EIRP Proceedings, Vol 10 (2015)

The Insights on Polish E-Commerce – The Present State and Proposed Solutions

Janusz Grabara¹, Bartłomiej Okwiet², Paula Bajdor³

Abstract: The main objectives of this papers is to presented the current state of Ecommerce in Poland, together with the current state description and future development. Ecommerce sector is continuously spreading and its tools and techniques are used by both businesses and individuals. While in the case of individual physical entities, the polish government does not give any specific proposals, but in relation to the company, national efforts are aimed at even greater dissemination of Ecommerce in everyday business. While 94% of Polish companies have access to the Internet, only 65% of them have their own websites. And having an own website is a very first step to use the possibility of Ecommerce. This article focuses on the characteristics of Polish Ecommerce industry, but also presents visible trends, with emphasis on the E-point, as a tool, that has a strong impact on supporting the development of Ecommerce industry in Poland.

Keywords: Internet; enterprises; Ecommerce; E-Point

JEL Classification: L86; L81; L96

1 Introduction

The common use of the internet and its services, is increasingly linked with our lives. At the same time the role of the Internet in business increases. Small and medium-sized enterprises, that actively use the Internet tools, are able to quickly increase revenues and employment, and obtain greater reach and exports. 95% of companies have Internet access, and two-thirds has its own website, although it is mainly used for the presentation of its products and services without possibility to sell online⁴. More and more people see the company through the prism of its website. Not having an own website has a negative impact on the credibility of the company. But the data shows that, unfortunately, not all companies see the potential of this channel. The economic importance of the Internet is quite important, as a communication and information environment, that enables the capture of information on trade offer, exchange of opinions and recommendations. The Internet has become a crucial source of information for the procurement process⁵. Consumers are actively looking for information on the Internet, in particular data on goods and services. Polish customers are the European leaders in terms of the number of queries per Internet user. The value of goods purchased in the traditional way, but its prices were checked in the Internet by the users, reached 26 bln PLZ in 2010. This represents more than 80% higher than the value of goods purchased by the Internet directly⁶.

Figure 1. The use of ICT technologies - enterprises with access to the Internet (above chart) and enterprises having own website

Source: Authors’ own work based on Eurostat

The Global Perspective on Retail 11 Report found that the most developed market for online commerce is Great Britain, which slightly is ahead of the United States - the largest e-commerce market (in 2012 the value of goods sold in the United States amounted to approx. 187 billion, which accounted for nearly one-third of the global online sales). United Kingdom, its position owns, primarily to the volume of sales online - both total (55 billion USD) and 1 per capita (USD 869 in 2012.). The potential of this market also provides a significant share of the Internet market in retail sales in the country (9.7%), the dynamic growth of the market in recent years, as well as openness to new technologies. (Tarnawa & Zadura-Lichota 2013, pp. 1-184)

Enriching themselves middle class, young population and high foreign direct investment are the most important factors of the development of emerging markets. This is an opportunity for growth also for the luxury goods market, as enriching themselves middle class in these regions are looking for defined good and rooted global brands. (Lis, Lis & Grabara, 2009, pp. 881-889)

2 E-commerce in Poland – the Main Characteristics

E-commerce market in Poland is one of the fastest growing in Europe, despite a slowdown in the real economy. According to the SMB, Kelkoo and Forrester Research, the value of B2C e-commerce has increased in 2012 by nearly 23%, reaching a value of nearly 21.5 bln PLZ⁷. This result is a 3.8% share of the total trade. In the overall ranking of the most advanced e-commerce markets in the world, contained in Global Perspective on Retail, Poland has 28 place, behind Russia and Turkey, but ahead Spain. In terms of value of online sales in 2012, Poland was ranked on the 15 place in the world, with a score of 4.86 bln USD, while in terms of market size, has 17 place. In a statement on the volume of e-sales per 1 inhabitant, our country reached the 25th place. Online sales represents 4.6% of total sales, which gave Poland 14th place in this category. A good result (15.2%) also obtained the growth of online sales in the years 2007-2012. Indicators, that have decided about Poland’s lower positions, has related to infrastructure, cyber security, the percentage of Internet users and the number of credit cards per person. On the Polish market, have seen a considerable increase in the importance of sales via the Internet, which is treated as another distribution channel in most industries. This applies especially to electronics and multimedia⁸. Polish fairly distant place in the ranking of Cushman & Wakefield, is primarily due to the small Internet access and our habits. Development of technical infrastructure, reducing the proportion of digitally excluded people and the younger generation entering the market, will help to close these differences.

