Business24 March 2017

Online retailing – a niche for local investors

Pioneered in Romania by the eMAG company, online retailing registers growing success in the country and the need for competitiveness on this segment is increasingly visible

Online retailing companies

Online retailing companies

Just like in any other communist state, things moved slowly in Romania with regard to the showcasing of brands in the country as well as with regard to technological developments in general and implicitly the use of personal computers. As a result, online retailing had difficulties in reaching the Romanian market, especially since had barely begun to be exposed to the marvels of capitalist consumerism, namely shopping malls and top brand outlets, which were starting to flourish in the country’s big cities.

Thus, in 2001, when online retailers such as Amazon were already a routine for Euro-Atlantic consumers, in Romania the first “internet based products company” was born, designed as an online shop where customers could buy computers and computer related equipment. The initial stages of the online platform developed by eMAG were not very successful as the concept of online shopping was not particularly appealing to the Romanian public.

                      

Customers still seemed fond of physical stores, so the inspiration of eMAG’s founders was that of creating a few physical shops where clients could go and where the personnel presented the idea and the benefits of online shopping, thus encouraging people to order straight from home rather than coming down to the store.

Slowly, Romanian customers started to embrace the practice and thus, in time, eMAG managed to broader their product suite sensibly, covering almost everything, from household items to cosmetics, from toys to books. Immediately, other companies wanted to tap into this market niche and competitors started arising, the most important one being cel.ro, a platform proposed by the Corsar Online company, accompanied by PC Garage, a platform focused mainly on IT related products. The fashion industry could not afford to miss out on this opportunity, so on top of the major brands which all started offering online products, Fashion Days was also born. Its platform, which aggregated products from different designers, became the most important online fashion outlet in Romania.

                                   

However, in spite of the appearance of all these companies (and other more recent ones) eMAG is by far the most prolific online retailer. In 2011, it launched the eMAG Marketplace platform, which allowed eMAG partners to showcase and sell their products through eMAG’s own channels. The platform knew an instant success, growing rapidly and reaching 2000 partners stores in 2016, which is more than one million products showcased during the same year. Finally, eMAG also had the strength to buy its main rivals, namely PC Garage and Fashion Days, thus becoming an undisputed market leader.  

Consequently, a solid alternative for eMAG could prove to be very successful, especially if it proposes interesting products and surprising offers. Naturally, entering the market will not be an easy task, but offering diversity on a semi-monopolistic market is always welcome, especially among customers, who would definitely label as „fresh” any type of alternative to the well known product suite of the dominant company.     

Sources:

http://www.mediafax.ro/economic/emag-cumpara-retailerul-online-fashion-days-14182694

http://www.profit.ro/stiri/emag-platforma-marketplace-va-depasi-vanzari-de-un-miliard-de-lei-in-acest-an-16484929

http://www.emag.ro/info/despre-emag-marketplace

http://www.digi24.ro/stiri/economie/companii/emag-preia-grupul-pc-garage-mai-putin-patru-branduri-online-ale-acestuia-622062

www.amazon.com(photos)  

Claudiu Bolcu

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