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Marcin Lis, B.I. Polska: The development of the courier industry goes hand in hand with the development of the e-commerce sector. Forecasts indicate that although its share in total sales will grow, it will be much less dynamic than what we saw in 2020 and 2021. This is coupled with the inflation crisis, which is reducing customer portfolios. In recent quarters, InPost has boasted that it is growing faster than the entire market, but the above circumstances call into question the replication of such findings in the future.
Rafai Brzoska, InPost: We were one of the first companies to warn of this slowdown in the internet market. Today we see it happened. We are dealing with declining volumes all over Europe, especially in Western Europe – France, Great Britain and Germany. However, this does not apply to e-commerce, after the first half of the year we have shown that InPost is growing in all countries, higher than the market in which it is located.
Also in Poland?
only polish E-Commerce is still growing. And our business is growing, too – after the second quarter of this year, the market has grown by 7 percent, and has grown by more than 20 percent.
As someone recently said, “Consumers have too much money”?
You won’t convince me to make political comments, but our growth has several reasons in terms of business. First of all, the shopping cart is decreasing, which is confirmed, among other things, by the results of Allegro. In our opinion, the pace of purchases in a hyperinflationary environment is not only maintained, but also increased. We are dealing with the effect of substitution. If, for example, I drink soy milk, because I am allergic to classic ones, and so far I have been buying my favorite ones in a nearby restaurant, where it already costs 15 zlotys, then I can find 4-5 products on the Internet at a price of 30-40% . minimum. Online consumers can find cheaper alternatives without visiting 10 different stores, but using a price comparison engine or accessing popular platforms.
This is one factor.
Our next hypothesis is that completely new customers are entering the market, which can be seen by the number of installs of our InPost Mobile app. On the one hand, these are Ukrainian families who have already announced that they are settling in Poland. Many of them make purchases not only for their own needs – they send them to their families abroad. On the other hand, we see electrodes who register in the app and start using our Paczkomat® devices for the first time. The internet was simply not an option for them yet, but going back to the first point, they are looking for cheaper alternatives and ordering products online.
The third element is very rapid growth second hand shops in Poland. When we look at the growing popularity of Vinted or OLX platforms, we will see an increasing number of transactions. Customers in difficult times, instead of buying a new jacket or new shoes in the store, can find a good quality jacket and high-quality shoes, often intact for half the price, or even for 20%. Value. These are the three main hypotheses that make the Polish market perform relatively well compared to, for example, France, Great Britain or Germany.
In this case, overseas markets are a burden to InPost.
of course not. Our results for the first half of the full year show that deflation is not a problem for us today. The French shrank 24 percent and our business grew 7 percent. In Great Britain, the market shrank by 7% and grew by 225%. What is the burden of business development is increasing costs – high energy pricelong fuel price And the high price of the work of human hands. The latest data from the Central Statistical Office shows that real wages in the entire economy are declining and only one industry is growing in it – transportation. Therefore, there is simply a shortage of personnel. There are no people to work in the sorting plants across Europe and there is a shortage of couriers. This cost component is growing rapidly. Here’s also an explanation of our growth – Paczkomat® InPost is from the customer’s point of view and we are the cheapest and most convenient solution. This is why the challenging inflationary environment is hitting our business, but only by 10 percent. How to hit traditional courier companies. One of our couriers delivers up to a thousand parcels per day, visits several locations, and a courier delivering parcels home will only visit 80 places with one parcel each. This means that our single car replaces 12 conventional carriers and our freight company replaces 12 carriers. If you look at the review of FedEx, Bpost and Royal Mail results, all the analysts are down recommendations, and we’re growing above the market and beyond investors’ expectations.
Aside from inflation itself, we also have a direct hit on one of its components. Energy prices are on the rise – companies’ bids can be several hundred percent more than they are now. Parcel lockers are not raised, and cars are not running on water. A three-character courier company announced the introduction of an energy fee per shipment. Should InPost customers prepare for higher wages?
In the field of logistics, not only Paczkomaty® vehicles and courier vehicles are energy-consuming items. In fact, the largest components of energy costs are warehouses and sorting plants, that is, hundreds of thousands of square meters that need heating and lighting. We’ve already received bills in expected increments of 500-700 percent. Compared to this year’s prices. I hope that the proposal to reduce the increase in energy costs will be implemented, because if the bills increase by 500-700 percent mentioned above, the fuel by 50 percent, and a wage With a higher index of inflation, let’s not delude ourselves that the consumer will not feel it. We have already raised prices by half the rate of inflation, with some additional costs, but I want to assure you that there will be no further increase this year.
Business threats lurk not only in market mechanisms. Entrepreneurs say directly that the government does not allow them to run their businesses peacefully.
