BR/05/2020 by Business Review

WHERE ROMANIA TALKS BUSINESS May, 2020 / Volume 24, Issue 4

www.business-review.eu

FIVE INDUSTRIES THAT COULD WIN IN ROMANIAâ&#x20AC;&#x2122;S NEW NORMALITY

THE LONG WAY BACK FROM THE CORONAVIRUS SLUMP

IN CRISIS, COMMUNICATION SHOULD BE STRONGER THAN EVER

TAKING A LOOK AT THE POST-PANDEMIC ECONOMY

CUSTOMER CARE: BEING A TRUSTWORTHY PARTNER IN CHALLENGING TIMES

www.business-review.eu Business Review | May 2020

EDITORIAL 3

• Editorial •

Anda Sebesi • Editor-in-Chief •

COVER STORY 6 Customer care: Being a trustworthy partner in challenging times

10 Vodafone Romania Foundation makes strong commitment in fight against coronavirus

12 Keeping Romanians connected in times of crisis

Customer becomes king

ENTREPRENEURSHIP

18 Drops in startup valuations expected over coronavirus

he SARS-CoV-2 economic and social crisis has forced individuals and companies across the globe to rapidly change the way they live and work. Many elements of life and

BUSINESS AND MACROECONOMY

business are being challenged, and in some cases, the new normal may turn out very different to what we had before. Currently, all companies are doing their best to get through this pandemic – from ensuring an effective crisis response to managing supply chain

20 Business opportunities during the pandemic

disruptions and safeguarding the well-being of their employees by

22 The long way back from

adjusting daily working practices.

the coronavirus slump

In such a challenging context, customer care has become crucial

MEDIA & PR

in keeping customers satisfied and ensuring the future success of any company, regardless of its line of business. Leading organisations are reorienting their customer experience efforts to meet their customers’ primary needs, such as safety, security, and every-

24 Digital gets boost during

day convenience. As a McKinsey recent article says, these actions

COVID-19 pandemic

will inevitably speak louder than words in a world where compa-

26 In crisis, communication

nies are increasingly sending a message along the lines of “we are

should be stronger than ever

here for you.” By consciously providing empathy and care during this crisis, companies can build a foundation of goodwill and long-

CITY

lasting emotional connections with the communities they serve. Apart from the negative effects that the SARS-CoV-2 pandemic has generated, studies conducted in Romania and abroad have suggested that companies established during the financial crisis

34 Worldwide signs of solidarity against pandemic

that started in 2008 were among the most successful during the

36 Social distancing in

recovery period. This is because there was empty space left by

the restaurant business: what’s next for this industry

companies that had gone bankrupt or insolvent during the recession, and assets were undervalued. With this in mind, we can only hope that the local economy may see in this unprecedented crisis a real opportunity for further development.

38 More innovation & optimism during the pandemic

EDITOR-IN-CHIEF: Anda Sebesi JOURNALISTS: Aurel Constantin, Mihai Cristea, Romanita Oprea, Oana Vasiliu CONTRIBUTORS: Ovidiu Posirca, Sorin Melenciuc, Claudiu Vrinceanu COPY EDITOR: Anca Alexe PHOTO EDITOR: Mihai Constantineanu PHOTOS: Dreamstime ART DIRECTOR: Raluca Dumitru PUBLISHER: Bloc-Notes Media Network ADDRESS: 58 Stirbei Voda Street, 3rd Floor, District 1, Bucharest, Romania LANDLINE: 031.040.09.31 SALES MANAGERS: Radu Fireteanu, Alexandra Rosca EVENTS MANAGERS: Mara Dragoiu EVENTS & MARKETING MANAGER: Luiza Luca PRODUCTION: Dan Mitroi DISTRIBUTION: Eugen Musat EXECUTIVE DIRECTOR: George Moise GENERAL MANAGER: Catalin Alistari USA MANAGER: Oana Molodoi FOUNDING EDITOR: Bill Avery EMAILS: editorial@business-review.eu, sales@business-review.eu, events@business-review.eu SUBSCRIPTIONS on Manpres Distribution Business Review is a member of Fwei

Publicație auditată pe perioada Apr 2015 - Mar 2016

ISSN NO. 1453-729X

www.business-review.eu Business Review | May 2020

4 NEWS

WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at mihai.cristea@business-review.eu

GECS 2020: 47 percent of companies have experienced fraud in the last two years By Mihai Cristea of the global concern. The crisis caused by the COVID-19 pandemic takes all the attention, while organisations and the population become more vulnerable to other risks and all international organisations

Oana Ionascu a Dentons Senior Associate, has been promoted to Counsel, as part of the “Dentons Romania 2.0” development plan. She joined the firm in 2007 as a Senior Associate, left Dentons in 2014, and returned to the same position in 2015. Oana has previously been a Noerr Associate (2004-2007) and a partner in her own law practice (2014-2015). Oana Ionascu has 14 years of experience in banking and finance, with a focus on real estate finance, project finance, and other financing structures, both syndicated and bilateral.

David Cuenca the president of CHEP Latin America, was appointed by Brambles Group as President of CHEP Europe, starting with July 1, 2020. The appointment comes as a result of the retirement of current president Michael Pooley, after a 17-year stint with the company. Cuenca joined Brambles in 2000 as a Customer Service Regional Manager for Catalonia. Between 2010 & 2013, as CE & Balkans General Manager, he executed the company’s market entry into Romania. page 5

issue warnings that cases of various financial scams have multiplied, especially cybercrime and social fraud, and the amounts involved can be

The high level of cybercrime is in line with technological developments

significant,“ said Ana Sebov, Forensic Leader at PwC Romania. Most industries have been

Fraud and economic crime

fraud (35 percent), cybercrime

targeted by cybercrime, with

rates remain at record highs,

(34 percent), asset misappropria-

PwC respondents noting that

according to PwC’s bi-annual

tion (31 percent), and bribery and

these incidents have signifi-

Global Economic Crime and

corruption (30 percent). In fact,

cantly affected companies’ ope-

Fraud Survey (GECS) 2020,

customer fraud increased the

rations. They have shown that

with 47 percent of companies

most, by six percentage points,

customer fraud and cybercrime

having experienced fraud in

from 29 percent two years ago.

are the most disruptive types

the last two years – the second

“The high level of cybercrime

of crime. Globally, all regions

highest reported level in 20

is in line with technological

have experienced customer

years. The amount of losses

developments. This year we

fraud in the last two years, with

reported by respondents due

could see a new record in fraud,

the Middle East (47 percent

to fraud amounts to USD 42

given the increased activity

up from 36 percent) and North

billion. The main types of eco-

and the increasingly elaborate

America (41 percent up from

nomic crimes reported in the

fraud schemes by hackers/cyber-

32 percent) seeing the biggest

last two years were customer

criminals who take advantage

increases.

