Speaking at The World Retail Congress in Barcelona Komex SP.Z.0.0 director – supervisory board member Mark Olbrich said the situation in Central Europe (the original emerging markets) has changed. “A developed marketplace now exists,” he said. But he added that “it had not finished as there is no strength or depth yet”. He said: “It is still extremely attractive and unsaturated market”.
Consumer purchasing power is rising “on a whole society basis” rather than just the top 10 or 15 per cent as in markets such as India, according to Olbrich. He added: “Spending power is virtually guaranteed to rise and in time catch up to Western European levels. “Every year everyone has 10 or 15 per cent more money in their pockets,” he said.
Olbrich said the success of early entrants to the market is testament to the great opportunities for retailers. “The numbers speak for themselves,” he said.
The scale of the opportunity in Central Europe is particularly large because it is relatively simple to roll out into multiple countries. Enterprise Investors president Jacek Siwicki said: “This is no longer about investing in one individual country. It’s investing in a country, building a base and then rolling out across the region.” He said that all countries across the region had developed in a similar way and followed similar patterns.
Olbrich said there are still early bird opportunities in some markets such as Romania and the Ukraine. He said the Ukraine as “still sleeping, but a giant” and described it as “the next juicy plum”.
The market suits entrants from Western Europe particularly well, according to Olbrich. This is because of the relatively short distance to travel and similar, although not identical, consumer tastes and preferences.
Olbrich warned Western retailers thinking about expanding into the region not to be arrogant and believe that they always know best. It is important to have the right mix of local and ex-pat employees.