Romanian IT&C brands wrestle international giants

Romanian IT&C brands have to fight on a market that is dominated by the presence of international giants. Surely, in competing against the likes of HP, Acer, Asus, Toshiba, Dell and Lenovo, a very clear strategy is needed to survive and prosper? Up to a point, the strategy is the same for local and global firms: production takes place in Asia, as in the case of many international producers. However, Romanian players claim to have a unique advantage: the ability to understand the local market and adjust to its specific needs.

Otilia Haraga

Serioux, the brand developed by Asesoft Distribution, already includes quite a large range of products. It was launched five years ago in Romania and reached a sales volume of more than 1.5 million products.

The brand’s production happens in Asia, especially China, Taiwan and Hong Kong. The products are then developed in Romania, starting from the way the range is conceived according to the specifics of the place and continuing with the documentation, product design, packaging, user manuals, localizing menus as well as software in Romanian. Support is also provided in the local language.

The brand covers a wide range of products, from GPS navigators, portable media players, desktops and controller gaming devices to headphones, chargers and accumulators.

Specific products include the first Romanian e-book reader DigiBook E10, the GPS Serioux NaviMate, digital photo frames and portable media players (MP3/MP4).

“We were convinced from the start that the development and sale of products under our own brand name would be a winning move. The main reason for this is the opportunity to build a range of products tailored to the needs of the local market from the point of view of specifications, price, positioning and mix of products,” Razvan Ziemba, general manager of Asesoft Distribution, tells Business Review.

But what’s the chief benefit of being a smaller, local player? “The main advantage of Serioux products is that we can adjust immediately to the requirements and feedback from the market, unlike global brands,” says Ziemba.

Serioux already tops the market of office computers. Of the total 172,000 units sold last year in Romania, 48,400 were under its name, according to data from IDC.

The brand ranks in the B+ range, so price is another competitive advantage. “We have managed to be more competitive as far as price is concerned against various important brands that are positioned similarly,” says Ziemba.

He adds that the main argument in the brand’s favor is that the development and distribution of products is done in the country. “We will always have a much greater focus than a Romanian distributor who is selling a Polish private label, for instance. The differences in price compared to similar products by the competition can be as high as 30 percent,” says Ziemba.

Last year, sales of Serioux products amounted to USD 10 million. This year Asesoft Distribution expects a 40 percent growth in sales under the Serioux brand to EUR 14 million, which is twice the growth that the company estimates for the Asesoft Distribution business as a whole.

Last year Serioux expanded its portfolio with new products such as a new line of mice, keyboards, web cameras, the video camera HDDV-PV720 with high-definition recording, the SDS-ESCRH docking station as well as a full range of memory cards and USB sticks. Recently, it launched new GPS models which use navigation software Sygic.

Asesoft Distribution already has a clear strategy in place to boost the development of its brand. “We plan to introduce new categories of products in the portfolio from the second half of the year. Among these new products will be laptops, netbooks and tablets, HD media players as well as accessories for Playstation, XBOX and Wii consoles,” says Ziemba.

Another important step for Serioux this year will be international distribution, which will begin with markets such as Hungary and Bulgaria. Moreover, Asesoft Distribution is in advanced discussions with other distributors in Central and Eastern Europe, as well as in other countries.

“For Asesoft Distribution, the development of its own range of products has meant both investing significant sums of money in marketing its own products and optimizing costs (and, implicitly, shelf prices) by eliminating intermediaries and optimizing logistics. We also saw an opportunity to approach external markets with the Serioux brand,” says the general manager.

Another company that is betting on customization is E-Boda, for much the same reasons. “It is very simple: no international brand will be able to mould to the needs of the clients of the local market. Here we come into play and this is our role: to get to know the customers and offer a product that is tailored to their needs and not an international standard product,” Adrian Murgu, representative of the technical-development department of SC Rosal Import Export SRL, tells Business Review.

E-Boda is seriously targeting the market of Romanian IT&C brands, planning launches in August-September. It will launch a PC tablet, an e-Book with TFT, an e-book with E-ink and a portable mini-projector.

The price will not necessarily be cheaper than those of its competitors, but in line with the specifics of the product. The company will probably offer extended battery capacity, support in Romanian, extended technical support at no cost, irrespective of the situation.

“Most likely the annual production in 2011 will not surpass 2,000 items. However, we believe sales will explode in mid-2012 for these gadgets,” says Murgu. The products will be made in Asia. “Today, we cannot say that the labor force is cheaper in other countries, including those on the Asian continent, than in Romania, but we can say that it is more qualified,” says Murgu.

This year, the company is not pinning its hopes on profit. “Our goal this year will be only to take our place on this market without the intention to ‘overturn’ the charts,” says Murgu.

Another company that relies very much on the uniqueness of the local market and customization is Maguay, a local supplier of complete IT solutions, which has launched its new range of portables, MyWay, this month. MyWay replaces Maguay’s previous brand of portables, eXpertBook. It is meant to have a friendlier and more expressive identity.

The brand was conceived with the help of branding agency Grapefruit and stakes a claim to three competitive advantages: configurability, latest generation technology and the best and fastest service for laptops in Romania.

“It’s an act of courage through which Maguay will test the openness of the Romanian public to what is unique, but it will also make a bold statement about the Maguay name as a brand that is highly configurable, relevant and which trusts itself and its own origins,” says Edward Pughin, operational manager of Maguay.

Starting from the premise that configurability is the factor which makes the difference in the case of the MyWay brand, the company has also personalized the frame of its products.

“We linked this idea to the concept of what makes a quality Romanian product. The convergence of these concepts led us to the idea of launching limited series of MyWay netbooks, customized with images of authentic Romanian values from the past to the present moment. And this has involved cultural values,” says Stefan Liute, strategy manager of Grapefruit branding agency.

The MyWay brand was born at the same time as the launch of a limited edition of netbooks with customized covers. In partnership with the Romanian Peasant’s Museum, MyWay developed two types of design for its netbooks, a sculpted wooden weaving distaff and a decorative model from a dowry chest in Transylvania.

“Historically, many Romanian products left the aesthetic aspect as a secondary consideration, but our brands breaks from this ‘tradition’ and is in tune with good practices that can be observed now everywhere in the world,” says Pughin. “We were attracted by the idea of combining tradition and technology, the old and the new, in an unprecedented technological and cultural venture in Romania.”

otilia.haraga@business-review.ro

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