Allegro Lokalnie

From startup to full-blown profitable product

ongoing cooperation

Project management

Web development

Mobile development

MVP development

Workshops

Results and business impact

PRODUCT BUILDING

Building a profitable product from scratch

600 000 000 PLN

Gross Merchandise Value (GMV) in 2023

~10 000 000

visits a week

750 000

active sellers a week

1 000 000 +

mobile app visits a week

300 000

Monthly Active Users

1 000 000 PLN

weekly Gross Merchandise Value (GMV)

Google Play and Apple App Store ratings

60 000 - 70 000

app downloads monthly

Key insights and learnings

Finding ways to leverage a user base of the mother-service boosted growth

Workaround for limited marketing budgets: user retention and activation, and organic traffic

Mobile is a great way to build retention and activation

Free deliveries are a major incentive for C2C

A cross-functional technical team that works with business context is key to making good decisions faster (how to build it? see below)

The Client

Allegro, the biggest e‑commerce platform in Poland and one of most recognizable in Europe with almost 200 mln MAU, which exists for over 20 years. They wanted to overhaul the customer experience in the C2C segment. The idea was to maintain full B2C support in the Allegro platform and create a new one strictly for transactions between private customers - Allegro Lokalnie.

Allegro Lokalnie aimed to be the best place for casual merchants, providing a lightweight and tailor-made process, streamlined selling experience along with providing competitive prices. And all of that under the Allegro umbrella - which meant customer safety built in the product DNA. These were key requirements that kickstarted our cooperation.

The main challenge

Allegro itself was focused on B2C relations, and aimed at putting the product at the center of the marketplace. They noticed, however, that this focus didn’t allow for frictionless C2C interactions, and that other platforms started to occupy this niche.

Allegro therefore decided to launch Allegro Lokalnie. The goal was to recapture a leading position in this niche through focusing the Lokalnie platform on the purchases, building its organic visibility and user retention.

Building traffic:
from startup to enterprise

Allegro Lokalnie at first functioned as a startup inside the larger Allegro ecosystem. We delivered the MVP to validate the business assumption that a platform in this format is something that market needs. But after this step we needed to take care of the platform’s visibility. At first we solved this by integrating Allegro Lokalnie with the main Allegro product. Offers from Allegro Lokalnie were appearing in the searches done on the main platform. But when the main platform started to shift focus to products, Allegro Lokalnie started to lose traffic. We solved this in a couple of ways, and now, though Allegro Lokalnie is an internal project, the product’s development development is comparable to evolving from startup bootstrapping to a C-series funding level of operations.

Dealing with small marketing budgets

Since Allegro Lokalnie had small marketing budgets, we focused on two pivot points: retention and engagement of current users, and getting new ones through SEO.

Optimizing cloud costs

As the platform grew, we were asked to analyze the costs of all cloud services Lokalnie is using. It turned out that Google Cloud Platform (GCP) had the highest cost. Allegro Lokalnie made a decision to look into this part, and so we did it. By doing a series of technical tweaks, we were able to reduce the GCP costs by 80%. Read more here.

Attracting new users through organic traffic and SEO

With limited marketing budgets, organic traffic became a crucial growth channel. You can read here how we have contributed to product growth through technical SEO. We also systematically improved Core Web Vitals and implemented parallel website loading to reduce loading times. We optimized inactive offers indexing, integrated with Allegro's main SEO admin panel, and built dedicated SEO solutions to accelerate rank growth. The SEO-compliant optimization of the main site header was also future-proofed for monetization. These technical improvements contributed to achieving ~10 million visits per week.

Building user base through integrations with the main service

We’re navigating the category tree changes in the main Allegro service in a way that ensures great user experience for Allegro Lokalnie. We’re also allowing the users of Allegro to frictionlessly resale their purchases on Allegro Lokalnie — building retention for Allegro and boosting user base for Allegro Lokalnie. Although at first the estimate to deliver this functionality was 3 months, we leveraged pre-existing components to deliver in just 1 month.

Building engagement through mobile

One of the things we did for retention and engagement was building a mobile app. It allows us to build engagement through push notifications and reminders, we also channel the engagement triggers through email. The app was designed for intuitiveness and ease of use, so new people can have a frictionless onboarding. The metrics prove that this works. The development part of the mobile app was in entirety done by Appunite.

Building retention through free deliveries

Cost effectiveness is one of the major incentives for C2C transactions, so we looked for ways to bolster it. The main Allegro service already had a free delivery program (called Allegro Smart), and there was a plan to implement this also for Allegro Lokalnie users but initially the idea seemed too big to implement quickly. We thought differently. We took the technical solution from the main Allegro platform, adjusted it to Lokalnie ecosystem, and in just 3 months implemented the first iteration of free deliveries. Then every 2 months we evaluated the viability of this feature and adjusted it further. Finally, we decided it’s achieving the success criteria of boosting sales. On the technical side, the free deliveries need a lot of integrations, so we created a microservice with the entire business logic, ready to be used for additional delivery providers. In result of this initiative, the sales increased +30% and have the architecture ready for future expansions.

Decision-making insights

We’ve been with Allegro Lokalnie since it’s beginning. Although it’s an internal project of the main Allegro, at the beginning it was functioning like startup bootstrapping. Now it’s a profitable enterprise. We couldn’t build this product if we weren’t able to integrate with Allegro Lokalnie’s culture and change with it. Such an extensive collaboration has many crucial decision-making factors that create success, but we can point to a couple that are recurring.

Focusing on product, not features

Our team, as an integral part of Allegro Lokalnie product development department, works on fulfilling business goals, not features. The backlog is populated with things to be developed, driven by the Allegro Lokalnie product team, but we’re able to advise and decide: if the given feature is viable, when to implement it, how to implement it given the current business context, and how to measure its success. This is the core of our day-to-day decision making.

Making decisions cross-functionally

We have an extensive skill and knowledge range in our Allegro Lokalnie team, which allows us to make valid decisions and create robust business testing framework faster. We’re also making use of solutions that worked for similar problems in our other projects thus reducing time-to-market.

Ownership through autonomy

This is best portrayed through a concrete example. Our team was asked to gather data about all the third-party digital services that Allegro Lokalnie uses to function. The goal was cost-cutting. While creating the list, we assigned percentages of budget to each of them. We then broken down the highest-spending services into sub-services. This allowed us to notice use-and-spend patterns. Allegro Lokalnie made the decision to focus on one of the services first, so we created a document where we described the status quo and the desired state of use-and-spend patterns. This allowed us to systematically work on optimizing them. As a result, we were able to reduce the spend on the most expensive service by 45%.