ZF English

Online retail market still flying high

Online retail market still flying high
14.08.2006, 18:55 11

The online retail market will surge by 300% this year compared with 2005, to 60 million euros, Radu Apostolescu, executive manager and co-founder of Emag.ro, the largest online store in Romania told ZIARUL FINANCIAR.
He estimates Emag.ro, held by Dante International, will triple sales this year compared with 2005, when it posted 13 million-euro revenues. "We have already exceeded last year's results and expect to see sales to the tune of 35-40 million euros by yearend," Apostolescu said.
Dol.ro, the second-leading online store in Romania in terms of market share last year posted sales of approximately 2 million euros. Its officials' estimates point to an increase in sales to 5 million euros this year. Dol.ro is the Internet extension of the Diverta store chain specialised in stationery, media and IT products controlled by businessman Octavian Radu. Approximately 70% of eMag.ro's sales were generated by the online retail, with the rest made to corporate clients, according to Apostolescu. A corporate division was established within Dante International at the end of last year to join the online retail division.
"The corporate division came up as a necessity considering there has been demand from companies over the course of time," Apostolescu explained. Besides online sales to corporate clients, the corporate division also installs IT&C systems, computer networks, software and telephone exchanges.
Apostolescu believes the share of the corporate division in the business will grow in time. "We have corporate clients that generated over 100,000 euros in revenues over the course of time," he added.
Only a small part of the sales on the Romanian online retail market are made through credit or debit cards, the eMag.ro official says. "The encouragement and education in this regard should not necessarily come from us, but especially from banks. A critical mass of clients has not been reached yet so as to be of interest to banks," Apostolescu specified. He added that if the use of credit and debit cards was really promoted, then online sales made through cards would exceed 50% in the next three or four years.
Emag.ro has recently opened a showroom where products on display can be tested, so that customers will be able to make an educated choice when purchasing, based on their own observations. "I want to point out this is not a store and we do not make any sales through this showroom because we would probably be unable to cope. We have many clients that prefer to pick up their order from our office so that they will be visiting this showroom, where we have a lot of products on display that cannot be found anywhere else in Romania," Apostolescu explained.
Emag.ro launched at the end of 2001, selling a small range of products, including computer systems and office supplies. The tripling of the business every year brought along a fast-paced expansion of the team, which now includes 100 people, triggering four changes of headquarters in 5 years, company officials say.