The government’s decision to establish official prices for certain products, though well-intentioned amidst rising prices, has created an unhealthy tension among traders and suppliers, according to Gabriel Makki, the managing director of Kifli.hu. Makki emphasizes the importance of transparent regulatory frameworks in conducting mandatory campaigns. While customers have benefited from the price cap, with some products experiencing a significant increase in market share, the overall impact on producers has been less favorable. The enforcement and framework have created tensions and limitations in price redistribution and availability, without effectively controlling sale prices for producers and wholesalers.
Makki argues that such measures hinder the collaboration and negotiation between manufacturers and retailers, which typically result in better deals and higher-quality products for customers. He states, “It pushes and limits an important part of the equation when manufacturers and retailers partner and negotiate to offer good deals to customers who benefit from that interaction through better products and good quality.”
Despite the challenges, Kifli.hu has maintained its commitment to promotions and has not reduced the selection or increased prices of other products in response to the price cap. Makki recognizes the good intentions behind mandatory promotions and supports them in key categories to ensure customers can access their favorite products at reasonable prices.
The impact of official prices on suppliers has been significant, with purchase prices doubling in some categories while selling prices remain unchanged. This has resulted in a high financial burden, particularly as the proportion of controlled products increases. Kifli.hu has chosen not to compensate for the price cap by reducing promotions or increasing the prices of other items.
Transparency and fairness in the regulatory framework are crucial, as stated by Gabriel Makki. He believes that all players in the sector should be affected equitably and that the rules should be clear and applicable to everyone.
Kifli.hu, Hungary’s largest online shopping service, has experienced remarkable growth since its inception. From delivering only 438 orders to 430 customers in the first month, the company now serves over 50,000 people monthly. With a customer base continually expanding, Kifli.hu operates with 250 employees and around 400 couriers, serving 106 settlements, including Budapest districts, from their 9,000-square-meter warehouse on Jászberényi út. The minimum order value for delivery is HUF 12,000, with a lower threshold for premium members.
The online delivery company’s revenue increased by 40 percent last year, attributed to organic growth in orders and food inflation. However, the price increases did not fully align with supplier prices. While the exact profit figures are undisclosed, Kifli.hu reported an operating profit alongside investments in infrastructure and organization.
As Kifli.hu plans to expand its services and operations in Hungary, they aim to reach all households in their existing areas and invest in geographic expansion to different cities. They also seek to enhance the quality and speed of their services, such as the recent introduction of 90-minute delivery time slots, and expand their offerings with new unique brands. Gabriel Makki encourages competition in the market, as it provides customers with more choices and opportunities to explore the convenience of online food shopping. He believes that the competition should focus on selection quality, freshness, and customer service, rather than being limited to online or offline realms.
Regarding the possibility of offering non-food products, Makki mentions that while Kifli.hu already offers a range of non-food items, he sees little added value in selling discount televisions or commonly available tools at this time.