Majority of employees want to keep working from home By Aurel Constantin Most Romanian employees (70

cording to Colliers International.

percent) want to continue to

Of these, 60 percent believe that

work partly from home even

working remotely would be use-

after the measures to prevent the

ful at least 1-2 days a week, while

spread of coronavirus and the

10 percent would like to work

state of emergency are lifted, ac-

from home for 3-4 days a week in

Working from home becomes the “new normal”

www.business-review.eu Business Review | May 2020

NEWS 5

Cosmopolis acquires 15.6 hectares of land Doru Postelnicu another Dentons Senior Associate, has also been appointed as Counsel, as part of the same “Dentons Romania 2.0” development plan. With 14 years of experience, he specialises in corporate and M&A, with a focus on real estate. Previously, he has been a Noerr Associate, Head of Legal at Societatea de Constructii CCCF SA, Senior Associate at Salans, and Legal Advisor at BCR, before joining Dentons in 2015 as a Senior Associate.

By Aurel Constantin In the midst of a health crisis, Cosmopolis has continued its major investments and completed the acquisition of another 15.6 hectares of land located in the immediate vicinity of the complex. These are added to another 10-hectare lot purchased last year. The land is to be used to expand the complex by building houses, green spaces, swimming pools and other facilities, according to the established model. ”We continue to invest and aim to build another 500

The land is to be used to expand the complex

apartments and villas this year, along with the infrastructure

aged us to continue the expan-

the same mix of facilities that

of a real city, and seven more

sion and purchase this large plot

have consecrated Cosmopolis:

swimming pools. The existing

land. This year alone, we will

swimming pools, generous

facilities, the diversity of the

invest over EUR 22 million in the

spaces for green areas, relax-

type of housing and the fact

development of Cosmopolis,”

ation areas, and playgrounds.

that we offer a unique lifestyle

said Ahmet Buyukhanli, Presi-

”In the next period we will

have led to demand for housing

dent of Opus Land, the company

inaugurate the second exit

in Cosmopolis remaining con-

that develops Cosmopolis.

road from the project, towards

stant, even in these turbulent

With the acquisition of 15.6

Tunari,” said Gabriel Voicu, vice

days. The major interest from

hectares of land, the procedure

president at SVN Romania and

those who want to buy a house

to design the general plan for this

project manager for Cosmopo-

or an apartment has encour-

area has started. It will include

lis.

Aristotelis Chantavas Head of Europe for Enel Green Power, has been elected as the new President of SolarPower Europe, after elections were held remotely on March 26. Chantavas is an experienced executive with a demonstrated history of working in the renewables industry both in the US and in Europe. He has served as Head of Europe at Enel Green Power since November 2018.

the next period. To ensure employees can practice social distancing at the office, employers need to consider some changes in the setup of the space and furniture, especially in the case of open space offices. The recommended distance between employees is of two linear meters, which means that companies will need to increase the space allocated to each employee from 8 square meters, which is currently the average in class A office buildings, to over 15 square meters.

Ronny Pecik was appointed member of the Executive Board at IMMOFINANZ. Pecik will be the company’s CEO. He is a leading entrepreneur and has many years of experience in executive and supervisory roles. Pecik will serve a three-year term in his new role, starting with May 4, 2020. From this date, Dietmar Reindl (COO) and Stefan Schönauer (CFO) will also serve on the executive committee.

6 COVER STORY

www.business-review.eu Business Review | May 2020

COVER STORY 7

CUSTOMER CARE: BEING A TRUSTWORTHY PARTNER IN CHALLENGING TIMES

The SARS-Cov-2 pandemic has forced both businesses and individuals to quickly adapt to a new context and adjust their operations accordingly. Business Review talked to Ioana Mihailescu, Customer Operations Director at Vodafone Romania, about the importance of customer care in times of crisis and how the company has proactively addressed its customers’ needs in order to remain closer to them than ever. By Anda Sebesi How have customer care needs changed during the SARS-Cov-2 pandemic in Romania? When looking for support or facing a problem, customers generally expect availability, friendliness, clarity, and a quick solution to their requests. The pandemic, however, shows us that customers are more likely to turn to companies they trust to deliver on these needs, even in times of crisis. I believe that customers are now expecting us to be there for them as a trustworthy partner in challenging times. Our mission – now more than ever – is to ensure a reliable and stable network that is capable to support everything they need to do these days, with the best quality mobile and fixed communications services, as well as continuity in our customer care activities. We also understand how important it is to go the extra mile for each and every customer and deliver on their needs, which are very different now as they are facing new challenges during this difficult period. If we look at the numbers, I am proud to see that we’ve really succeeded in supporting our customers in a truly meaningful way and that our commitment has had the best response. In the last three weeks, we have recorded significant improvements in customer loyalty and the number of cancellation requests has dropped, which shows that cus-

www.business-review.eu Business Review | May 2020

8 COVER STORY

tomers understand it is important to stay with the trusted operator

need more data traffic for schooling or gaming and entertainment

with whom they have built a relationship over time.

are offered upgrades for their mobile or fixed bundles. Additionally,

From a channel perspective, due to the COVID-19 crisis, we have

we are supporting students’ access to online education through a

had to adapt by limiting operations in retail and direct sales to com-

dedicated special offer called Student Pack, which is available in the

ply with social distancing requirements, so we planned for a seam-

Vodafone Shake app, consisting of 40 GB of monthly data traffic, en-

less and fast switch in digital and customer operations channels for

abling them to watch the #TeleScoala online courses on the TVR You-

those customers who preferred face to face interactions. While we’ve

Tube channel. Also, students aged between 16 to 26 get free access

kept our presence in 55 percent of our physical locations thanks to

to a number of online educational platforms, without using up any

the efforts and dedication of our retail employees, we have intensi-

data traffic. Moreover, customers who need technical assistance for

fied communication, education, and support for our customers to

TV and fixed internet are serviced by our field technicians, who are

ease their use of digital tools or calls and we’re seeing good progress

safely equipped and instructed regarding the preventive measures

in this direction.

they need to take in order to protect themselves and the customers,

From a resourcing point of view, we have seen a shift in the inter-

or remotely through our call center consultants.

vals when customers interact with us. Normally it would have been quite challenging to adapt quickly, but the work from home model are no longer limited by the time it took to physically reach the office

What are the primary needs of your corporate customers right now? How have they changed? What has Vodafone been doing to support them during these times?

and are able to login much faster and be there for our customers

Generally, business customers have two main needs: proper and reli-

when they need it most.

able connectivity and fairness of price. The COVID-19 crisis instantly

has allowed us to accommodate the new peaks more easily, as agents

Social media, especially

impacted some of our business

Facebook, is the channel that

customers on the connectiv-

has been growing fast and we

ity side. Many people started

have intensified our efforts and

working from home, therefore

invested more resources, not

the huge demand for our work

only to have a deeper engage-

from home solutions meant

ment with the social commu-

faster implementation, and

nity, but also to spot and solve

our back office teams went the

customer requests directly

extra mile to quickly activate

through this channel, where

hundreds of services for our

users are trying to reach us.

