“Our target is to reach EUR1 billion in annual sales by 2020. It can be done,” Dan Stefanescu, general manager and owner of the company, told ZF.
Gersim has seen spectacular growth in the last few years because of the surge in the sales of smartphones and tablets and because of its partnership with Samsung, which became the local mobile phone market leader, replacing Nokia. Romania, where smartphones became top sellers as late as two years ago still has many years of growth ahead of it, since fewer than 40% of mobile phone users actually own a smart device.
Gersim’s growth will also come from new product categories, Stefanescu says.
“We will be looking at new product categories and new partnerships in the second half. The market in Romania will grow by another 10% to 15% in 2015, sales of smartphones will be higher than sales of feature phones, I think the percentage will be something like 85% to 15%.”
Asked about the best-selling phones on the market and his estimates for this year, Stefanescu said he still bet on Samsung remaining in the lead.
“Samsung dominates the premium segment of the mobile phone market, and will remain in the lead. Apple sells little in Romania, because it is too expensive for Romanian consumers,” Gersim’s owner and general manager said.
“Nokia is slowly dying, making room for Microsoft with the Lumia brand. Huawei has been promising to enter the market aggressively for several years now but hasn’t gone beyond a promise yet, while HTC is unable to grow beyond a certain level. Sony is unable to sell as much as intended; it has quality products though expensive for Romania, only LG and Lenovo are seeing moderate growth.”
As for the B brands of the local mobile phone market, Gersim’s owner believes some of the current players will disappear.
“Allview is the leader of the B brand market, taking advantage of the first come [first serve] on this market, followed by an army of other brands far behind: Utok, Evolio, Yezz, Kazam, Philips, Karbonn, Eboda, Vonino, Serioux, Tecmobile, Overmax and many more.”
This particular segment is extremely crowded, and it is hard for these players to stand out by anything other than price. The more the premium brands cut prices, the narrower the room to maneuver of these ‘manufacturers’ becomes, Dan Stefanescu says.
“The B brands have their role on the market, they come with advanced features at low prices and are most often the choice of the users at the first smartphone or tablet.”
According to available information, Brasov-based Visual Fan, which sells Allview products, became the second leading mobile phone vendor in Romania by number of units sold in 2014. Allview estimates it will sell 1.5 million phones and tablets in 2015 compared with 1 million in 2014.
The next few years will be difficult for these companies, Dan Stefanescu thinks.
“History has proven that the second choice of the users who buy a B brand first will be a premium brand, a natural choice for those who seek quality and reliability. Remember how Romanians in the ‘90s were too poor to buy Sony and Panasonic TVs – the market leaders at the time. They used to go for more affordable products: Funai, NEI, GoldStar. The second TV purchased was a premium brand. That is why Samsung and LG dominate the TV market today,” Gersim official says.
“The same will happen in the mobile phone and tablet industry. There will be only two or three competitors left on the market in three years at most, which will account for 80% to 90% of it. Those that survive will be fighting over the remaining percentage. The B brands will never disappear, there will always be customers for them, but on a mature market the share of such brands taken together will no longer exceed 20%.”
(English version by Loredana Fratila-Cristescu)