycles and other products destined to outdoor activities. Fashion items are also more sought after once people started to go to work or to attend events, while TV and home appliances sales have stalled in the first months of 2022.
eMAG also says that there are gaps in certain product categories, especially those that contain electronics and incorporate semiconductors, and this is because there are many areas in China in lockdown, but they countered by having larger stocks than in 2020, in as many categories as possible.
“As soon as the war started, we noticed an emotional impact, the demand for durable goods decreased, people said to themselves: let’s see what happens. After about a month – a month and a half, the emotional impact diminished and people resumed their buying habits”, Iulian Stanciu said.
However, risks may be persisiting in future, a risk of inflation or risks of international context, as Stanciu pointed out. For instance, eMAG decided to be cautious and postponed expansion into a new country (which was not nominated). ” There will not be any recession in the upcoming period, on the other hand we cannot foresee either what will happen in one or two years. However, we took turbulence into account. For instance we postponed certain investments, we wanted to expand in another country, but postponed expansion, we are more cautious as usually and we make sure we have better stocks,” Stanciu concluded.