Figure 2. The value of polish e-commerce market (in bln PLZ)

Source: Authors’ own work based on Forrester Research.

The chart above reflects the change, that has taken place in the e-commerce market in the course of the last decade. It may be recalled that back in 2002 the Polish e-commerce directed at consumers was worth only 330 million PLN, or about 1.5% of the value of 2012. Forecasts for 2013 were optimistic - estimated another double-digit percentage growth in market value and according to some forecasts even achieve a value of 26 billion PLN (we are still waiting for the report including year 2013 and 2014).

3 E-commerce Trends

A key trend that is currently being watched, and whose role will grow, is the development of the mobile sector. The dynamic development of mobile devices (especially smartphones and tablets), their widespread use and the growing demand for them, makes it so m-commerce gradually increases its market share. In Poland in 2013, 8 million smartphones were used (about 2 million more than in 2012), Which means 31% of the market penetration. The increase in the number of devices, we can use to browse the web, imposes a different approach to creating websites. Given the above, it becomes more and more common to use a new approach to design websites - so-called. RWD (Responsive Web Design). (Brzeziński, 2012, pp. 11-17) It allows creating websites with customized navigation system and method, according to the screen size of the device on which the web page is displayed. Each version of this site has the same content, which may be arranged in different ways, in each case providing the convenience of reading and navigating. In Poland, the number of transactions using mobile devices in 2011, increased by 7%. It is estimated that the value of these transactions in 2011 amounted to 640 million PLN, or nearly 4% of all online purchases. Mobile devices are currently only a few percent of the entire structure of the movement, but after a few years of dynamic, three-digit growth (over 100% per year), will represent a significant part of any internet business⁹.

Taking into account the above trends, most banks, mobile operators, retailers and independent payment providers are aware, that they are the future of mobile payments, because devices such as smartphone, will shape the new business model in payments. Reflecting this trend are the results of a report by McKinsey & Company24, which published a list of 12 technologies that will change the world. According to the authors of this report, in 2025, mobile Internet may obtain the impact on the economy of up 10.8 trillion USD. Among the key technologies were also The Internet of Things, that is, the use of the Internet in everyday objects, as well as cloud-based technologies. (Bajdor & Lis, 2014, pp. 40-47)

A significant role in e-commerce, both globally and in Poland, social media play, among which the decisive role Facebook plays. It is difficult to point to a credible number of users of this service, as part of a fictitious accounts. Some data shows, that in terms of the number of users on the Facebook global list, Poland is on the 23rd place with approx. 10.7 million active users. There are also data, according to which the number is less than 9 mln. There is no doubt, that social networks play an important role in the business. In Poland, approx. 40% of Internet users has an account on the social networking site, while 86% of companies have a Facebook profile. It is emphasized that “social media” should not be used solely as an advertising channel. They have a much wider application, including in the interaction with the customer or as a consumer service. (Kot, Ślusarczyk & Starostka-Patyk 2013, pp. 78-90)

The challenge for e-shops will be a large number of changes, made in a relatively short period of time. These changes relate to, inter alia, new disclosure obligations to customers, increase the time , which consumer has to return the goods purchased over the Internet, without giving a reason (from 10 to 14 days), more precise records of shipping cost. Therefore, existing systems and sales procedures will be modified as well. Polish stores will also have to adjust to the new EU rules on alternative dispute resolution. They use an independent non-governmental institutions: consumer rights advocates, arbitrators, negotiators for the settlement of disputes between the seller or service provider and the customer. One of the tools is an online dispute resolution system, which will facilitate the procedure when the parties are from different countries, and there is a language barrier between them. Put simply, the functioning of the system is the possibility to complain (in the language) by the consumer through the this. After notifying the seller of the complaint, the parties will establish competent entity, which will assist in resolving the dispute. The platform will increase consumer confidence in online shopping, which is particularly important in cross-border shopping. In addition, consumers and retailers will avoid the costs and judicial procedures. (Łodziński & Brzeziński, 2013, pp. 90-97)

The new rules will bring about unification principles of e-commerce in the EU, which will be an opportunity for e-sellers to attract new groups of customers, especially from abroad. Proper implementation of the new rules, a good preparation of entrepreneurs and open to an amicable settlement of disputes system, will provide the development of e-commerce in Poland. (Stefko, Dorcak & Pollak, 2011, pp. 214-222)