customers so they would not face any disruption in their business. We’re also seeing an

What trends have emerged in the requests coming from your residential customers during this period?

ic crisis has affected to a greater extent, with businesses that had to

To us, caring for our customers means supporting them with truly

halt their activity completely due to social distancing requirements

relevant and meaningful offers and solutions. Of course, during

or others that have experienced a significant slowdown as a result of

these difficult times, there has been more need for our customers to

the falling demand. Together with our Account Managers and com-

stay connected with their loved ones. We have proactively addressed

mercial teams, we’ve been working closely with those businesses to

this need; from the very start of the crisis we have provided tailored

find solutions to bridge the gap until they get back on track.

offers to facilitate customers’ communication with their family and

isolated trend in some sectors of economy which the pandem-

We do foresee changes in the business segment in the future, such

friends, through unlimited roaming calls to Romania from France,

as accelerated digitalization. We take our role as a business partner

Italy, Spain, Germany, UK, and Austria, all free of charge, as well as

for our business customers seriously and we are constantly con-

international minutes for mobile and fixed lines for calls from Roma-

nected to understand their current and emerging needs, aiming to

nia to those destinations.

design solutions for each and every one of them together with our

There are also other trends that have been triggered by the new

commercial teams.

context, which in terms of customer care we address through our digital channels. Customers who were used to paying their bill in cash and who could not perform such a transaction while staying at

What are the measures Vodafone has taken in order to provide the best customer care services during this crisis?

home have been educated by our agents or through online tutorials.

We have two combined approaches in our customer care activities.

Supporting our customers in using digital tools to manage their ser-

One is to act proactively in order to address the recurrent needs that

vices, access and pay their bills is today a large part of our customer

emerge across the customer base, while the other one is to support

service activity. Customers who have kids or teenagers and who

customers on a case by case basis, with personalised commercial

www.business-review.eu Business Review | May 2020

COVER STORY 9

offers or technical solutions, depending on each specific situation.

for mobile customers and MyVodafone Fix & TV app for our fixed

As a proactive care measure, we took the commercial decision to

services customers. It is helping a lot in these times, as we have in-

expand bundles with extra resources – data traffic, roaming, interna-

cluded a bill digest section, where residential and business custom-

tional minutes, etc. – and we will continue to listen to our customers

ers can find information about their bill much more easily. We see

and provide more customised offers in our effort to help everyone in

an average uptake of 25 percent in digital payments and 15 percent

a way that really makes a difference in these times.

in prepaid recharges. We are also redesigning the help and support

I also believe that some of the measures we took long before

area, either through digital content or through human support. Our

this crisis enabled us to provide the best customer care services

campaigns are backed up by human agents in all touchpoints to edu-

today and to be prepared to offer the same quality of services in an

cate customers with step by step tutorials on how to use our digital

extremely difficult context, which nobody could have anticipated.

tools. I also want to mention Andreea, our automatic speech recogni-

One is our strategic plan to digitize customer operations and we are

tion persona that answers *222 calls – we are currently improving

accelerating our actions to deliver more on this channel. Another

her and with the help of our Big Data team, we have identified the

one is Vodafone Romania’s continuous innovation and investment

most common queries and this has enabled us to generate faster

in the networks to support the growing demand. Especially during

responses.

such moments, the resilience of the communications networks, their capacity to accommodate massively increased traffic without affecting service quality are so important. I am very proud to say that we have great commercial and network teams and the customer-centric view is present in all our functions.

What are the main challenges Vodafone is facing in its customer operations during this crisis and how is the company dealing with them? There are challenges related to

As a reactive measure, there

readiness for the immediate future,

was the decision to move the cus-

but also to the sustainability of to-

tomer care team outside the office,

day. No one has ever been through

to work from home, and, most im-

a similar crisis, so dealing with

portantly, we made that decision

several scenarios is normal. Our

one week prior to the enforcement

plans for the future include accel-

of the State of Emergency, which

erating our digitization efforts and

gave us the time to safely move our

extending to business customers

people and also had zero impact

even more. Furthermore, we will

on the availability of customer care

continue the integration process

services. Today, all our metrics are

between mobile and fixed services

looking very well. We’ve seen an

and deliver on our convergence

increase in customer satisfaction

plans without affecting business as

– measured through the Net Pro-

usual in either area. And we have

moting Score, which has reached

to prepare for what’s next, after the

an all-time high. The abandoned call rate has decreased compared to the period before the crisis and

lockdown is softened. At the same time, we have to ensure the sustainability of custom-

average handling time is also dropping, which shows that the team

er operations as they are today, until the end of the state of emer-

is focused, motivated, and has the proper framework to do the job at

gency or even longer. The team has adapted well and very quickly

high standards. Fast decisions as a result of the simplification of pro-

to the new way of working. The framework has changed for us all,

cesses and flows have enabled us to improve service levels far more

bringing new conditions related to both work and personal life. We

effectively than before, and we’ve received thank you notes from

have to learn to manage ourselves before we excel at helping others.

customers who, for instance, appreciated the activation of complex

We have to pay more attention than before to our own wellbeing,

services on the same day they requested them. This would not have

focus, and time management. At Vodafone, we strongly encourage

been possible without the remarkable effort, intensive work and

people to maintain a balance between work and life, to disconnect

dedication of all our teams, of which I am very proud! Even though

and have time for personal matters even during what used to be

we have a new decision-making process in place, encouraging quick

business hours, to stay in shape, be healthy, find time to be creative,

decisions, we see that empowering people is what brings the most

and stay connected to their communities. We host internal webinars

benefits today.

with professional coaches, we allocate time to talking about our colleagues’ concerns during video calls, and we have intensified

How has the usage of online payments and other digital tools evolved among Vodafone’s customers lately?

communication across our internal social platforms. Our wellbeing

Even before the crisis, we had been working to improve the Bill &

pectations of friendliness, clarity, and fast solutions, as we can stay

Payment services on our website, but also in the MyVodafone app

empathic in each and every interaction with our customers.

translates into our customers’ wellbeing and helps us meet their ex-

www.business-review.eu Business Review | May 2020

10 COVER STORY

Vodafone Romania Foundation makes strong commitment in fight against coronavirus The current crisis generated by the SARS-CoV-2 pandemic has proven that social responsibility and community involvement have the power to help us get through such a difficult period. Companies from all around the world, regardless of their size or line of business, have joined forces to either support medical staff in their efforts to treat people affected by COVID-19 or find solutions to quickly rid the world of this virus. By Anda Sebesi

odafone Romania is one of the most social involved

DreamLab app, the result of a partnership between the Vodafone

company during this time of crisis, as through the Voda-

Foundation and scientists at Imperial College London. The app uses

fone Romania Foundation, the company focused its social

the combined processing power of smartphones to compute com-

involvement during this period on three main segments: technology, healthcare, and education.

