2020 ESG

Business model: the retail flywheel

Allegro’s operations rely on a model known as the retail flywheel. Thanks to the fact that new sellers are joining our platform, customers are keen to do their shopping here and can count on having access to an increasing number of products available at very competitive prices.

The growing number of customers attracts more sellers.

Additionally, Allegro invests in a variety of innovative solutions that increase customer satisfaction and help sellers grow their businesses. We pay special attention to the so-called retail basics, i.e. the fundamentals of retail trade, ensuring that customers have access to the widest possible range of products at the best possible prices and maximum convenience of the shopping experience, especially fast and free delivery. We are also developing new business areas, such as Allegro Pay and Allegro Biznes, as well as investing in our SMART! Program and looking for growth opportunities outside Poland. In 2021, we are planning to invest as much as PLN 560-600 million (CAPEX capital expenditure). This represents twice the investment figure of 2020.

Allegro-Grafiki-21_3-EN Allegro-Grafiki-21_3-EN

All of the above results in the flywheel effect driving the continuous growth of our platform and strengthening the satisfaction of all parties to a transaction.

Customer satisfaction is very important to us, but we also support sellers and provide them with technologically advanced services and sales management tools. We offer tools for monitoring sales results and managing the competitiveness of their offer, as well as integration with many payment service providers and delivery solutions. Using the “I’m sending with Allegro” option, you can manage shipping and take advantage of attractive rates and conditions negotiated by Allegro, all in one place. Throughout the year, we organise a variety of promotions to help sellers boost their sales, such as Smart Week or Black Week. We also help sellers reach their customers with their offer via the innovative advertising system called Allegro Ads.

In practice
The development of the SMART! program

Allegro Smart! is the best loyalty program in Poland, giving customers not only the possibility of free delivery and returns, but also access to daily deals and special offers during shopping festivals such as Allegro Smart! Week, the biggest shopping festival in Poland. Introducing Allegro Smart! has changed the shopping habits of Poles, who increasingly do their daily shopping on Allegro, spending more and more money on their shopping (last year’s average on Allegro.pl stood at PLN 2,700, i.e. on average, 36% more than the year before).

By the end of 2020, SMART! Program members could choose from over 100 million offers. We also added a special package called Smart! Student covering free deliveries and returns as well as a number of other benefits. After a 6-month free trial, users will be able to enjoy the service with a 20% discount. Membership also gives access to benefits offered by Allegro partners, such as Multikino, FlixBus, Blinkee, T-Mobile and Heyah.

Michał Owerczuk Director of Allegro Smart and Loyalty Programs
In practice
FinTech Allegro Pay

Allegro customers appreciate various forms of payment for online purchases. We know their needs and evolving preferences, which is why in 2020 we introduced Allegro Pay, a service that complements the existing payment methods available on the platform. This is yet another change that makes shopping on Allegro ever more convenient and affordable. As part of the Allegro Pay service, customers have funds to use to pay for their purchases at any time, choosing a convenient repayment option. They can pay within 30 days or even in 20 monthly instalments.

Impact on the Polish economy

PLN 0.9 billion paid in VAT (Value-Added Tax) and and CIT (Corporate Income Tax)
Our business has a direct impact on customers and sellers but the list of our stakeholders goes far beyond these two categories, of course. Our scale of operation makes us one of the most important Polish companies, and we are fully aware of the responsibility that comes with it. We have always operated in Poland and we pay taxes here. In 2020, we paid almost PLN 0.9 billion in taxes under VAT and CIT. This amount would be enough to build 18 km of motorways or finance a third of expenditure on higher education and science in Poland (according to the state budget for 2021).

We are one of the most desirable employers in Poland, helping develop talents in a modern and dynamically growing field of the economy. At the end of 2020, the total employment at Allegro.eu was over 3,150 people. This means we now employ over 700 more employees than the year before. In 2021, we plan to employ 1,500 new colleagues in total. This is equivalent to the entire Allegro team back in 2017!

Innovations at Allegro.pl – the technology created in Poland

New products for customers and retailers that allow us to propel our flywheel are always the result of close collaboration between our business teams and engineers who design specific solutions based on advanced, state-of-the-art technologies. Allegro.pl employs over 3,150 people, nearly half of whom are world-class specialists in the field of technology. Allegro engineers care about the development, security and stability of the platform, and our ranks also include teams dealing with e.g. artificial intelligence and machine learning. The technological heart of Allegro is Poznań, but we work in five cities all over Poland.

Our technology platform is designed using a domain-driven design paradigm so that the entire platform can be divided into logical components, reflecting key business processes.

Marcin Mazurek Technology Director

90 developer teams

All the innovations and solutions on our platform are created from scratch by the combined efforts of our technology and business teams. Did you know that there are as many as 90 developer teams at Allegro? Thanks to them, we can introduce innovations that are created locally in Poland. Their level meets the highest global standards.

  • 90 developer teams

Everyday implementations

The Allegro platform is changing all the time. An average of 110 software implementations and 1,490 tests of new solutions are carried out every day.

In 2020, the most important ones included Allegro Pay financial services, Affiliation Program (Allegro Polecam) program, presentation of the expected delivery time or a communication system called The Allegro Message Center (Centrum Wiadomości). We also offered sellers, especially foreign ones, the possibility of listing offers in bulk (so-called flat files) and a convenient tool for sending parcels called “Ship with Allegro” (Wysyłam z Allegro).

There is a lot going on with us, so we care about regular and transparent communication with sellers. We engage them in discussions about changes to the platform and inform them in advance. Thanks to this, they can prepare as best as possible, well in advance.

  • 110 software implementations every day

Communication Team creates the great Allegro Technology Wikipedia, and I can proudly say that we broke all records in 2020. We published 685 entries on implementations and tests. The most popular entry was visited 4661 times.

Jakub Dowgird Product Communication Manager
In practice

In 2021, Allegro.pl joined the Mobile Native Foundation to cooperate with organisations from around the world for open source.

Machine learning and delivery time

Allegro displays the estimated delivery time, which is visible at any time of shopping and makes it easier to search for offers with fast deliveries. Currently, Allegro customers can choose from over 80% of offers with an estimated delivery time within 1-2 days. This makes shopping on Allegro even more convenient.

You will find machine learning-based solutions in almost every part of Allegro. This is a very important topic at Allegro because it helps make our customers happy, improves their experiences, and makes transactions safer. Our Machine Learning team works with different parts of the organisation to deliver cutting-edge solutions to everyday problems for customers and sellers. We improve search and recommendations with computer vision to help customers find what they’re looking for. In the field of customer experience, we use natural language understanding; our chatbot Alina helps troubleshoot common buying problems, and we make sure communication between buyers and sellers is safe and enjoyable. We improve sellers’ experience by improving product data and product suggestions or by improving category structure.

Daria Bogusz Senior AI Project Manager (AI)

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