With more than 12 million monthly unique visitors and brand recognition that's riding high among the Polish public, Allegro is by far the largest e-commerce site in the country. And now it appears to have been put up for sale by its South African owners, together with its entire collection of e-commerce services.
As a result, the world's e-commerce giants are now quietly lining up to have a stab at acquiring the service that successfully beat off a domestic challenge from auction giant eBay in 2008.
It is not hard to see why owner Naspers is keen to sell off the Poznan-based Grupa Allegro, the company of which online auction site Allegro is by far the most important part. Current estimates put the value of Grupa Allegro at up to $3 billion, which is a little over twice what the South African media group paid for it back in 2008.
"They're obviously selling Allegro to cash out," Marek Molicki, regional manager of internet traffic and e-commerce analyst house Gemius, tells ZDNet.
"Naspers does generally not keep hold of companies just to have them, but usually sells them on. Apparently, they've decided now is the time to cash out. We are, however, basing that on rumors."
It is not the first time speculation about a possible sale has surfaced. There was already talk last year. However, this time around Bloomberg reported at the start of the summer that Naspers had hired Goldman Sachs to prepare a sale of their Polish subsidiaries.
Reuters later reported that firms, including eBay, Chinese giant Alibaba, and CVC Capital Partners, have even tabled bids.
Allegro was founded in 1999, inspired by the international successes of eBay, and was bought by Naspers nine years later, around the time that eBay also entered the Polish market. However, eBay's first attempt to gain a foothold in Poland failed, and its offices were closed in 2013.
According to Molicki, fending off eBay's entry shows Allegro's strength in the Polish market, even if it has made some avoidable mistakes.
He does not think Naspers has much to complain about the performance of Allegro. The service has mainly remained stable, but he isn't really surprised by that. "They're already the largest in the region, and there simply is not much room to grow," he says. "I call them the Polish definition of e-commerce: they have been here from the very beginning, they are very developed, very strong, and it is very hard to find a single Pole who has never used Allegro."
According to a report by Gemius, brand recognition among Polish internet users stands at 70 percent. Still, Molicki reckons a new influx of global companies into the $8 billion Polish market inevitable. By selling Allegro, Naspers would not have to deal with that emerging competition and would put itself in a position to focus elsewhere.
With Allegro up for sale, eBay might be tempted to seize the opportunity of a second attempt by just buying their former rivals. However, other players should be interested as well.
"It is between Amazon, Alibaba and eBay," Molicki says. "As Poland is the most developed country in central and eastern Europe, expansion from there is easiest, so it would be an investment in the whole region rather than in a single country."
With two warehouses already established in Poland, Amazon already has some infrastructure in place. Chinese e-commerce giant Alibaba is narrow favorite, according to Molicki, because it is looking to get a foot in the European door: "Yes, I know they communicated that they're not interested. But, strategically, it would be a very sound acquisition."
He points out that none of the parties, which also include the Axel-Springer backed Onet, and local player Wirtualna Polska, have been silent about their potential interest.
"Business likes silence, especially when it comes to the sale of Poland's largest e-commerce platform. They know that a bigger buzz will mean a larger valuation. And Naspers could create the buzz, but they know there are not many players who are able to afford Allegro," Molicki says.
"Their strategy has always been muted when it comes to communication, and there's no reason to change that as the attractiveness of Allegro is apparent."
Read more from Poland
- Poland wants its kids to code -- but time is against them
- Poland's heated LTE spectrum auction may be over but it's just kicked off a fresh row
- The pen is mightier than the tablet: The system that's got the write stuff for biometrics
- Amazon vs the unions: Wages go up, but are workers paid enough?
- How the blind led Warsaw to the Internet of Things