Important for the e-commerce in Poland, was created in January 2013, Chamber of E-commerce Poland. In a short time, it expressed its support for the 110 entities. Among the signatories of the Statute of e-Chamber includes both large companies - market leaders in e-commerce, small and medium-sized enterprises, as well as the newly created entities. The aim of the organization is to develop the Polish market of services provided electronically, through the identification of needs, education and exchange of know-how, as well as representing the common interests of the e-commerce in the legislative process. Chamber of E-commerce Poland is a forum for discussion and a place to exchange experiences, also has a real impact on the development and image of the entire industry. It takes steps towards establishing uniform procedures and standards of performance across the e-commerce sector. A significant role in the dynamic development of e-commerce are also educational initiatives, that organizations take the IAB Poland (Interactive Advertising Bureau). They are supposed to wide-ranging education market in the methods of effective use of the Internet. An example of this kind of action is to create guides for shopping, organizing workshops and thematic conferences. They help in removing the barriers faced by newly-listed vendors on the Internet market. This is an important element of the use and development potential of the Polish e-business.

4 E-point as a Tool to Support E-Commerce Development

E-Point (Point of Contact for Service Providers and Clients) is a plane serving settlement legislation and issues related to e-commerce. It is run by the Polish Agency for Enterprise Development in September 2010. The main tasks of e-POINT should raise awareness of legal and practical issues related to Internet services, in particular in terms of contractual rights and obligations, as well as on the complaint and redress in the event of disputes, including information on the practical aspects related to the use of these procedures. These actions are intended to facilitate doing business with the use of ICT by businesses and to support safe and free exercise of these companies offers their customers. It is also important to popularize the use of e-skills in business transactions. These objectives are realized through a website. This site contains information and advice on the electronic trading rights, including topical articles, news, legislative base, e-books, videos from e-seminars conducted and the form to ask questions, through which you can ask a question regarding to electronic trading issues. E-POINT activities are addressed to anyone, who in their professional or personal life, use the Internet. Service providers can use the information in the field of (Tarnawa & Zadura-Lichota, 2013, pp. 1-184):

1. Knowledge of internet business, information on basic legal issues or reporting obligations associated with conducting business on the Internet, as well as the rules of e-services;

2. The protection of consumers , information on unfair commercial practices, consumer rights of e-services, Polish and European consumer protection policy, the consequences of breach of consumer protection laws or certification of e-services;

3. The security and privacy, privacy recipients, the issue of protection of personal data in e-business and information on rogue Internet registries;

4. E-business abroad, the basic principles of providing e-services abroad or information on cross-border disputes;

5. Copyright and personal property on the Internet, software patent protection in Poland and the European Union or the protection of a computer program and its operation in the company.

For service providers, a list of important institutions and professional organizations is also available, initiatives and services business associations operating in the e-shop or intended for them. Recipients can expand their knowledge of (Tarnawa & Zadura-Lichota, 2013, pp. 1-184):

1. Purchases on the Internet, what should be done before making a purchase, what are the conditions for making claims or returns, information about auction sites and the rules of e-services;

2. Disputes with service providers, what to do in case of a dispute with the contractor, the information on European proceedings concerning small claims and the amicable resolution of disputes - how to try to resolve the dispute before resorting to court;

3. The security and privacy, the basic advice on how to stay safe online and protect PC;

4. Copyright, information on the scope of intellectual property rights and personal property on the Internet, and YES, that allowed the free use of works.

E-POINT activities contribute to a better use of the potential of the Internet in the development of various sectors of the economy. The created information system facilitates the acquisition of basic information on the rules necessary to conduct business.

5 Conclusion

Internet helps to change the way of work, leisure or shopping. Also changes the picture of global trade. It would be difficult to ignore the considerable potential for Internet sales channel. In the last three years, the average annual turnover growth of Internet commerce in the world was 18%. For comparison, other retail channels recorded an increase of 1.3%. Average turnover achieved by means of e-commerce in Poland, is almost two times lower than for the whole EU. The situation may improve breaking down barriers in many companies, that fear of new solutions, mostly due to a lack of experience in this area. E-commerce market in Poland is still in the development stage. Currently, we are at the stage of intense transformation and optimization processes. This enhances the degree of openness of the market, which will contribute greatly to increase its scale in the coming years. E-commerce is no longer an additional project only for retailers. Today, it is a choice that has become a necessity, while creating the potential for innovation and space for creativity.

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