Head of JátékNet: We are going to face serious challenges

How are you currently affected by the coronavirus pandemic?

Like in so many other businesses, it is clear in our segment that online sales have started to grow, while the offline and wholesale business have started to decline. We are lucky because within our company these two trends balance out so our turnover has not changed significantly.

However, there is a lot of uncertainty regarding the second half of the year.

It seems that we are going to face difficult times. Many people have lost their jobs and salaries have fallen in quite a few places.

As a result, our turnover is expected to fall and, at the same time, due to the weak forint our expenses are growing. We pay for Far Eastern orders in dollars and for European ones in euros. In addition, a lot of our other costs, such as rents, are also paid on a euro basis.

Are your supply chains damaged?

We have already seen shortages in our domestic procurement. There is no such problem with Far Eastern orders yet, but unfortunately this may change in the future.

In any case, we have already ordered the products for the Christmas season.

It is certain that we are going to face serious challenges.

Putting the pandemic aside; which games are the most popular in Hungary?

Building toys - LEGO, for example - are really timeless in Hungary. More recently, there has been a huge demand for robot toys as well. Today you can buy toys that not only look exactly as if they came from a science fiction story, but you can also give them various commands.

Besides, in the past 10 years we have been experiencing a renaissance of board games.

Their popularity is probably due to the fact that with board games, children can be tempted to put down their phone and forget the computer screen for a while, and they are enjoyable for children and adults alike. In the Christmas period last year, a toy called Super Magic Jinn did particularly well. It’s an animal figure who, with the help of a built-in program, can play a guessing game with kids and figure out what they’re thinking.

Aren’t you afraid that Amazon will swallow up the market one day?

I have been involved in e-commerce since 2012. Ever since I put my foot in this market we have been afraid of Amazon.

Anybody in this industry who says they are not afraid of them is either not honest or maybe a little naive. However, despite the fact that we have been wary of them for a long time, they have not appeared in Hungary yet. Although they do deliver to Hungary, they do not advertise here and they do not have a service in Hungarian.

Other strong international players have emerged, though, e.g. Czech and Romanian companies.

How fierce has competition been in the gaming market in recent years?

There is a strong competition, as there are at least 15-20 large players in this segment, and there are also many small shops in the country, which, if there is no pandemic, can play a significant role at local level. In any case, as the largest Hungarian webshop for toys, we put great emphasis on the technological background: unlike many of our competitors, we use our own IT system instead of using rented software.

Besides, we make sure that our orders are delivered on the next day after purchase, even in peak periods like Black Friday, when our turnover is ten times as high as usual and we get 5,000 orders a day instead of 500.

JátékNet.hu is 15 years old this year. Can you tell us something about the beginning?

When the company was founded, it was a typical startup created by two couples: the Bognár and the Hankó couples. The Bognárs had been involved in online sales before: they owned SzoftverNet, one of the first e-commerce businesses in the country, which was selling computer programs. The Hankó couple was expecting a baby in 2005: this gave them the idea of selling toys.

In the first few months, sales picked up so sharply that the two couples put their previous work aside and all started working for JátékNet full time.

Eventually, the moment came when they felt that the company was already too big: from having just a few employees it grew to employ 40 people, and in the high season almost 150 people were working for the company. This made them decide to sell the business. I joined the company as managing director during this period, in 2015. Since then, the company has been acquired by a Hungarian toy importer, Modell & Hobby Kft, which supplies toys to a lot of Hungarian retailers: their partners include e.g. Spar, Müller, Auchan, a lot of petrol stations and a couple of small toy shops, as well. Apart from being a wholesaler, they also wanted to join the retail business, so they bought JátékNet. The two companies have been fully merged since January 1 this year.

You are already present in Romania...

In Romania, our business volume is around 100 million forints. We are not the biggest, but we are an important player in the market. In the future, we would also like to enter into other countries in our region.