“In Romania, too, the market will come to be concentrated in the hands of fewer players,” believes the executive. He adds that for strong retailers this will be a favorable development, but for end clients it won’t.
“When the market is concentrated in the hands of two players, it is very difficult for clients, as they do not have many options, as well as for suppliers as if they are not present in the stores of one of the players, their business will suffer,” says the Austrian executive.
TCC is a British group with revenue of above EUR1 billion globally, present in around 70 countries. The company’s clients include food retailers and companies selling fuel. TCC creates loyalty programs for companies. In Romania, its clients include Kaufland, OMV Petrom, Penny Market, Mega Image and Metro Cash & Carry.
The British group arrived in Romania in 2008, when it signed campaigns for OMV Petrom and Real. For the former, it created a campaign that offered balls as a gift. For Real, the gift was a set of knives. The products are sold by TCC to retailers, which then offer them for free to clients as part of a loyalty program.
TCC does not its own production, but subcontracts plants from around the world.
Since 2008, the group has created 23 campaigns in Romania. “We chose to come to Romania in 2008 as the market had potential, though it was highly fragmented. Today, we still see a huge growth potential here”.
TCC generated revenue worth EUR14 million in Romania in the past financial year (August1, 2013-July 31, 2014), flat from 2013.
The company is managed from Switzeland and does not have an administrative entity in Romania. “In the first two years, we coordinated the business from Austria, but we then decided to hire Romanians. There is huge growth potential, we’ve budgeted revenue of at least EUR20 million for this year”.
Manfred Litschka says all retailers in Romania are focusing on price, believing this is the only way they can attract clients. Retailers are the ones that shape up consumers’ behavior and amid a focus just on price they will no longer be willing to buy a product unless it has a reduced price. Clients are not as simple as retailers believe and they are not focused just on price, he adds.
Counting just on price, companies will have difficulty in gaining their client’s loyalty, believes Litschka.
(English version by Catalina Apostoiu)