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Cronicile

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

de Alexandra Pele , 3.6.2019

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader in the neighbour state.

Once the merger gets on the home straight, five new markets will open to the Romanian retailer, on which it plans to develop through the marketplace platform, an important driver for local sales.

“With this merger, we will develop ourselves in other countries where they are present, so besides the four markets where we are now active, we add Croatia, Slovenia, Austria, the Czech Republic and Slovakia. (…) In the five new markets, the development will be made mainly through the marketplace,” said Iulian Stanciu (photo), CEO of eMAG, at a press conference on Wednesday.

eMAG announced the acquisition of Extreme Digital at the end of March, and now the company aims to reach one billion euros in Hungary in the next six years.

The Hungarian market equals 70-75% of the Romanian one, as the population is twice as low. Consumption per capita is higher than at the local level. Once integrated, the new company, eMAG, currently present on the Romanian, Bulgarian, Hungarian and Polish markets, plans to continue its regional development.

“The expansion will be made from Hungary. The technology will be the one of eMAG, people will be trained by eMAG. The branding part will be discussed and we will announce it later. At the moment, we do not have the agreement of the Hungarian Competition Council yet, so we expect to have the agreement to talk about the merger. We hope to have this agreement within two months. Sometime in the next spring, we will do the whole merger,” Stanciu explained.

eMag, some figures

In 2018, eMag group had a turnover of RON 4.77 billion, up 17.5% over the previous year. In Romania, the turnover was RON 3.77 billion and the local market is the only one that brings profit, which is entirely reinvested.

The Marketplace Platform has substantially contributed to business growth. At present, there are 5.7 million products listed, compared to 10,000 in 2011. Stanciu believes there is room for growth in the context that the largest retailer in France has a portfolio of products available of 65 million.

Quantitatively, Marketplace contributed more than half of the group’s total sales, and in value terms, they accounted for 32% of the sales value (the average value of products sold by sellers is slightly below those sold directly by eMag).

Around 16,350 merchants operate on Marketplance and eMag targets to reach 40,000 in 2020.

In 2018, eMAG group increased its customer base by 1.9 million, of which almost one million only in Romania.

Surprisingly, out of this million, half comes from rural areas.

Over the next five years, eMAG plans to invest EUR 150 million in technology.

“eMAG is headquartered in Romania and remains headquartered in Romania. It is a Romanian brand. Technology is developed in Romania, intellectual property is developed in Romania and I believe that is the definition of a Romanian company. (…) eMAG is, I think, a Romanian multinational,” the company’s CEO said.

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