plex data much faster than it would be done traditionally. The DreamLab app was originally developed by Vodafone Foundation Australia as an easy way for anyone to support cancer

DREAMLAB APP TO HELP IN THE FIGHT AGAINST COVID-19

research while their phone is charging overnight. A new Corona-AI

Smartphone users are being encouraged to harness the collective

project has been launched on the app and will use the same technol-

processing power of their mobile phones to help speed up research

ogy to fight the coronavirus outbreak. Researchers believe that this

into treatments for the novel coronavirus (COVID-19) using the free

work could speed up access to effective drugs and enable tailored

www.business-review.eu Business Review | May 2020

COVER STORY 11

treatments against this infectious disease. “We urgently need new

Health Directorate) and ISJU (County Inspectorate for Emergen-

treatments to tackle Covid-19. There are drugs out there that might

cies) to test people coming into Romania via the Nadlac border.

work to treat it, but we need to do complex analyses using artificial

Additionally, the Foundation has bought medical equipment for the

intelligence to find out which molecule or combinations of mol-

Marie Curie Hospital, consisting in 100 individual inhalers for the

ecules might be able to disrupt the virus when it’s inside the body.

neonatology section, 50 air pumps, 5 air purifiers for larger spaces

All of this takes a huge amount of computing power and DreamLab

and 5 mini-inhalers. It also financed the acquisition of masks and

enables us to do this important work in a much shorter timeframe,”

protective equipment for the Victor Gomoiu Children’s Hospital in

says Dr Kirill Veselkov from the Department of Surgery and Cancer at

Bucharest and, through the Zi de Bine Association, for the Infec-

Imperial College London, who is leading the research.

tious Diseases Hospital in Brasov. Tablets and data allowances have

The project is split into two phases: identifying uses for exist-

also been financed for physicians from the Victor Gomoiu Children’s

ing drugs and food-based molecules with anti-viral properties and

Hospital to help them communicate with medical staff from the

optimising combinations of such drugs and molecules for improved

Matei Bals Institute for Infectious Diseases. Last but not least, for

efficiency against coronavirus infections.

the Matei Bals Institute, Vodafone Romania Foundation financed

While traditional experimental research and standard research

devices and contracts enabling patients in isolation to communicate

methods could take years to

with doctors while maintaining

develop, DreamLab’s cloud-

a safe distance. As for education, children

based mobile processing approach can drastically reduce

and teachers in Romania’s

the time it takes to analyse the

rural areas can continue their

huge amount of existing data.

educational activities online,

A desktop computer running

in an effective and interactive

24 hours a day would take

way, through the digital educa-

decades to process this much

tional platform offered by the

data, but a network of 100,000

Vodafone Romania Founda-

smartphones running over-

tion within the School in a Box

night could do the same job in

programme. The Foundation

just a couple of months.

has also partnered with CISCO, IBM, and World Vision to offer

The app is available now in Romania, as well as Australia,

free Webex licenses to teachers

Italy, New Zealand, Spain, and

for 180 days. With the help

the UK, with other countries

of this platform, teachers can

to follow in the coming weeks.

hold remote classes in real

DreamLab is free to download

time, through video confer-

from the App Store for iOS or

ences, with all their students. Within one month of school

Play Store for Android. In order for the app to work in Roma-

closures, teachers had devel-

nian, users must have this lan-

oped 1,800 online courses on the School in a Box platform,

guage set on their phones prior to downloading it. Once installed, the app will not eat into monthly

more than double compared to the previous 6 months of school.

data allowances. Vodafone Romania is supporting the DreamLab

During this period, student activity was very intense, with about

project by offering free national data for all Vodafone customers who

2,300 hours spent on the platform, almost as long as the regular

use the app. No personal data is downloaded to or collected on the

school period, which indicates that students’ interest in education

user’s device.

has increased considerably. The type of devices used at home during this period has also changed, with over 65 percent of users accessing

HEALTHCARE AND EDUCATION AT THE CORE OF EFFORTS AGAINST SARS-COV-2 During SARS-CoV-2 pandemic, The Vodafone Romania Foundation

the platform through their mobile phones, compared to 33 percent before the pandemic. Last but not least, the Vodafone Romania Foundation is also sup-

immediately got involved in supporting several initiatives, mainly in

porting the Cumparaturi la Usa Ta (Shopping at Your Door) initiative,

healthcare and online education, as well as digital platforms aiming

developed by the Geeks for Democracy association, through which

to correctly inform the population, using official sources.

volunteers can help elderly or quarantined people by bringing them

More specifically, the Vodafone Romania Foundation sponsored

food and medicine. The Foundation has contributed by providing a

the acquisition of a testing machine and 5,000 tests for the triage

call center, as well as phones and communication services enabling

center in Arad, to be used by Arad County Hospital, the DSP (Public

volunteers to take such calls.

www.business-review.eu Business Review | May 2020

12 COVER STORY

Keeping Romanians connected in times of crisis Since the beginning of the SARS-CoV-2 outbreak in Romania, once social distancing became the new normal for a limited period of time, communication infrastructure turned into the bond between people, both from a personal and a business perspective. Catalin Buliga, chief technical officer at Vodafone Romania, tells Business Review about the fact that the company’s mobile network in Romania was reconfirmed as the ‘Best in Test’ on the local market by independent auditing firm umlaut AG and details the company’s efforts to keep Romanians connected during this period.

By Anda Sebesi

n the times we are living, fixed

Through this new certification,

and mobile communications have

Vodafone Romania is reinforcing

become fundamental infrastruc-

its commitment to keep Romanians

tures as they have been at the core of

connected and ensure that mobile

everything we do. Vodafone Romania’s

communication services for its cus-

mission – now more than ever – is

tomers are at the highest quality in the

to ensure people stay connected by

country,” says Buliga.

providing them with all the commu-

The recognition of the quality of

nication services they need to work

Vodafone Romania’s mobile services

and learn, to communicate with their

was achieved after measurements on

family and friends, to have access to

all Romanian mobile networks con-

healthcare and emergency services.

ducted by independent auditor umlaut

“Many businesses are relying on our

AG (the former P3 communications

services to ensure continuity. For those

GmbH). This is the sixth consecutive

working remotely, it is critical that

certification for Vodafone Romania’s

mobile and broadband connectivity

mobile network following measure-

supports everything they need to do.

ment campaigns conducted by the

Vodafone is doing its best ensure reli-

independent auditor.

