The COVID-19 pandemic slowed down the global economy, but not e-commerce in Hungary: 70 million orders generated a turnover of HUF 1203 billion in 2021, meaning a growth of over 30% for the sector. The new, automated logistics center of eMAG-Extreme Digital in Dunaharaszti will open in this prosperous environment expecting to boost e-commerce further.
The size of the new Hungarian eMAG-Extreme Digital logistics center will be 117,000 square meters, equivalent to 23 football pitches. The project costs HUF 35 billion and is expected to be operational as early as Christmas this year, supplying customers in the region. Besides eMAG-Extreme Digital, the new facility will also serve the e-commerce giant’s 6000 partners. The corporation is a market leader in Hungary, and during the COVID-19 recession, instead of complaining, its management started to invest in new developments to be capable of facilitating its growing product range, which is already more than 4 million different products.
The pandemic has intensified the digital economy’s rise, in which one of the most tangible players is e-commerce. The sector is even relevant for national security, so the Hungarian Investment Promotion Agency supported the new warehouse complex with a HUF 4.8 billion non-refundable grant. The initial 350 jobs would be expanded to 600 in the coming years, boosting the economy of Pest County.
In the past few years, both businesses and customers have become more open to digital solutions: globally, 20% of retailers have a digital presence. In Hungary, the share of online purchases reached two-thirds in 2020, rising to 70% in 2021. Therefore, small and medium-sized enterprises must adapt to the new reality; selling only through traditional channels is not enough anymore.
The new logistics center will be significantly larger than other online retailers’ warehouses in the Hungarian market, and its size can also compete with traditional, offline players’ storehouses. In addition to its size, the new warehouse complex’s ultra-modern, robotic solutions will allow it to cover not just the Hungarian market but also other countries in the region. The logistics center in Dunaharaszti will also serve Austrian, Croatian, Czech, German, Slovakian, and Slovenian customers.
Balázs Várkonyi, CEO of eMAG-Extreme Digital, said that the Hungarian e-commerce sector significantly developed in recent years. Hungarian customers are becoming more demanding; they do not want to wait days for a product to arrive and desire faster and simpler pick-up options. Várkonyi added that since the beginning of May, they offer all their products and services on the emag.hu website, which allows eMAG-Extreme Digital to focus more on technical and logistical improvements. He also said they will soon take logistics to the next level by building a larger warehouse complex than ever to provide customers with a more efficient, faster, and higher quality service.
Besides speeding up eMAG-Extreme Digital’s own order fulfillment, the new logistics center will help the more than 6,000 businesses in Hungary and other Central and Eastern European states that offer their products and services on the eMAG Marketplace. Várkonyi highlighted that with this investment, they support small Hungarian enterprises to become professional online merchants and remain competitive against the foreign online giants expanding in the region.
The Hungarian logistics sector has been developing; it now accounts for 28% of the country’s export, a 45% increase compared to recent years’ figures. Its international competitiveness is becoming increasingly apparent. Moreover, Hungarian e-commerce still has the potential to grow further as, in the country, the share of e-commerce in overall retail sales (10%) is lower than the EU average. This figure can double soon.