(Reuters) -Allegro reported a nearly 5% rise in its domestic first-quarter earnings and confirmed its full-year outlook on Thursday, as Poland's leading e-commerce platform fends off competition from the likes of Temu.

"Not only is the number of active buyers rising in Poland and internationally, but they also continue to spend more with us on average," Allegro's incoming CEO Marcin Kuśmierz said in a statement.

Allegro, which runs third-party marketplace platforms also in the Czech Republic, Slovakia and Hungary, said it had 21 million active buyers across the group, a 5.4% rise from a year earlier, including nearly 6 million outside of Poland.

Trading conditions were "not the best" in the first quarter, but things were looking "a little bit firmer" so far in the second, finance chief Jon Eastick told Reuters, adding the company was more hopeful for the later part of the year.

Adjusted core earnings (EBITDA) in Allegro's home market were 859.4 million zlotys ($229.6 million), while analysts it had polled were expecting 875 million on average.

It maintained full-year outlook, including an 8–12% rise in adjusted EBITDA in Poland. Gross merchandise value (GMV), an industry metric used to measure transaction volumes, rose 8.9% to 14.78 billion zlotys.

Allegro's shares were down around 2% as of 0744 GMT, with JPMorgan analysts saying they expected a "moderately negative" market reaction given the softer profitability in Poland and no surprises in GMV growth.

GMV in the international marketplaces jumped 82%, driven by last year's launches and supported by a more than 30% year-on-year increase in shopping frequency.

Allegro, which has been developing its platform in Poland since 1999, still has the biggest chunk of Polish e-commerce but is facing competition, including from Chinese giant Temu.

It said it had in recent months removed offers with long shipping times, mostly from East Asia, from its international marketplaces.

Eastick said removing most of the long delivery time Asian selection helped Allegro distinguish itself from the Asian competitors and the shopping frequency was improving a lot.

The move also helped Allegro increase the number of local merchants in its international operations, which rose 56% on the year, he added.

To bring its delivery costs down, Allegro has been investing in logistics, including rolling out its own parcel lockers and teaming up with delivery partners to add them to the service it manages.

Share of managed delivery volumes rose 29% in the quarter from 24% in the previous one. Eastick declined to give a target for this year, but said the company was looking to increase the numbers quarter to quarter.

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($1 = 3.7432 zlotys)

(Reporting by Anna Pruchnicka; Editing by Sonali Paul, Sherry Jacob-Phillips and Milla Nissi-Prussak)

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