Sales of TV sets, refrigerators and smartphones rose by 3.7% last year, much lower than in the previous years, when Romania was Europe’s champion in this department.
In comparison, the sales of home appliances, electronics, and IT products went up 13.4% in 2018, according to a GfK Temax survey.
“The overall market has obviously dropped (in March i.e.) and will continue to. We don’t have an extent of that for now, but we expect a 30% to 50% decline. We will clearly be affected, too,” says Dan Ostahie, founder and owner of Altex, the computer and electronics market leader.
The entrepreneur says online orders have increased but traffic and sales in physical stores have dropped. As allowed during lockdown, most of the stores of the company have stayed open, Ostahie says. Altex has 125 brick and mortar stores branded as Altex and Media Galaxy and two online stores, one for each brand.
“We voluntarily closed a number of stores where it didn’t make sense to keep them open. We closed where we had several in a city, where our stores were on the second floor of various shopping centers.”
Computer and electronics retailer Flanco announces contradictory sales trends, depending on products. Demand for laptops or bread makers is on the rise, while demand for refrigerators and washing machines is lower.
“It is hard to make a forecast about the market now. If the current situation continues until June, an estimate based on the situation in China, the impact will be a 12% to 15% decline. If it lasts longer, things become very complicated and my forecasts are no longer valid,” says Dragos Sirbu, Flanco CEO.
With the lockdown in place, sales of Flanco’s brick and mortar stores are down 70% year on year, while online sales are up 50% to 606.
“We saw an overall 50% decline compared with the same time last year. I mean here strictly the time after the lockdown was put in place, not the entire March. The March results are good because we got two weeks when we were fully operational.”
Flanco is the second largest actor on the computer and electronics market with RON1.2 billion (EUR250 million) revenue a year and more than 150 stores. Only 90 of them are still open today, mostly those in street front locations and those in retail parks. The stores in malls are closed.
“We keep our stores open to survive. We have bills from January and February that are due, which we should be paying from our revenue, but revenue is 50% lower than normal today. We should also pay wages and rent from the same revenue. While we’ve already cut wages, space owners are not willing to help overcome this difficult time. They are still asking for full rent and say the state of emergency is for retailers not shopping centers,” Dragos Sirbu says.
The computer and electronics market in Romania is divided among two large actors – Altex and Flanco, online retailers – either specialist (pcgarage) or non-specialist (eMAG), hypermarket and cash & carry chains and small independent retailers, whose numbers are dwindling.
This year’s decline estimated at 30% to 50% could take sales to EUR2 billion – EUR2.5 billion, the 2014-2015 level. A 15% decline would translate into a EUR500 million decline. Romanian consumers spent EUR3.5 billion on home appliances, electronics and IT products last year.
(English version by Loredana Fratila-Cristescu)