able and high quality mobile commu-

“The need to ensure reliable and

nication services for Romanians” says

high-quality mobile communication

Catalin Buliga, chief technical officer at

services for Romanians has never been

Vodafone Romania. Since the beginning of the pandemic crisis in Romania, Vodafone

more important. I’m very proud of our engineers’ efforts to maintain a leading position for our Mobile Network in Romania at a mo-

has recorded significant traffic increases that are perfectly aligned

ment when being a trustworthy and reliable partner for the society

with the current situation in the country: people are working from

is essential. We will continue to invest our energy and resources in

home, education has moved online, and people constantly need to

our network capabilities and we are sure that, together, we will get

constantly feel the need to check on each other’s health. Especially

through this situation,” he adds. The measurement campaign was

during such moments, the resilience of communications networks

conducted between February 10 and March 2, 2020, across Roma-

and their capacity to accommodate massively increased traffic with-

nia’s territory, on a route randomly chosen by umlaut AG. Measure-

out affecting service quality are extremely important. It is critical

ments based on drive tests covered a total distance of 8,194 km and

for mobile and broadband connectivity to support the steady rise in

24 percent of the Romanian population. Measurements carried out

remote working, online learning, and entertainment.

through crowdsourcing tests covered 95.2 percent of urban areas

“Vodafone Romania’s ongoing investment and innovation means

and 49.8 percent of non-urban populated areas, while the total

that our network is very well-positioned to deal with the increased

size of the tested area reached 113,568 km2. Following comparative

demand, which has also been reconfirmed by our latest network

measurements among all mobile networks in Romania, Vodafone

certification as the ‘Best in Test’ mobile network in Romania, with

Romania obtained the highest total score for the quality and perfor-

the highest total score for mobile network quality and performance.

mance of its mobile data and voice services.

www.business-review.eu Business Review | May 2020 2016

VENTURE COVER CAPITAL STORY 13 14

Venture Capital in Romania during the COVID-19 pandemic COVID-19 will change the manner in which Venture Capital funds (VCs) do business. VCs will not go back to “normal” within the next year and Romanian founders should adapt their plans accordingly. By Claudiu Vrinceanu stop at some point,” said Dan Lupu, partner at Early Bird Venture Capital, an investment fund that has two areas of interest. “The first focus point is our existing portfolio: the companies in which we have invested and whom we want to support by providing additional financing to limit the impact of the crisis. Our second direction is looking for new investment opportunities. Traditional targets for us are global software-based solutions for companies. Here I think quite a few things will change in terms of opportunities. Successful companies have been founded in every crisis and I see no reason why the current crisis should be different from this point of view,” Investment funds have to continue to invest their money

said Dan Lupu.

actions will not be a primary concern.

in revenues, products and services must

ment fund that has increased its investment

“All the funds are busy with portfolio

pivot. According to Georgescu, good com-

budget from EUR 2.7 million to EUR 4 mil-

matters at the moment and will be for as long

panies will continue to attract funding, and

lion, doubling the participation of more than

as the fundraising climate doesn’t rebound.

a good company is one that has managed to

half of the initial supporters of the project.

Remember that most VCs manage multiple

take several steps to adapt, including pivot-

Although the situation both the Romanian

funds and might have a number of complex

ing. “More than half of the companies in my

and the European business environments

situations to deal with in their portfolio. Sta-

portfolio have already pivoted,” he notes.

are going through is discouraging, technol-

or most VCs, carrying out new trans-

“NOW IS THE TIME TO ACT” During this period, with a general decline

A good sign comes from ROCA X, an invest-

tistically speaking, one company drives the

A survey done by 500 Startups among 139

majority of returns for a fund. Now imagine

investors to find out the impact of COVID-19

period. Many companies are relying on the

that company taking a dive. A new deal will

on the early-stage startup investment climate

idea that tech can become the main engine of

not be the priority,” says Levin Bunz, Venture

showed that up to 75 percent of respon-

Romanian economic development. “Contrary

Capitalist at Heartcore Capital.

dents anticipated investing less than they

to the trend, we believe that we shouldn’t

had planned throughout the one-to-two

be paralysed right now, that we should act

ated Romanian investors, has a similar opin-

year period in which the world will be hit by

instead, and our shareholders support us in

ion. “Investment funds have to continue to

COVID-19.

this belief. During this period when the busi-

Radu Georgescu, one of the most appreci-

invest their money. These opportunities have

“It is obvious that we will not return to

ogy can provide sustained growth in the next

ness environment needs recalibration and

not disappeared. The problem is that the

the previous market. The investment market

support, the ROCA X team has intensified its

funds are holding on to the money to inject

will be smaller. We are already seeing the

collaboration with startups and we remain

into portfolio companies who are having cash

first effects generated by the slowdown in

in constant contact to anticipate their needs

problems. New investments are still being

economic activity. Jobs will be lost, and that

and react with concrete and useful solutions

made, but in healthy companies, at lower

loss will lead to lower demand, which will

when they need them,” said Alexandru Bog-

valuations than before,” says Georgescu.

lead to bankruptcies. It is a spiral that will

dan, Senior Investment Manager at ROCA X.

www.business-review.eu Business Review | May 2020

14 FDI

The SWOT analysis for FDI in Romania as COVID-19 crisis deepens Foreign direct investment (FDI) to Romania at the start of 2020 was 70 percent below the same period of 2019. This slow start to the year will only grow worse as the health crisis deepens. In these uncertain times, let’s look at a SWOT analysis for the next period, a strategic overview of strengths, weaknesses, opportunities, and threats for the future of FDI in Romania. Tourism is one of the most affected sectors in Romania

By Claudiu Vrinceanu

STRENGTHS: WORKFORCE; CONSTRUCTIONS AND TECH SECTORS

WEAKNESSES: AUTOMOTIVE AND TOURISM

investment promotion agency (Invest Roma-

The automotive industry is one of the most

nia) and local authorities should proactively

The lack of workforce will no longer be a

affected sectors in Romania, and this means

work with foreign investors who have plans

barrier to attracting new foreign investors

that many investment opportunities related

for investments and speed up procedures

because of around 50,000 Romanian special-

to this sector are blocked.

instead of waiting for the pandemic to end

ists who have come back from the diaspora

When the big carmaking centres in Ro-

before doing so. Now is the right time for Ro-

and also in the context of a higher unemploy-

mania stopped operating due to COVID-19,

mania to further step up its efforts to attract

ment rate.

consequently at least 10 percent of the local

investment from specific areas like the US

economy was directly blocked, as economic

and Western Europe. Romania has the chance

lifted as the state of emergency ends, not all

dependence on this key sector is relatively

to attract investors who want to withdraw

employees will go back to work. It will take at

high. The tourism industry is in total lock-

from China and move their business to our

least 12 months to reach last year’s economic

down because of the travel ban. This new

country. It is a known fact that some govern-

level.

reality will translate to a freeze in interest for

ments have allocated billions of dollars in

new tourism projects. 2020 year should have

stimulus packages to helping manufacturers

stopped investing, things are moving

brought a series of new investments in new

move out of China and into other countries.

forward, and this may be an opportunity to

hotels (at least 40 units were in the pipeline

attract new investors to Romania.

for 2020 and 2021), restaurants, event cen-

THREATS

When restrictive measures will begin to be

Large construction investors have not

ters, leisure centers or spas, according to the

The EU has urged member states to remain

facilities granted earlier to the construction

Romanian Hospitality Industry Federation.

vigilant on foreign direct investment and the

sector will make it remain attractive for both

(FIHR). This development should have come

movement of capital from third countries

employees and investors.

after years of increased performance in tour-

during the current coronavirus crisis in an

ism, as a result of good tourism taxation.

effort to protect strategic industries.

