The only constant is the market leader, Altex, a company held by Romanian entrepreneur Dan Ostahie, which has kept the top spot for more than a decade. Behind it, however, are online stores or even online malls, starting with eMAG.
Independent retailers have disappeared, not just from among the top players but from the market entirely. The same goes for Domo, a specialist retailer, which was the second leading such company by sales for years.
The past decade brought other changes for this market, too, structural changes, changes based on the same factors: the financial crisis and the change in the consumer spending patterns. A decade ago, the battle was between the specialist retailers and the small independent stores. Altex, Flamingo (Flanco) and Domo were top players, followed by smaller ones like Rombiz and Primex.
Only Altex still stands today, despite having struggled with debt in the first years of the crisis. It managed to streamline without going insolvent and secure the top spot on the market. The revenue of the retailer with more than 90 Altex and Media Galaxy stores stood at EUR600 million last year, the best in its 25-year history. It accounts for almost one quarter of the market.
While Altex kept going, the others went insolvent and even bankrupt. Flamingo went insolvent in 2009 and narrowly escaped bankruptcy reemerging as Flanco, a company acquired by Iulian Stanciu, eMAG shareholder. Flanco was one of the few companies in Romania that managed to reorganize during insolvency, since only 2% companies in the same situation are able to do that in Romania.
Rombiz and Primex, as well as other small retailers, went insolvent, too, but failed to reorganize on an increasingly tougher market. The latest victim is Domo, a company founded by Lorand Szarvadi that changed hands multiple times over less than ten years and went through extensive restructuring when dozens of stores were closed for not being profitable. It became a top three actor with more than EUR100 million revenue. Until two years ago. In the fall of 2015 it closed its 75 stores citing difficult computer and electronics market. The operator of the network had previously filed for insolvency and the operations had been transferred to a different entity. With Domo going out, Altex and Flanco quickly moved in getting the best stores their former rival had.
Some of the customers went to online retailers which are getting more powerful on a market that increased by 9.2% last year. The top five retailers include three online stores or malls, that is eMAG, cel.ro and elefant.ro. They sell more than computer and electronics products, so they are more like online malls.
A major player on this market, though not as visible is modern retail, i.e. supermarket and hypermarket chains, discount and cash&cary stores. Their annual sales of refrigerators, laptops and cookers amount to more than EUR600 million to EUR700 million or 6% to 7% of their overall sales. On the other hand, independent retailers have become almost invisible on a market that is increasingly competitive and specialist retailers, online stores, and hypermarket and supermarket chains compete over price. Their high sales volumes allow them to negotiate better prices with suppliers and work with lower profit margins especially with high volume sellers.
What will happen over the next decade? Actors on the market usually talk about an omnichannel (online and offline mix) model and new years of growth.
The computer and electronics market reached EUR2.5 billion last year, for the first time after 2008. Growth slowed down in 2017 but executives in the business still expect an increase in sales, though not as high as before.
(English version by Loredana Fratila-Cristescu)