November the 24th, 2020 – The words ”Amazon in Croatia” are about as foreign to anyone living here who has tried to order something from the global giant as someone speaking to them in Klingon, but could it finally be happening? Although there has been no official confirmation as yet, it seems things could be moving forward on the until now almost unthinkable ”Amazon in Croatia” front.
As Darko Bicak/Poslovni Dnevnik writes, and as Poslovni Dnevnik initially reported last year, in the middle of this month Amazon started an exclusive cooperation with Croatian on the delivery of packages for the Croatian market with the perspective of covering the markets of Croatia’s neighbouring countries, primarily Serbia, Bosnia and Herzegovina and Montenegro. However, for the time being, neither Croatian Post (HP) nor Amazon wants to comment officially on this business partnership.
“We can’t reveal the names of our business partners, but yes, HP has become a partner to large web retailers recently and a significant increase in the number of processed shipments is expected,” the Croatian company stated. However, it has also been found out that HP has recently started cooperating with the multinational online store About You, which has had a major marketing campaign on the Croatian market in recent weeks.
Amazon’s technical experts visited Croatia last summer, taking the time to go and view the newly built HP sorting centre worth 350 million kuna in Velika Gorica near Zagreb. The initial deadline for opening up the sorting plant was postponed for several months to meet all of the deadlines and conditions of technical inspection from Amazon.
Just what would this cooperation mean for the HP itself and, of course, Croatian customers with the chance of an ”Amazon in Croatia” carrot being dangled in front of them? In any case, HP will strengthen its market position and brand, and Croats will certainly be able to buy more products from Amazon’s offer and get them delivered in a shorter time.
Despite the fact that Croatia been part of the single market of the European Union and all EU directives governing free trade for more than seven years now, our customers are mostly deprived of cheaper purchases through Amazon, which doesn’t deliver a good part of its goods to Croatia. The main reason for this is in the fact that only about 50% of its own goods are sold through Amazon, and the other half falls on original brands and stores and where Amazon merely acts as an intermediary.
In such cases, the seller, not the intermediary, decides where they want to send the goods and where they don’t – mostly for market and logistical reasons. Those who really wanted to buy something through Amazon had to, at an additional cost, rent mailbox services in Germany to which Amazon sent them the original shipment, which would then be repackaged and shipped onward to Croatia. A rather ridiculous action to have to take indeed.
Amazon is one of the most famous global brands that doesn’t need to be presented or promoted in any way, but it’s worth repeating that it is an online store that is twice as large as all other online stores in the world, according to specialised portals. Their revenue stood at an incredible 280 billion US dollars last year and they employ more than a million people. To compare, Alibaba had revenues of 72 billion dollars at the same time, and Wish had 1.9 billion dollars in revenue.
That sort of mind boggling data, perhaps even now outdated, speaks volumes about what kind of giant Amazon truly is, that five million companies offer their goods through this service. Last year, the founder and CEO, Jeff Bezos, became the richest man in the world, whose wealth in mid-2019 was estimated at more than 160 billion US dollars, and today reaches 83.6 billion US dollars, according to Forbes.
Although the ongoing coronavirus pandemic has brought major problems to the entire global economy, courier companies and online stores have seen significant growth. In particular, Amazon had about 650,000 employees in the middle of last year, and a year later that climbed to more than a million.
Although these are much smaller numbers, HP also profited from the pandemic. “In the postal world, we’ve seen changes in recent years and all the trends have indicated that the circumstances are changing. The pandemic has accelerated the trends we expected – the decline in revenue we experienced in core business, especially the decline in the number of letters hasn’t yet been replaced by package revenue, but these volumes are growing strongly. This is where our investment in Paket24 pays off. HP will end this year with a positive result and an extremely stable financial picture. Almost 100 million euros of losses from previous periods have been closed and the same amount has been invested,” HP explained.
They added that before the virus struck, their online orders, and thus courier deliveries, grew by 15-20% every year. With the introduction of lockdown, their turnover increased by 30% when compared to the same period last year. They especially emphasise that HP connected small family farms with customers through Yellow Click/Zuti Klik.
Although HP has expressed no desire to talk about concrete partners, they emphasised that their current position on the market is a confirmation of a multi-year investment cycle under the auspices of the Pošta2022 Development Strategy.
“Over recent years, HP has strongly turned to its core business and the development of its logistics capacity. The construction of the new sorting centre, as one of the most modern logistics centres in this part of Europe, has positioned the post office as an important logistics partner in this part of the European Union and the region. Modern infrastructure is crucial,” they emphasised from HP, which will soon start installing the first parcel machines, an infrastructure that will enable users to easily pick up their packages, 24 hours a day, seven days a week.
The first 150 will be placed in accessible locations in the coming months, and users who choose to receive a package through this channel will be able to pick up their shipment when it suits them.
As for the prospect of Amazon in Croatia and many tight lips, the result of Amazon adn HP’s ”flirting” is yet to be seen.
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