Furthermore, maintaining the fiscal

Currently, as a result of the evolution of COVID-19, we are dealing with a forced digitalization, and not just for the business envi-

“The COVID-19 emergency is having pervasive effects on the EU economy. As part

neurs and investors say it is time to digitize

OPPORTUNITIES: INFRASTRUCTURE AND A MORE PROACTIVE INVESTMENT PROMOTION AGENCY

the public sector, especially in the area of

Stepping up public investment in infrastruc-

screening. Among the possible consequences

education, health, and administration.

ture to attract investments is a huge oppor-

of the current economic shock is an increased

tunity for Romania. The country also needs

potential risk to strategic industries, in par-

portunities for future foreign investors in the

to accelerate the settlement of private-public

ticular - but by no means limited to - health-

Romanian tech ecosystem.

projects for future investments. The public

care-related industries,” the EC said.

ronment, but for the whole society. Entrepre-

This new normality will create many op-

of the overall response, the EC also singled out the issue of foreign direct investment

www.business-review.eu Business Review | May 2020 2016

COVER INDUSTRIES STORY 15 14

Five industries that could win in Romania’s new normality Here are five industries that have been growing in Romania during the coronavirus crisis and have a lot of potential to continue their growth throughout the next economic cycle. By Claudiu Vrinceanu

GOV-TECH Economic recovery after this difficult period will be possible through a joint effort by the public and private sectors and one of the main measures that the government can take in this regard is the digitalization of the public sector. Government officials say that we will see an explosive growth in the IT field in response to the challenges posed by the coronavirus crisis, which can generate great opportunities in the gov-tech sector, i.e. IT companies creating software products and IT

All courier companies have continued their activity at the national level

platforms for the public administration.

CYBERSECURITY

tual appointment with their doctor, and may

in the field could generate revenues of EUR

As the number of online services will

eventually change the whole discussion about

1.3 billion.

increase, the demand for cybersecurity solu-

the cost of care,” said Ruxandra Tarlescu,

tions will spike up at the corporate level, ac-

Partner at PwC Romania.

cording to investment advisory firm Wavteq.

E-COMMERCE The e-commerce market in 2019 was estimat-

This trend will become a constant as organ-

COURIER SERVICES

ed at over EUR 4.3 billion, according to ARMO

isations across Romania will carry out much

All courier companies have continued their

(Association of Romanian Online Stores). In

more remote work.

activity at the national level without any

the case of online payment processors, all

restrictions or limitations, and the main

the products and services purchased online

TELEMEDICINE

players on the market have taken numer-

have led to serial increases in their revenues.

In the context of the COVID-19 pandemic,

ous preventive measures and implemented

For 2020, expectations are very high in

telemedicine is considered to be one of the

contactless delivery options. Most online

e-commerce, and the current public health

solutions that could limit the spread of the vi-

stores have encouraged card payments, while

crisis has further changed shopping behavior.

rus and also help the healthcare system man-

couriers have been trained to deliver without

In the coming years, most corporations and

age the growing demand for minor consulta-

contact. The entire delivery process has been

large brands in traditional retail are expected

tions. This explains the emergence of online

adapted to the new security requirements for

to accelerate investments in the online area,

platforms developed both by major providers

both couriers and customers. The postal and

encouraged by new consumer trends. At the

of private medical services as well as by state

courier sector, a market valued at about EUR 1

same time, many other online stores will open

hospitals. “The coronavirus situation has

billion in 2019, may grow by 20-30 percent in

among SMEs, including many that will target

rapidly changed the way patients react to vir-

2020, so that the more than 1,500 companies

the European or even global market.

www.business-review.eu Business Review | May 2020

16 DIGITAL

Digitalization at core of economic recovery in age of social distancing Romanian authorities ordered strict lockdown measures to prevent the spread of the coronavirus, and companies and employees are still reeling from the disruption caused by the medical crisis, which might have long term effects on the way we work, shop, and spend our free time. Investments in digital operations are helping companies stay afloat and might become the linchpin of the economic recovery over the next few years. By Ovidiu Posirca

Gabriel Voicila, PwC Romania

Doina Vilceanu, ContentSpeed

here is significant room for improve-

digitization increase companies’ productiv-

of companies in Denmark and the Nether-

ment in Romania’s digital perfor-

ity, innovation, resilience, and implicitly lead

lands are highly digitized, the same can be

mance, as the country was ranked

to revenue growth in any economic cycle,”

said for only 1 in 10 in Bulgaria and Romania.

27th out of all European Union countries

Gabriel Voicila, technology partner at PwC

in The Digital Economy and Society Index

Romania, told BR.

(DESI). Romania’s overall score has slightly improved in the past year in the index, which

“So, there is enormous digital potential in the Romanian private sector,” Alexandru Soare, sales director at Integrisoft, a Roma-

DIGITAL INVESTMENTS IN THE FACE OF DISRUPTION

nian integrator of software solutions, told BR.

tracks five dimensions ranging from broadband penetration to the integration of digital

Less than half of Romanian companies had a

vide an impetus for more companies to invest

technology by businesses and the tech skills

website in 2019, while just 10 percent of enter-

in technology. Entrepreneurs have to adapt

of employees.

prises were using cloud computing services

to a new economic reality in which social

in 2018, according to data from Eurostat, the

distancing becomes the new norm.

“COVID-19 is changing companies’ digital strategies, and not just in the short term.

EU’s statistics office.

