Spectator on facebook

Spectator on facebook

QUALITY BEGINNING TO MATCH PRICE AS A DRIVER OF THIS WEB-ASED BUSINESS

Collective shopping market consolidates

JUST a few years ago a boom in discount or collective shopping brought dozens of websites to Slovakia offering discount vouchers for goods and services. But during the years 2012 and 2013 the Slovak collective shopping market saw its number three player leave, in addition to several smaller ones. Market watchers and collective websites themselves see this as a consolidation of the market, which nonetheless continues to flourish in Slovakia.

JUST a few years ago a boom in discount or collective shopping brought dozens of websites to Slovakia offering discount vouchers for goods and services. But during the years 2012 and 2013 the Slovak collective shopping market saw its number three player leave, in addition to several smaller ones. Market watchers and collective websites themselves see this as a consolidation of the market, which nonetheless continues to flourish in Slovakia.

“This is a self-cleaning process, which in a natural way reduces the number of merchants to the extent acceptable for such a market in Slovakia.” Jozef Dvorský, the executive director of the Slovak Association of Electronic Commerce (SAEC), told The Slovak Spectator, adding that the online shopping market underwent a similar development when, after a huge boom, the market cleaned itself, leaving only companies which offered clients added value.

In August, Shopcity.sk, then the third biggest collective shopping website in Slovakia, went bankrupt. It ascribed its fall to excessively high and poorly thought-out marketing investments, as well as a mistake in the scheme generating bonus credits for shoppers and the mismanagement of the website.

Zdenko Hoschek, from the collective shopping portal ZlavaDna.sk, believes this consolidation trend will continue but some smaller websites have problems.

“Those who approach doing business in an irresponsible way, have problems,” Hoschek told The Slovak Spectator. “This is a completely ordinary situation in any field of business.”

ZlavaDna.sk is a long-term number one player on the collective shopping market, controlling some 30 percent. His company operates three websites, which in addition to ZlavaDna.sk, include Boomer.sk and SlevaDne.cz, one of the biggest collective shopping websites in the Czech Republic.

Tomáš Sroka, director of Zlavomat.sk, the number two player in Slovakia’s market, saw the disappearance of one half of 150 websites in Slovakia in 2012 as a natural cleansing process. The situation in the Czech Republic is similar, he said.

“This is a trend which is linked with increasing demands of clients for quality offers and services,” Sroka told The Slovak Spectator. “Strong and stable players remain; those [which are] weak and problematic disappear. Websites which run the business literally on a shoestring, in the living room on the laptop of the owner, is not the way to do this business.”

Expectations

All signs point to more of the same.

“The number of websites will certainly reduce further. This is why we also await the merging of smaller companies,” David Gavaľa, from the MoreZliav.sk website, told the Profit weekly, adding that MoreZliav.sk itself has acquired three smaller players on the Slovak market over the last year. “I assume that only five relevant websites will operate in Slovakia next year.”

In terms of the quality of the services provided, Dvorský pointed out that the position of collective shopping websites is more difficult as groups are involved in this business: the client, the website and the service provider. Thus the task of such a website is to coordinate the business so that the client actually gets what the provider of the service offers via the website.

Sroka of Zlavomat noted that even though the number of collective shopping websites has been falling, the interest in collective shopping and the total turnover is increasing. The biggest websites make up as much as 80 percent of the turnover, he said. Out of this share Zlavomat makes up more than one half, according to Sroka.

“We register annual growth of turnover in tens of percents,” said Sroka, adding that compared with 2012 this Zlavomat registered an increase by 94 percent, while in the sale of goods the growth exceeds 160 percent.

According to Sroka, the next development will depend on how collective shopping websites manage to succeed with the attractiveness, quality and the extent of their offer and services, and this is not only in competition of collective shopping websites but also with e-shops. He assumes that Zlavomat will become one of the top five e-shops in Slovakia with its turnover this year.

Nevertheless, Sroka still sees room for improvement, either on the site of the product or the client. Earlier this year Zlavomat reduced delivery times by expanding its storage capacities. They also see prospects for extending their product portfolio. For example, earlier this year they started selling cars.

ZlavaDna.sk also continues to extend its offers.

“This year travelling and holidays are increasing enormously,” said Hoschek. “Medical treatments are also popular and the sale of goods, for example, for households, fashion and so on, is increasing, too.”

The new challenge is also to bring to shoppers tailored offers, and collective shopping websites view mobile devices as a tool enabling this.

“We put a strong emphasis on the development of mobile shopping to make our site simpler,” said Sroka. “A challenge is also personalised targeting and mobile platforms in order to bring clients what they need right now and what they could be interested in.”

Dvorský of SAEC expects that the collective shopping market in Slovakia will continue to develop in the sectors in which it has so far been successful: leisure activities, restaurants and services. He expects that the quality of services provided by collective shopping websites will continue to increase and that the market will become more profiled.

“I do not expect any fundamental changes or any significant turns,” Dvorský said.

He stressed that the factor that made collective shopping popular in Slovakia was that the economic crisis brought the need to optimise prices, and Slovaks started to surf the internet for better prices.

“This still persists in Slovakia,” said Dvorský. “The purchase power in Slovakia is much lower than in western European countries, but the Slovak customer also wants to buy products available in western Europe and thus he or she will ceaselessly search for the best possibilities.”

Top stories

Unknown places worth visiting in Slovakia Photo

The year 2016 brought record numbers for tourism in Slovakia.

Špania Dolina, the runner-up in the Village of the Year competition.

This is not a game, and these are not children

If politicians care about the future of the country, they need to offer young protesters with specific demands more than the just same old vague assurances.

Nu Dance festival changes date and the finale coincides with International Dance Day

The festival of contemporary dance has not just moved in time but also from the stage to the streets, encouraging public participation.

Renan Martins: Let Me Die in My Footsteps

(W)Rapping up two worlds in one music

The Fjúžn festival annually presents interesting musical projects from people who cross borders, literally or symbolically. This year, the headliner of the main festival concert on April 22 will be the French-Iraqi…

The Iraqi-French band Aiwa