“Sales on the market rose by about 10% in the first half. The first half performance gives us courage for the second half, which is traditionally better for our industry,” said Dan Ostahie, the owner of the Altex group and one of the most known Romanian entrepreneurs.
The Altex group, which includes both the stores under the same name and the Media Galaxy stores, ended last year with EUR258 million revenue, less than 2% above the 2012 level.
The durable goods market was one of the worst hit by the crisis, shrinking to less than half of its boom days value in the first two years of crisis, 2009 and 2010. The lending freeze, the lack of confidence and the change of consumer spending behavior took the sales of TVs, refrigerators and computers from EUR2.5 billion in 2008 to EUR1.2 billion in 2010, the worst year of the crisis for the industry.
Sales increased slightly in the following years, though not by any more than 10%. Companies in this business expect growth of 20% for the durable goods sales in 2014, closer to boom years’ growth rates. They say first half growth stood at 10% to 15%.
“The market increased beyond expectations, by 14% in the first half compared with the same period of 2013. We expect a very good performance of the market for the entire year, that is 20% compared with 2013,” says Iulian Stanciu, one of the shareholders of Romania’s leading online retailer, eMag and one of the most influential entrepreneurs in the IT industry.
He also runs the local operations of eMag and is also the sole owner of computer and electronics retailer Flanco, whose sales stood at some EUR140 million last year.
The growth drivers in the first half were the sales of phones (up 60%), small home appliances (15%), large home appliances (12%) and TVs, the entrepreneur says.
“World Cup drove sales of TV sets up,” said Dan Ostahie in his turn.
The data of the National Statistics Institute confirm the market data, as the retail sales, the most important consumer spending indicator, went up 8.6% in the first half. Sales of non-food products (clothing, cosmetics, computer and electronics products, furniture) saw the highest growth of all, over 12%.
The local consumer goods market has growth potential considering Romania is lagging behind in terms of spending per capita. A Romanian spent EUR85 on computer and electronics products last year, about three times less than a Czech, almost half of what a Hungarian spent and eight times less than a German. Moreover, it is also lagging behind Europe in terms of household penetration of computer and electronics products.
On the other hand, the online market was one of the least affected by the crisis, and it largely ate into the market share of the small independent retailers that were forced to close up shop.
“The market grew by 10% to 15% because of the rising demand for mobile phones and smart TVs. Judging from the performance lately, we believe the online market will continue to grow by 20% to 25% by yearend,” says Tiberiu Pop, owner and chief executive of Corsar Online, which operates the cel.ro online store.
His company posted 30% higher sales in the first half and the number of orders rose by 40% compared with 2013.
(English version by Loredana Fratila-Cristescu)