Allegro IPO pins hopes on Polish shoppers going digital

The Warsaw Stock Exchange is bracing itself for its largest ever IPO after Poland’s most successful e-commerce platform Allegro this week announced that it was planning a partial flotation. Its private-equity group owners are said to be looking for a valuation of between $12bn and $15bn and initial documentation indicates that the listing is set to sell off between 20% and 25% of the company.  Expected to take place next month, it is intended to help Allegro simultaneously repay its debt, increase its express delivery services and further develop its  fintech activities.
In 2016 Cinven, Permira and Mid Europa Partners clubbed together to buy Allegro from South Africa’s Naspers for $3.25bn. It was a  bet on Poland’s growing middle class and expanding online retail market which to date has only partially paid off. While the country’s economy has avoided recession for almost 30 years and the ranks of its middle class have been expanding rapidly, only 8% of retail sales are conducted on line – roughly on par with Germany but significantly behind China (16%) and the UK (14.5%).
According to Statista, medium-term future growth is likely to be steady rather than spectacular,  with Polish e-commerce revenue – led by fashion – expected to grow at a CAGR of 9.4% until the end of 2024 and user penetration from 52.6% to 57.8% over the same period.
But Allegro is not the only company taking a bet on Poland’s e- commerce market. Earlier this month Costway, which specializes in the supply of a wide range of Chinese-manufactured  toys, furniture, sports accessories and interior furnishings, announced that it was to lease the entire 52,000 m²  Panattoni Park Tricity East IV complex that is being developed close to Gdansk’s intermodal transport hub, the port of Gdynia and the Sopot seaside tourist resort which between them constitute the Gdansk Bay metropolitan area.