Today, we pay taxes mainly in Poland, France and Great Britain, that is, those countries in which we do business. What stands out above all else is the fact that economic patriotism is so appreciated today. Looking at what it looks like in the case of large companies headquartered, for example in France or Germany, we can see that Western concerns pay high taxes in their countries, and very low taxes, for example in Poland. In the first half of 2022, DHL made a profit of 8 billion euros and paid nearly 2 billion euros in taxes to the German budget. In 2021, only 15 million PLN paid in Poland, compared to 222 million PLN paid by InPost. One InPost paid PLN 60 million more in taxes to the budget than the entire logistics industry combined. Foreign companies have a strong national economic spirit and transfer profits from other countries to the domestic market, and pay nominal taxes in the markets in which they operate. It shouldn’t be like that. Should we transfer profits from France to Poland? I think we will have serious problems on the Seine. Are Western companies shifting profits from the Vistula? Do they have problems here? Anyone interested in this? no. In my opinion, it’s time to seriously talk about the idea that has been put off lately Minimum CIT.
With this appeal, you can go some way through listing the part of the work that called for withdrawal or modification from the CIT minimum. On the other hand, for example, ZPP for years shows how foreign companies pay, or rather do not pay, CIT in Poland, and appeals to income tax at the same time.
It is not a normal situation in which a company based in Germany gets huge total profits in many markets, including Poland, and they transfer it to the local market, and consolidate it in their country. Foreign logistics companies often pay taxes in real terms in Poland of less than 1%. Revenue, the problem is not only the logistics companies, but the entire business. This is not normal. That is why I am talking about the need for such a tightening of fiscal policy so that profit shifting is not possible. Whether it is about trademark fees or cost allocation. The final form of the solution is not decisive, it is important to create a structure so that the huge tax disparity we see disappears. Therefore, consultations with entrepreneurs and organizations representing entrepreneurs are necessary in order to jointly work on a solution to eliminate this phenomenon.
After this appeal, arguments will be put forward: but we are creating jobs in Poland, and billions are added to the budget and the Social Insurance Institution.
If we’re dealing with a company that’s based here, that invests here and creates jobs, it might have some tax break if the legislator decides that’s the most important element of the economic policy he wants to support. Only there can be no one to deal with the situation, which occurs in some industries, where there is a clear transfer of profits abroad. Let’s reverse this position. How will we compete in Germany against DHL or Deutsche Post? We don’t have a chance because he will probably be one of the biggest contributors to the German budget. Therefore, taxes on profits should go to the budgets of the countries in which they were collected. In 2021, DHL paid Poland’s CIT tax in the amount of 0.7 percent. From revenue, which is better anyway, because he paid 0.4 percent in 2020. Unfortunately, only in Poland such a situation is possible. If a Polish company in Germany followed similar practices, the reaction would be immediate.
So I understand that if you received a phone call from the Ministry today inviting you to meetings with the Minister of Finance, would you go there?
absolutely yes. At least to represent my field of work, because I know what the cost structure is. I know how many foreign companies are improving their tax burdens and I would have no problem being an entrepreneur in Poland to support the Polish government in terms of fair and equal treatment of all entities in a particular sector when it comes to tax policy.
On the other hand, for a few days you had the possibility of paying tax on excess profits. Looking at InPost’s results for the previous year and the first two quarters of this year, the company was “caught” in defining profit for additional taxes.
I am convinced that reducing competitiveness and innovative Polish companies was not the intention of the creators. In any case, I would like to remind you that in the first half of this year we have a negative cash flow, because we reinvest every zloty not only in Poland, but in 9 countries in which we operate. If the establishment of any tax is such that the company is penalized for the investment, cutting it would be the first and natural step. In our case, small and medium-sized Polish companies that manufacture components for us or prepare Paczkomaty® devices will strike. This means that these companies will have to lay off workers, that is, they will become a direct victim of such a tax structure. Hence, I am convinced that if any unexpected tax structure is created in Poland, it will take into account the main economic interests of Poland, so as not to reduce the competitiveness of Polish companies that pay taxes in Poland, invest in Poland, but also invest abroad and employ Thousands of people. I don’t think this might have been the creators’ intention. Just as I don’t think the Polish government wants to punish companies for making profits in Poland and paying taxes here, and reward those who – frankly – avoid paying taxes in Poland, because they will get this new tax in Poland. Form, as reported by the media, does not apply.
He has worked in the media for 10 years and I have the impression that in the past few years I have been noticing a kind of shift in the approach to business in the country. In the past decade, the novel has been: “The fewer countries, the better,” “If you don’t get involved, we will succeed.” Today, companies submit proposals on their own, which often include charging new fees, but maintaining dialogue.
Tango takes two people. I see changes in these relations between the state and the business sector. Polish companies really want to support the Polish state, they want to support the Polish budget, they do not want to escape with investments and profits to another tax housing. The consciousness of Polish entrepreneurs is changing, who see that globalization is ending and that one has to play with one goal. Only the entire team must play to achieve this goal – including the government. Only then can we win. If we had players on the field shooting themselves, we wouldn’t stand a chance. I am convinced that we have a huge backlog and untapped potential in the field of social dialogue. Entrepreneurs often have really good ideas that are worth talking to and listening to, and employer organizations are a natural partner in this conversation.
Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.
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