European players in the field of online markets are beginning to be overshadowed by the Asian competition of Temu and Shein. According to the reactions from the market, these two marketplaces in particular are not letting anyone sleep. Negative reactions are appearing more and more often. The functioning of low-cost competition in the Czech Republic also raises the question of what effect it will have, especially on smaller and medium-sized players in e-commerce. However, sales of small and medium-sized e-shops continue to grow.
The entry of Asian online marketplaces into the Czech market has been aggressive, which has amplified how visible they are across marketing channels. The question of security and use of data, or possible misuse of customer data, or zero customer service, have long been obvious. However, at the moment it is mainly a trial period with customers, and the evaluation of the success of the strategy will only await us after the massive marketing campaigns have died down.
In the past, there have already been similar cases within the Central European region. The Singaporean brand Shopee, for example, was similarly aggressively entering the Polish market. At that time, it covered the online and physical space with aggressive marketing. At the same time, she burned a huge amount of money. But then week after week the entire company withdrew from the market, leaving only empty offices and roadside billboards. It turned out that the company has greater opportunities in another, larger market. For Temu and Shein in the context of the global market, the Czech Republic is also a relatively small opportunity.
It’s good to be aware of who these marketplaces are targeting. Their cheap goods will especially attract shoppers, for whom the main criterion is an extremely low price. In this regard, their main competition is not small and medium-sized online entrepreneurs, but mainly large online sellers and classic retail players, i.e. chains of large multinational companies.
This is also confirmed by the double-digit growth rate of Czech e-shoppers. That was the case last year, and they have had a strong start to this year as well. So the situation is definitely not so bleak. The performance figures of e-shops for which the Shoptet platform provides a technical solution to date show that small and medium-sized entrepreneurs are still doing well. In February alone, they showed a growth of 24 percent, while the growth was similar in January. The reason is also that they sell unique goods that have their loyal customers.
The hype surrounding Asian online marketplaces therefore has a similar consequence to any other change, news or innovation in the market. Those who are well prepared can come out of similar situations even stronger.
The author is the director of Shoptet.
