“There are three Romanias: the country of villages, the country of cities and the third Romania is the capital city,” Vlad says.
Under the circumstances, each of the three followed different paths of development. Bucharest is the most developed by far, followed by the rest of the cities. The rural areas, where 40% of the people in Romania live, are lagging behind. This explains the gaps between Romania and other EU countries, in terms of both macroeconomic indicators and household equipment.
In Romania, only 75% of households own a washing machine and only 60% own a vacuum cleaner. This is far behind the Western countries, considering there are parts of Romania without running water, electricity or indoor bathroom. All households own washing machines and vacuum cleaners in Germany, so that such indicators are no longer included in statistical data.
Vlad, who is running a 19-store network, says gaps between Romania and other European countries can be explained by the large number of people who live in villages and the poverty of most of the rural population. He also believes Romania has been unable to implement steps that should lead to stabilization and economic growth in agriculture and implicitly to an improvement in the financial situation of the population living in villages.
Selgros’ boss says the gaps between Romania and other EU countries can be narrowed once the incomes of rural area population increase, because the potential here is huge.
“I don’t think we’ll see a boom of durable goods again, in urban areas or in Bucharest, either,” he added.
Vlad explains a solution would be to lay the groundwork for a modern and efficient agriculture. The businessman says Romania has enough fertile land, and good premises for developing livestock farming. The Selgros boss says that it is not the food, but the non-food sector (electronics, home appliances, cars and especially agricultural machinery and equipment) that will see the highest growth.
The non-food sector and especially the home appliances segment were among the worst hit by the financial crisis. The market of electronics, home appliances and IT products stood at EUR2 billion in 2008, an all-time high, as people took loans to buy whatever they needed. The crisis drove the market down to EUR1 billion in 2010 and the first positive sign came last year, when the market rose by 10%.
All those on this market say it cannot go anywhere but up, and people in rural areas will be one of the key growth drivers.
(English version by Loredana Fratila-Cristescu)