GEORGEL GHEORGHE

SENIOR MANAGER, MAZARS IN ROMANIA

"The Romanian online market has reached 2.8 billion euros in 2017 totalling 5.6% of all retail market in Romania"

Which sectors/industries are the fastest growing with online retailers?

According to recent statistics, Romania is ranked 4th on global index for internet speed by Ookla and 85% of population has access to mobile internet. Even with this leverage, the usage for online shopping in Romania was significant lower (23%) than European Union average (68%).

Latest numbers outline that Romanian online market has reached 2.8 billion euros in 2017 totalling 5.6% of all retail market in Romania. This is both a good and a bad sign. While penetration is low and there is room for growth in the market, retailers should have a close look where the new users come from and their social and economic status.

Almost all industries have presence in the online market from utilities to beauty products. However, we see more coverage on consumer electronics, fashion, home and deco and baby products. In general, products for which the buyers can have a reasonable amount of control over the acquired product.


What are the main challenges you see for recently online retailers in Romania (regarding growth, restructuring, etc.?)

In business, to be successful, you need to add value and enhance customer experience. Online retailers will need to ensure ease of use of their virtual store, accessibility from multiple devices and platform and smooth checkout process.

Current e-commerce players are fighting for the market using predictive analytics to put the products at head of the customer and prepare him for on click shopping. Another key aspect of the current market is logistics; delivery of goods should be key in reaching out to customers.

 

Now, maximising growth and profits is not coming from raising gross margins on products as the price comparison is made easy by online price comparison platforms. Growth factors can come from: fast delivery, stock availability, diversified product range.

Client acquisition and, most of all, client retention, represents also a big challenge. Analysis of user acquisition and user behaviour on the website provide significant insights for businesses.

 

Regarding business planning strategies, what are the 3 most important pieces of advice you would give to a foreign online retailer attempting to enter the Romanian e-commerce market?

 

Entering a fast-growing market as Romanian e-commerce could be a challenge even for experienced retailers. However, before proceeding one should consider first the local culture in terms of spending and payments as Romanians prefer to pay for goods only on delivery?

Secondly, diversity of products is another key factor to outline in the business plan and strategy of the new player. This could increase supply chain and logistics costs.

Finally, user experience should be top priority for e-commerce business in the upcoming years.

 

How do you foresee new and innovative technologies positively/negatively impacting smaller online retailers/entrepreneurs in Romania?

 

In the recent years, technology has advanced so fast in all domains and posed a lot of challenges for traditional business. For e-commerce industry innovative technologies could remodel the business. Internet of Things, Robotic process automation, Artificial Intelligence will impact these businesses too. We are seeing these innovations at work as we speak:

  • Chatbots providing instant information

  • Predictive analytics which uses AI to promote new goods or products to you

  • Robots and robotic process automation to speed up the supply chain and delivery process
     

Soon, it’s likely that our smart home will order products when needed and at the lowest price available on the market.

What advice can you give to players who are attempting to create a business plan to enter the Romanian e-commerce market? What should they absolutely do, or what should they do first?

New players in the e-commerce market should first consider that Romania is among the EU countries with low usage and little trust in terms of online payment. Any business plan should take that into account and plan for high marketing spending’s. Romanian consumers profile resembles the American type, hence, new e-commerce players should offer strong incentives such as discounts and free products from the start, especially if the product is not a niche one. When talking about niche products, time is necessary to create a community that can then act as a marketing agent and push the platform mainstream.

"One should consider first the local culture in terms of spending and payments as Romanians prefer to pay for goods only on delivery"

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