Nonetheless, the current crisis might pro-

“For companies that had to suddenly

Developments that we’re currently seeing

Moreover, only 20 percent of small and

develop remote working policies, it was time

in different sectors will become permanent

medium-sized enterprises (SMEs) are highly

to ensure that people are both efficient and

changes, and they are most welcome. All our

digitized in Europe and the situation varies a

safe while working from home, with the right

reports have shown that automation and

lot across different countries: while 40 percent

tools, robust and secure technology, and

www.business-review.eu Business Review | May 2020 2016

COVERDIGITAL STORY 17 14

cybersecurity,” Voicila adds. The situation in

crisis and it is expecting a 20 percent increase

Moisa told BR. The current medical crisis has

the private sector has “already changed dra-

in its annual turnover, on top of the earlier

also highlighted European companies’ reli-

matically” and at this point you either have

forecast that said its turnover would grow

ance on suppliers in China. Some commenta-

an online store or you are looking to urgently

fivefold in 2020 versus 2019. The company

tors say that more firms could make invest-

build one, suggested Doina Vilceanu, CMO of

recently signed a global deal with UiPath, the

ments in manufacturing operations closer

ContentSpeed, the provider of an eCommerce

startup with Romanian roots that pioneered

to home to reduce the risk of supply chain

platform.

the robotic process automation (RPA) market,

disruptions.

“If any entrepreneur thinks that this too

in a bid to provide each person with a chat-

Vilceanu of ContentSpeed urges local

shall pass, and that consumer behaviour

bot. “We’re seeing increased demand from

players to invest more in their digital opera-

will just go back to the old patterns, they

retail, financial services, healthcare, and

tions in order to harness the potential of new

are making a huge mistake and wasting an

utilities. Practically, these are the industries

business.

enormous opportunity. The change is here to

that must work in any conditions, the pillars

“As the China supply chain has been pro-

stay. In 2019, merely 23 percent of Romanians

that support the Romanian economy today,”

foundly affected, many are looking for local

shopped online. We are currently witnessing a

Daniel Ionescu, marketing director at Druid,

or EU-based producers; how will they find

great influx of first-time buyers, placing their

told BR.

a factory if it doesn’t even have a company

first online orders,” Vilceanu told BR. The company supported the launch of 15-20 new

presentation website? How can you sell your products?” Vilceanu remarked.

websites weekly in the past month. She says

TURNING DIGITALIZATION INTO FINANCIAL GAINS

that a new online store can be up and running

Investments carried out by companies for

measures starting May 15, two months after

in about 2 weeks.

digital transformation can lead to improved

people were ordered to stay indoors as much

cost efficiency and higher revenues, through

as possible. More than 800 Romanians had

differs depending on companies’ existing

increases in volumes and transaction speeds,

been killed by the coronavirus so far, with

technological foundations. Those that were

but also through a better overall customer

more than 14,000 infected individuals.

already tech-savvy will accelerate invest-

experience. Tech insiders add that invest-

ments, while firms that have taken a more

ments in digitalization can also open up new

conservative approach will be using digital

business opportunities in areas that are heav-

tools for immediate needs. For instance,

ily affected by the coronavirus crisis such as

restaurants are intensively using digital chan-

tourism, education, and public services.

Meanwhile, the pace of digitalization

nels to stay in touch with their customers and handle meal deliveries. “This seems like a long-awaited step to-

“Given these circumstances, companies that were once afraid to take a big step towards digital are now experiencing its po-

Romania was set to ease its lockdown

SHARE OF ENTERPRISES IN ROMANIA USING CLOUD COMPUTING SERVICES 2014 2018 Romania

19% 26%

10%

wards transformation that should have been

tential: bigger exposure, reduced operational

taken a while ago, but kept being postponed

costs, and of course higher sales. The efforts

for future. Now, it’s on the table and being

we are now making to adapt our business will

tested in real life. We should say that this

surely pay off later,” Madalina Stanescu, the

crisis has also had a good part: it’s been a very

founder of Optimized, a marketing agency

good time to test digitalization,” says Cosmin

working with eCommerce companies, told

Nastasa, founder of performance marketing

BR. Mihaela Moisa, co-founder of startup

company Data Revolt Agency.

Future WorkForce, says that investments in

SHARE OF ENTERPRISES THAT HAD A WEBSITE IN 2019

digitalization can generate value in the long

Romania 47%

port departments, including banks, online re-

term through increased capacity to react

EU 78%

tailers, travel agencies, and utilities, chatbots

quickly to changes on the market, better

Source: Eurostat

(virtual assistants that use artificial intelli-

adherence to compliance rules or increased

gence) are being deployed in droves in order

employee effectiveness in order to sustain

to deal with an increasing influx of queries.

business continuity through automation.

In companies that need big customer sup-

People in a difficult financial situation can

“Today companies are forced to speed

postpone the payment of bank installments

up their digital transformation engines. In

for up to nine months, and lenders have had

the current context, technology has become

to deal with a significant increase in traffic.

more important than ever as companies have

Romanians who had booked holidays before

experienced a forced entry into the digital

the pandemic are getting in touch with travel

field. While in past years they were just mere-

agents to find alternative solutions.

ly opening their doors towards technologies

Romanian startup Druid says that demand for its chatbot solutions jumped during the

like RPA, now they will certainly consider them for their business continuity plans,”

Source: Eurostat

DIGITAL ECONOMY AND SOCIETY INDEX (DESI) 2019 RANKING Romania EU

rank

score

DESI 2019

36.5

52.5

DESI 2018

35.4

49.8

DESI 2017

32.0

46.9

Source: European Commission

score

www.business-review.eu Business Review | May 2020

18 ENTREPRENEURSHIP

Drops in startup valuations expected over coronavirus The startup industry is entering a new age, marked by lower valuations and a tighter funding environment as a result of the coronavirus crisis disrupting the global economy. Local startups might struggle to raise funding in the early stages given the dim economic outlook, market players suggest. By Ovidiu Posirca

Sergiu Gidei, CEE Attorneys/Boanta, Gidei si Asociatii

Bogdan Litescu, Plant an App

he global economy was slated to enter

it will be the time to see which startups

according to a report by PwC and CB Insights.

a recession in the second quarter of

are the most innovative and have the best

Part of the decline is likely attributable to the

2020, while estimates in Romania

products. I think the Romanian startups that

earlier phases of the pandemic. Moreover,

anticipate an economic contraction of up to

have already obtained funding and have an

the report shows that aggregate valuation is

5 to percent of GDP, with the unemployment

international footprint are more likely to

falling. Figures could go into further negative

rate set to more than double in the coming

emerge well from this crisis, because they

territory for the second quarter, when most

months. The government’s forecast of just

have money to invest in new and innovative

large economies ordered the closure of non-

a 1.9 percent GDP drop this year has been

products needed in this context,” Ionut Sas,

essential businesses.

disputed by many economists.

partner at professional services firm PwC

Raising funds might prove to be a daunt-

Romania, told BR.

Valuations are used to show what a startup is worth after it gets through a funding round. The current gold standard for

ing challenge for startups at the moment,

FUNDRAISING DOWN IN THE FIRST QUARTER

entrepreneurs is reaching unicorn status for

“wait-and-see” approach until lockdowns are removed and businesses start to reopen.

