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Allegro Leans Into Local Strategy to Fend Off Rising Asian Competition

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Polish e-commerce leader Allegro is intensifying its focus on local products, services, and delivery infrastructure to distinguish itself from rapidly expanding Asian competitors such as Temu and AliExpress, the company said Thursday.

The strategy includes removing long-delivery-time offers from East Asia on its international platforms in Czech Republic, Slovakia, and Hungary, following a similar move on its Polish marketplace, which had little to no impact on sales volumes, according to CFO Jon Eastick.

“We’re looking to really double down on our differentiators versus the Asian players and make it really clear to the consumer why they look to Allegro every day as the main place to shop,” Eastick said during a conference call.

Key Strategic Moves

  • Long-shipping offers from East Asian sellers have been phased out to highlight local availability and faster delivery.

  • Allegro will continue investing in platform upgrades, such as:

    • Loyalty program enhancements

    • AI-driven recommendations

    • Smarter ad targeting

The changes are part of Allegro’s broader effort to maintain its dominant position in Polish e-commerce, where it currently holds 38.8% market share, compared to:

  • Amazon – 3.9%

  • AliExpress – 3.4%

  • Temu – 1.5%
    (Source: Euromonitor International, 2024)

“Asian platforms made rapid progress in early 2024, but that has slowed dramatically,” Eastick said, citing internal monthly surveys of transaction shares.

Competition and Marketing Dynamics

Temu, which entered Poland in June 2023, has been aggressive in marketing spend, prompting Allegro to respond.

  • Q1 2024 marketing spend: 317.1 million zlotys ($84.46 million), up 10% YoY

  • This is down from a 28.7% jump in Q4 due to the seasonal holiday push.

“Marketing spend and share of voice is definitely where we feel the impact of the new competitors the most,” Eastick noted.

Despite the increased advertising intensity from rivals, Allegro appears confident in its defensive positioning, relying on brand loyalty, localized logistics, and strong vendor relationships to stay ahead.

Mixed Forecasts Cloud Holiday Shopping Season Ahead of Black Friday

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Holiday Spending Trends: Optimism vs. Caution

The 2023 holiday shopping season is shaping up to be a mixed bag, with consumers keeping budgets tight and focusing on price comparisons for essentials like apparel, electronics, and toys. Walmart and Target, key retail bellwethers, have presented contrasting outlooks as they gear up for the year’s busiest retail period.

Walmart raised its annual sales and profit expectations, attributing its success to aggressive pricing strategies and an expanded customer base that includes higher-income households. Meanwhile, Target issued subdued forecasts, citing weak demand for high-margin categories such as electronics and home goods.

Despite the first Federal Reserve rate cut in four years, consumer spending on non-essentials remains lackluster. Analysts predict another deal-heavy season, with overall holiday shopping growth expected to slow to its weakest pace in six years, according to reports from the National Retail Federation (NRF) and Deloitte.

Challenges in a Shorter Shopping Window

With only 26 days between Black Friday and Christmas—compared to 31 days in 2022—retailers have pushed early promotions, beginning as far back as July. Record numbers of shoppers, an estimated 183.4 million, plan to shop in-store and online from Thanksgiving through Cyber Monday, up slightly from last year.

However, Walmart CEO Doug McMillon tempered expectations, noting that momentum may mirror trends from earlier in the year. “The calendar isn’t ideal, and it’s a unique environment. But I expect stable trends to continue,” McMillon said on a recent earnings call.

Mobile Shopping and Loyalty Programs on the Rise

Mobile shopping continues to dominate, accounting for an estimated 53% of online spending during November and December. Adobe Analytics predicts mobile sales will grow by 12% this year, contributing to an 8.4% rise in overall online spending.

Gen Z consumers, who heavily influence shopping trends, are driving this shift to mobile purchases. Retailers like Target and Walmart have leaned into loyalty programs, offering perks like same-day delivery, personalized promotions, and streamlined in-store checkouts.

Walmart’s Walmart Plus membership program, discounted by 50% through early December, has seen double-digit growth in global membership income. Target’s revamped loyalty initiatives have fueled a 20% rise in same-day delivery orders, helping to offset weaker overall performance.

Targeting Specific Shopper Demographics

Retailers are increasingly tailoring promotions to attract new customers. Target’s exclusive holiday deals on Taylor Swift merchandise aim to tap into the artist’s massive fanbase, while budget-conscious shoppers gravitate toward discounters like TJX Cos., which recently raised its annual profit forecast.

M Science analyst John Tomlinson highlighted the fierce competition for incremental customers this season. “Retailers will intensify targeted promotions to gain new shoppers at an accelerated rate,” he noted.

Outlook for the 2023 Shopping Season

Retailers face a challenging season with cautious consumer spending, a shorter holiday window, and economic uncertainty. Yet, early promotions, loyalty incentives, and the growing influence of mobile shopping and social media may drive last-minute sales.

The battle for customer loyalty and efficient delivery will likely define the success of major players, setting the tone for retail in 2024.