Romania’s IT skills should be pooled together instead of being sold piece by piece as experts in a company or another, and tasked with creating products, which can be exported, Iulian Stanciu, one of the country’s most influential IT entrepreneurs said on ZF Live.
He is a shareholder and chief executive officer of eMag, with estimated revenue of EUR262 million this year, and owner of mortar and bricks computer and electronics retailer Flanco and IT&C product distributor Network One Distribution. The companies Stanciu runs posted about EUR600 million revenue last year, and paid about EUR70 million in taxes (including VAT).
“I agree 100% that foreign investment should be encouraged. Yes, we do need to have programs encouraging foreign investments, which have helped the IT sector grow quite a lot and created a middle class in this business. But I also think that we should have programs aimed at Romanian companies, start-ups and large businesses alike,” Stanciu said.
“I would like a program supporting national champions of the economy in any industry, including IT. The opportunity we have in Romania in our IT sector is the very talented and valuable people. I think these skills should be put together instead of being sold piece by piece, tasked to create products, which products we could export. When we talk IT, we talk software, platforms.”
eMag does export a platform developed in Romania using Romanian technology, Romanian staff and managers, Stanciu said, adding, “we are a multinational based in Bucharest. What I want from the government is support for what we do abroad.”
A concrete example of such a support program for local investors is what China is doing, which pays the airplane ticket and booth at international stands for local entrepreneurs. In South Korea, the government took ten large companies 40 or 50 years ago and helped them in order to encourage exports. If we look at Samsung or LG, they do not have plants in South Korea, do not export products from there, but do all the research and technology in their home country, Stanciu said.
“I’m thinking support to penetrate markets abroad. I mean marketing, programs where the government pays for part of our costs with promoting Romanian products.”
For instance, eMag entered the Bulgarian market and is already the leading online retailer there. It was not easy, it entered a closed market with two or three powerful players that the newcomer disturbed. eMag also entered Hungary, where it is now the market’s number two with more than 10% market share and invested EUR2 million in that country in six months, Iulian Stanciu said.
The government must not forget about the Romanians who developed their own businesses and are now expanding in the region and pay attention to foreign investors’ requests only, he added.
“A lot of the companies on the local market have potential. Gecad and BitDefender for instance are strong software companies that went international, we have the Shopmania project exported to 30 countries from Romania. There are very many extremely valuable entrepreneurs that keep a low profile, because they export their products and earn very high revenue,” Iulian Stanciu said.
Romania has access to state-of-the-art technology now without a 10 to 20 year gap, but merely a 24-hour delay before it becomes available to it.
eMag has 150 people doing IT development. The company posted growth across all its divisions in the first quarter. The online retailer saw growth of 30% compared with the first quarter of 2013. Flanco, another retailer that Iulian Stanciu owns, is in line with the market growth, having seen sales up about 13%.
eMag wants to diversify and sell food and automotive accessories. It also seeks expansion to financial services market, as it is already offering consumer loans to customers.
“eMag has three avenues for growth. First we grow organically on our existing segments, [second] horizontally by adding new segments and third by scaling our business model to international markets,” Iulian Stanciu said.
(English version by Loredana Fratila-Cristescu)