“This year has been weird because the market had its ups and downs which did not correspond to the seasonality of sales recorded in Romania in the past. In our business, there used to be a clear seasonality – the first six months are weaker, and sales surge in the next six. There are no sales peaks anymore. I think this is to do with consumer behavior and with financial evolutions in Romania,” said the Germanos manager.
He says the Christmas period will remain a “hot” one for telecom sales, but estimates consumer behavior changes will continue, and probably also be linked to the progress of the economy.
“Let’s take an example: if the financial situation is stable, perhaps many people plan to buy chocolate for Easter for instance. If, however, their financial situation is not stable, chocolate will still sell, but in lower amounts than in previous years because they will rather buy milk, or cover other needs with that amount. Seasonality is a bit vague, but Christmas remains a ‘hot’ period. Whether this Christmas will be a time with twice or three times higher sales than in a regular month, I cannot say at the moment.”
On the other hand, 2011 is the best year of the last three for Germanos, with the retailer expecting to end the year with a profit, after it saw losses between 2007 and 2010.
“The financial crisis has made its mark on the evolution of Germanos’ financial figures. But 2011 has been the best year for the company’s activity since 2008. We will end this year in the black,” said Karousos.
According to Finance Ministry data, the turnover of Germanos Telecom Romania fell 20% in 2010, to EUR88 million, with losses amounting to EUR6 million.
On the other hand, said Karousos, the company was mindful of its costs and continued to cut some of its bigger expenditures, rent expenditures.
“We made big savings by renegotiating rent for commercial spaces. It was a very healthy process – owners understood the environment we’re in and the vast majority of them were open to talks and preferred to work with a trustworthy client than to one who would promise a lot but ultimately prove unreliable.” He says the company has cut rent costs constantly in the last two and a half years. Will it continue to pay lower rent next year, as well? “We will definitely try to renegotiate contracts. This has been a constant pursuit for us and it is not something we do only with rent, but with all our suppliers.”
The commercial manager of Cosmote Romania, Panos Makris, says the turnover of Germanos is on the rise, amid accelerating sales of smartphones.
“In the first part of this year, smartphone sales saw a significant rise because manufacturers cut prices, making them more accessible to the wider public. Sales of phone accessories also increased,” said Makris.
“We are no longer in a position where you had to pay EUR400 for a smartphone. Now prices are below EUR400. Of course at this price you have to adjust your expectations somewhat, but the basic functions are covered.”
In July, the average net wage in Romania was less than EUR350, according to data from the Statistics Institute. The local subsidiary of South Korean company Samsung, which says is leader of the Romanian smartphone market, estimates 600,000 smartphones will be sold on the Romanian market this year.
How is a smartphone sold? The vast majority of people come into the stores already knowing what they want, says the Germanos manager.
How come? In the past manufacturers did not advertise one phone model very intensively, but now every manufacturer has their “hero” model – Apple has the iPhone 4S, Samsung has Galaxy S 2 because everyone wants to boost their market share and in order to do that they have to move as fast as possible.
Germanos has not invested this year in any major store remodeling, says Aris Karousos.
“At the moment I am monitoring what is going on on the market and whether there is truly demand from customers for us to change the stores. I will not go into a discussion of the type – we will invest because someone else has invested. We will invest when we feel there is demand to do so from our clients. According to our own calculations, Germanos is doing very well on the market at the moment. We have to wait a bit and seen what will happen and what the Romanian economy will look like over the next two years.”
(English version by Daniela Stoican)