Hungary’s Extreme Digital and Romania’s eMag have joined forces with the aim of becoming the largest online retailer in Central Europe.
The joint venture will be 52 percent owned by eMag’s Hungarian subsidiary and 48 percent by Extreme Digital, with the merger being subject to approval from the Hungarian Competition Office.
Both companies have been established in 2001 and are present in several regional countries. eMag is the market leader in Romania’s southern neighbor, Bulgaria, while Extreme Digital is the market leader in Hungary with annual sales of HUF 36 billion (EUR 110 million).
“We are competing in a regional and global market. In order to be competitive, we must offer a wide product range and quality services at a good price and we must grow”, eMag founder and CEO Iulian Stanciu said. The joint venture will be headed by Balázs Várkonyi, co-founder and CEO of Extreme Digital.
“With the market knowledge of Extreme Digital, the logistics capacities and professional platform of eMag and the financial strength of (eMag’s) parent, South Africa’s Naspers we can become the defining retail company in the region”, Várkonyi said. “The company established with this fusion will both be able to offer its customers better prices and a better service.”
The joint venture aims to reach sales of EUR 1 billion within six years. According to the latest available data, online retail in Europe had a turnover of EUR 534 billion and was expected to reach EUR 602 billion in 2018. The biggest players are the same as globally: Amazon, Alibaba, eBay and Wish (in decreasing order of sales).