"Crisis or Boom - Marketplaces are always in Demand"
willhaben, bolha, mojedelo and njuskalo: the brands of the STYRIA Digital Marketplaces in Austria, Slovenia and Croatia are on a strong growth course despite or perhaps because of Corona. Marketplaces head Mike Berger explains the reasons for this and gives an outlook on new business models.
FROM PHILIPP LACKNER
Why are the STYRIA digital marketplaces crisis winners?
MIKE BERGER: Because we run a business where we satisfy a very basic human need: The marketplaces enable the trading of things. Something that of course hasn't gone away even through the crisis. On the contrary: especially during COVID, a lot of things were bought and sold. And actually one can say, no matter whether we are in a boom or a crisis, people always want to trade with each other.
What was it like when it went into lockdown?
BERGER: We felt that strongly at the beginning. The short-term declines were around 20 to 30 percent, both in ad volume and traffic. People were busy with other issues. But after the initial shock, traffic soon increased again considerably.
Does that mean that the users used the time to clean up or to buy something?
BERGER: Definitely. I would describe it as modern cocooning: One was forced to be at home a lot and often had more time due to short-time work. Then the own four walls were embellished, mucked out or safe investment forms, such as real estate, were increasingly sought. And even used cars were in greater demand, since people did not want to travel by public transport during this time.
How did that regionally present itself, thus Austria in the comparison to Slovenia and Croatia?
BERGER: In sum it was very similar. The decline was perhaps somewhat stronger in the south compared to Austria. There earthquake in Croatia made it more difficult. This, in combination with Corona, made the population even more insecure and it was a very emotional situation. First it meant: Stay at home, keep your distance, then the earthquake came along with numerous aftershocks and people were forced to leave their homes and literally stood on the street with hundreds of others.
But then the growth came back?
BERGER: Yes. After a few weeks, we were more or less back to normal levels in all markets and in some cases grew even more than planned - of course differently in the individual categories. The marketplaces have experienced very strong growth. We quickly responded to the trend towards regional shopping, for example by introducing local offers such as the digital farmers' market at our Slovenian marketplace bolha. We took advantage of this momentum of regionalism and it worked fantastically. In Austria, too, we were active in this area as a partner of the Austrian government, for example. In addition, we helped quickly and unbureaucratically with free advertising packages for those industries that were urgently looking for additional personnel. This was also an opportunity to make our contribution to society in this crisis.
How were you able to keep customers in the delicate phase?
BERGER: We deliberately pursued a very active discount policy. The demand was there and we wanted to continue to offer users a great surfing experience on our portals and apps. To achieve this, it was important that the ads did not disappear. And that's why there were special deals in this phase, some with discounts of up to 50 percent. With May we went back to the normal rates. The customers have remained loyal, and some new customers have also joined us. The way things look today, as a marketplace cluster we will be able to maintain the overall sales level of the previous year or even increase it in some areas.
Job, real estate, car or marketplace - which category had it the hardest?
BERGER: Definitely the job sector. But we have to take a differentiated view. For example, there was never a decline in jobs in trade or in the health professions. Other sectors are still cloudy. We are waiting for these volumes to return. Nevertheless, we are still on course for growth in jobs. This also has to do with the fact that we - for example in Slovenia as the market leader with mojedelo - can always fill these positions well, where people return quickly when business picks up again. As far as the automotive sector is concerned, it is always in great demand on our portals. After all, our main focus is on the used car business, where people are more likely to turn to during a crisis than to buy a new car. And with real estate we are doing well, because especially now many investors are looking for a safe haven.
The fantastic thing about the marketplaces is: In times of crisis, people come to us, want to buy used cars because they have to save, because they want to invest their money safely or buy a cheap used car. It's exactly the same in phases of economic boom: people like to trade even in such phases when they are doing well. They want to afford something, buy a larger apartment or look for a new job, of which there are many in good years. That's the great thing about the business: we are both crisis and boom winners. Basically, we are always doing well - provided we do our job well.
Also thanks to the increased use of digital?
BERGER: With the COVID issue, digitization has experienced an enormous boost. This helps us because many retailers have understood the digital business even better. Many have used the time to scrutinize and optimize. The home office theme has contributed a great deal to the increased adoption of digital business models and processes. And that leads many to a digital marketplace where you can get started. From small businesses to large corporations.
Technologically, you haven't stood still either.
BERGER: Right. We have also used this impetus to offer new services. Paylivery", the new, fully integrated payment and delivery service at willhaben, is a very good example. Especially in the age of social distancing, the topic of secure shipping and payment is highly interesting. Paylivery was, of course, already on our roadmap before, but now was the perfect time to launch it.
What is the feedback on Paylivery from willhaben users?
BERGER: Very, very good. It is very well received - especially now in the crisis. Sometimes you are lucky in misfortune - Paylivery came at exactly the right time. In general, there is a huge growth potential from these topics.
User communication via chat also plays a major role at willhaben. Your experiences?
BERGER: The messaging service is a very central part of our marketplace and a strong driver for its use. But of course, this also brings with it major challenges: Basically, in addition to all the other functions of the platform, we operate our own "WhatsApp" with the messaging service, which in itself is a monstrous task to operate this with high technological excellence.
How are the marketplaces doing financially?
BERGER: In 2014, all of STYRIA's marketplaces were merged into the "Digital Marketplaces" cluster. We have been able to more than double our turnover since then and also bring each individual company into the profit zone. And we want to continue to grow and increase profitability. A key driver for this: Getting even more involved in the transaction.
What does that mean in concrete terms?
BERGER: In addition to searching and finding the ads, we offer additional services in the areas of financing, insurance, payment and logistics. These could also include, for example, services relating to legal advice, price information or managed buying. There are very, very many business models that we are gradually rolling out and want to make the service for customers and users even better.
How do you put this into practice?
BERGER: We develop some of these features ourselves or we develop them with partners. We constantly ask ourselves the question: Make or Buy? The answer is very often Buy, because you can build on proven models and then integrate them seamlessly into our services. From a strategic point of view, this definitely creates even closer customer loyalty. To seriously compete with us, it is no longer enough to program a cool app. We operate more and more entire ecosystems.
Insights, for example about the real estate market, are also exciting, and we get them from you time and again. Is this knowledge also a business model?
BERGER: No one, no statistics institution, no bank has this knowledge or these data that we collect through our activity as a marketplace. Some of them are clients of ours and want this data to make their business even better.
Artificial intelligence should also play an important role with you. How important will this topic be for you?
BERGER: Very important. For example, fraud prevention in chat, the right suggestion for an advertisement, or searching by photo. This is all data-driven. We are already investing here and want to become even better. Users and customers who use our platforms expect us to support them optimally in every situation. The only thing is that a lot of this happens in self-service, so no one is involved. This support must therefore be provided by the intelligent machine. And this is where the game will be decided in the coming years.