Romanian online retailer eMAG announces €650mn expansion plan and new CEO

Romanian online retailer eMAG announces €650mn expansion plan and new CEO
By Iulian Ernst in Bucharest March 30, 2021

The biggest Romanian online retailer, eMAG, has outlined a three-year expansion plan backed by a RON3.2bn (€650mn) budget aimed at consolidating its subsidiaries abroad, developing its in-house technologies, its logistic infrastructure and its marketplace.

eMAG Group, controlled by South African group Naspers and also active in Hungary and Bulgaria, had consolidated business of RON5.6bn in 2019.

“Of the RON3.2bn we are investing over the next three years, RON785mn will go into international expansion, RON447mn towards the development of Romanian technology, RON251mn will go into the development of the digital entrepreneurship through the Marketplace platform, RON990mn into the development of logistics services and RON740mn will be invested in other companies,” announced Iulian Stanciu, who is moving from the CEO position to become the new executive chairman of eMAG.

The retailer also announced “an evolution of the executive team” that will lead the group’s regional expansion: eMAG’s general manager  Tudor Manea takes over as CEO from Stanciu. 

Stanciu is also a minority shareholder of Dante International, the company that operates the online retailer commercially known as eMAG.

In the next three years, the eMAG group will strengthen its presence in the region through investments totalling RON785mn.

In Hungary, where the company merged with Extreme Digital two years ago, it aims to reach sales of €1bn in the next five years.

In Bulgaria, eMAG will continue to expand its physical presence after opening its first showroom in Sofia last year, and will focus on developing and improving its services.

A budget of RON447mn will be allocated for the development of Romanian technology that will be exported to all countries where eMAG is present and which will benefit other entrepreneurs in the eMAG ecosystem. eMAG is investing in the development of its tech team which currently numbers over 700 people, and this year alone it will be expanded by another 100.

The technologies developed by eMAG IT specialists integrate artificial intelligence meant to improve the shopping experience, starting from the warehouse, where it helps optimise the collection route of ordered products and thus achieve a good delivery time, to searches on eMAG’s website and mobile app, so that customers can identify the products they want as quickly and easily as possible.

eMAG Marketplace, an important pillar supporting the growth of the company, which is estimated to reach 45,000 Romanian sellers in the next three years from today’s 25,000, will benefit from an infusion of capital of RON251mn. In 2020, the volume of sales made by the Romanian sellers in the eMAG Marketplace increased by over 90% compared to 2019, reaching 25mn products.

In order to support a wide range of products and a fast delivery, amid the accelerated growth of online commerce, the company will continue investing in logistics for digital infrastructure: the new logistics hub in Joita, Giurgiu county, will become fully operational in September 2022, and the Easybox network will be doubled to make delivery easier, predictable and fast. Investments in logistics will amount to RON990mn in the next three years.