Aukro Owner in the Czech Republic: Why the marketplace has become an online-auction

Mistakes are the organizational growth’ part if it is not fatal. Therefore, the main thing is to draw the right conclusions.

The Head and Co-owner of the most successful project in the e-commerce sphere Aukro.cz, Vaclav Liska, spoke about how the company managed to return to the growth falling business at the conference for e-commerce representatives Promodo Partners 2019. RAU has chosen the most interesting from the entrepreneur story.

History of creation

Czech Aukro.cz was launched as a marketplace by Allegro companies’ group in August 2003 after the similar business success’ in Poland: the group captured more than half of the online-commerce market. At first, business in the Czech Republic quickly grew and developed, and after a few years, took a leading position in the market, including due to the financial capabilities of the parent structure.

However, after rapid growth, the decline period occurred, including due to the huge competition. For example, now in the Czech Republic there are about 40,000 online-stores per 10 million populations (the highest per capita population in Europe). This does not mean that someone worked better than us. Just people bought from different sellers.

In general, the e-commerce market’ annual growth in the Czech Republic reaches 30%, while the e-commerce’ turnover reached $ 6 billion.

Hard times

The company experienced difficulties in 2011-16. At this time, the Allegro group was controlled by the South African media holding Naspers. Aukro often changed the strategy, thinking to reach a new level, but due to the high competition in this market, nothing really worked.

The management tried to answer three questions, seeing that the business is in decline:

1. Is it a global downturn or just our company?
2. How to solve the issue of developing new Internet solutions, despite the fact that the

company did not have own full-time developers?

3. What form of online-trading will be unique to the Czech e-commerce market?

The answers to these questions were found in 2016:

• First, it was decided to switch to a model of online-auctions, which allowed the company to stand out among the rest of the market players. Since it is at auction most often sold unique or special products. As the consumer’ behavior research has shown, people searched the Internet, first of all, for something special, something others do not have;
• Secondly, it is managed to find investors who are buying out the Czech company from Naspers;
• Third, it was hired own developers to write a new Internet-platform.

The asset was purchased in December 2016, and the new platform’ launch took place in August 2017.

But business still grew very slowly. Another searching year was needed. There was the organic traffic’ loss, and only since September has growth begun after the transition to a new platform. This was facilitated by the reorientation on the transformation from an ordinary merchant to a technology company, where modern technologies are used to optimize search and issue, and so on.

Error warning

It was made three main conclusions in the own business-research course:

1. Do not give the platform’ development to an outsource.
2. Do not set a very tight time frame for the project.
3. Do not use new technologies that are progressive, but not yet fully understood and refined (as happened with Aukro when developing the external interface).
4. It is should not expect too much from the new project – the changes’ results may turn out to be much less.

Instead of epilogue

Czech e-commerce has become one of the most advanced in the world due to the huge competition in the domestic market. Opportunities for customer’ personalization and segmentation, working with data and other new technologies make it possible to enter other countries’ markets. As expected, the Czech e-commerce market will continue to grow, and segment’ players will innovate more actively, seeking to attract as many customers as possible.

Therefore, it cannot be excluded that Aukro will return to Ukraine again. Recall, Aukrо.ua stopped working in Ukraine from October 1, 2016. All entrepreneurs who worked on this Internet-site were transferred to other trading platforms of the companies’ EVO groups.

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