Retailer eMag opens marketplace for small Romanian producers

The biggest online retailer in Romania, eMAG, has launched a marketplace dedicated to small Romanian producers, opening its sales channel to an estimated 400 local entrepreneurs in the first year. The initial investment in the new marketplace, called Deschide Romania (Open Up Romania), is estimated at RON 1 million (EUR 222,200). Small producers, except those in the food industry, NGOs with self-financing production activities and individuals registered for business (PFA) can enter the program. The turnover of entities entering the program can reach up to RON 500,000 (EUR 111,100) in the last fiscal year. Their output needs to have been manufactured in Romania. eMAG expects some 50,000 products to be listed in the first year, generating sales of over RON 14 million (EUR 3 million). The retailer estimates that they would total sales of RON 100 million (EUR 22.2 million) within 5 years. Besides access to a market of millions of clients, those listing in the new marketplace will benefit from lower commissions, on average 50% less than the standard ones. The NGOs registering with the program will not have to pay a commission, the company says. Products in the program will be labeled with a dedicated logo, and producers will receive support on the legal requirements regarding the production, description and sale of products online. Over 32 local producers reporting a turnover of up to RON 500,000 are currently listed in the eMAG Marketplace. They registered total sales of RON 600,000 (EUR 133,400) through the platform. eMAG launched its third-party, affiliated platform eMAG Marketplace in 2011. It reached 1,000 partner stores in 2015, while these stores account for 25% of the total sales on the retailer's platform. eMAG's sales in Romania went up by 40% last year compared to 2015, the group's CEO Iulian Stanciu said in a press conference. Dante International, the local company that owns the eMAG brand, had sales of some RON 1.7 billion (EUR 382 million) in 2015. Thus, the company's sales passed the EUR 500 million mark in 2016, according to local Profit.ro. This year, the local growth rate is expected to be lower, at some 20%, according to Stanciu. eMAG also operates in Bulgaria, Hungary, and Poland. South-African investment fund Naspers is eMAG’s majority shareholder while Iulian Stanciu owns a minority stake in the company. South African group Naspers sells Czech operations to focus on Romanian eMAG’s regional expansion editor@romania-insider.com