In the first quarter of 2020, funding for start-

USD 1 billion.

as numerous entrepreneurs have taken a

“Like in past outbreaks, some will win,

ups had already fallen by 10 percent in North

some will survive, and some will lose, and

America, Asia, and Europe, to USD 50 billion,

their startup, meaning a valuation north of “The general feedback that I hear from both entrepreneurs and investors is that

www.business-review.eu Business Review | May 2020 2016

ENTREPRENEURSHIP COVER STORY 14 19

valuations are negatively impacted. I’ve heard about cases where investors cancelled existing term sheets and started new ones at a lower valuation. And these stories are still on the good side. Many investors have reduced new investments and put existing negotiations on hold in order to save that capital for companies in their portfolio,” Bogdan Litescu, CEO of Plant an App, a startup building a platform for the development of software apps, told BR. Litescu says he is in talks with investors from the Bay Area, Central and Eastern Europe, and Japan, estimating that the scope of the crisis will be limited in Romania. “Even right now, with the COVID-19 situation, we see that the effects are much more

Ionut Sas, PwC Romania

limited in Romania than in other countries in Western Europe or the US. Personally, I tie this phenomenon to a lower appetite for risk, which is strong in the local culture,” he adds. In past recessions, the amount of funding

percent from 2008 to 2009. “So, if the past

perhaps this crisis will be the start of the

is prologue, it would not be surprising to see

GovTech industry,” says Litescu of Plant an

for startups shrunk and fewer entrepreneurs

commitments to VCs cut in half this year,”

App.

attracted investors, while valuations also fell.

Butler concludes.

As more people are working from home,

Sergiu Gidei, partner at law firm CEE Attorneys/Boanta, Gidei si Asociatii, suggested

startups providing platforms for remote work and video conferences stand to benefit.

that startup valuations have dropped by 30 to

INDUSTRIES WITH POST-CRISIS GROWTH POTENTIAL

50 percent due to the coronavirus crisis.

Gauging the potential of new companies that

healthtech, biotech, fintech, takeaway food,

might come out stronger from this health

entertainment, and gaming.

“Romania is following the global trend

Other industries with growth potential are in

of lower startup valuations in the current

crisis doubled by an economic downturn is

“As for the state of funding rounds in the

context. We have noticed a 30-40 percent

difficult, but finding growth in these condi-

coming months, opinions are mixed. VC will

decrease in valuation on the market, which directly results in

tions might provide

be cautious, but that doesn’t mean it

a valuable

won’t take advantage of a good

busi-

investment opportunity.

less funding for startups, especially in pre-seed/seed

Also, there are European

phases. This fact also

states such as Germany,

puts pressure on found-

Finland, Austria or

ers to ensure faster

France that have an-

access to new financing

nounced special rescue

rounds in order to ob-

plans for startups,” says

tain the cash required to

Sas of PwC Romania.

develop and scale up their

Some tech startups

business,” Gidei told BR.

might prove more resilient

In this recession, startups serving affected industries such as tourism and restaurants or firms whose business models are based on direct sales

as large companies still need

ness

new solutions for document

lesson for the future. “Some industries are becoming very hot.

automation and customer management software, among others, suggested Jonathan

might take a bigger hit, suggested Donald

The last three customers we signed have

Lehr, general partner at VC fund Work-

Butler, managing director of USD 500 million

use cases in the healthcare industry, which

Bench, quoted by the Wall Street Journal.

venture capital fund Thomvest Venture. He

traditionally had been adopting digital trans-

He added that many skilled individuals

wrote in a blog post that commitments by

formation at a slow rate. I believe education-

might be laid off from startups due to the

limited partners to venture funds signifi-

related technologies might also receive better

bad economy, but they will be recruited by

cantly fell in the previous two recessions

valuations as people will have to obtain new

global players of the likes of Google, Netflix

- by 41 percent from 2000 to 2001 and by 58

skills in order to find jobs. And, who knows,

or Twitter.

www.business-review.eu Business Review | May 2020

20 BUSINESS

Business opportunities during the pandemic Even in the worst crisis, there are seeds that can be sown for future growth. In fact, some entrepreneurs see opportunities where others see only destruction. Some are working hard right now to adapt their businesses to the new coronavirus world. By Sorin Melenciuc

Companies established during the last financial crisis were among the most successful during the recovery

SUPPLYING THE FRONTLINE

there was and still is enough room for private

medical devices and PPE in order to survive.

The first obvious opportunity is supplying

import-export firms to cover the demand.

the “frontline” in this unusual war against a

Other public and private organisations operat-

manufacturer based in Targu Mures, has

virus. Hospitals need ventilators, tests, drugs,

ing on the frontlines, such as the police,

developed a mechanical ventilator that has

and protective personal equipment (PPE) for

utilities or courier firms, also need some

already been successfully tested and ap-

their staff, and governments are ready to pay

protection gear for their employees, and this

proved by a military commission in charge

higher prices for those items than they would

is usually supplied by private companies.

with emergency reviews of such equipment.

Gaze Industriale Mures, an oxygen tank

“It is a Romanian product, it opens the way

in normal times. Decades of underinvestment in Romania’s health infrastructure now

NEXT STEP: MANUFACTURING

for these types of devices in Romania, and it

translates to higher emergency spending for

But there is another major trend that is now

allows local teams to do research, to innovate,

the country, and its needs are huge. Romania

developing in many countries that have an

and to develop these products,” said Razvan

does not have a well-established tradition of

industrial tradition, including Romania,

Corneliu Popa, the manager of the company.

producing protective equipment for medical

supported by governments: domestically

“We can produce the device at a cost below

staff or for other types of workers, and before

manufacturing these goods and limiting their

the market price. We all know that prices have

the coronavirus pandemic it almost entirely

reliance on foreign suppliers. In Romania, the

exploded because demand greatly exceeds

relied on foreign suppliers – mainly China and

government has created a scheme financed

supply, but we are well below the sale prices

other Asian countries.

through public funds to support the local

of imported devices,” he added.

production of masks, other PPE items, and

In Cisnadie, Sibiu County, the company

favour direct negotiation of such contracts by

ventilators. This new policy has been effec-

Coramed started manufacturing protective

public organisations – such as state-owned

tive. Companies all over Romania have been

face masks in March, and a furniture pro-

company Unifarm – with foreign suppliers,

trying to turn themselves into producers of

ducer based in Maramures County, Taparo,

Even if the government’s policies tend to

www.business-review.eu Business Review | May 2020 2016

COVER BUSINESS STORY 21 14

completely changed its business model and

case of ventilators, doctors and researchers

ated new markets in the country, as they have

bought equipment to make masks.

are gaining experience, mostly through trial

everywhere else. Forced to stay home, most

and error methods, but they are neverthe-

people are rediscovering their skills as bak-

RISK FACTORS

less improving their knowledge. Many drugs

ers and cooks and they need products they

However, these business moves could prove

have already been tried on COVID-19 patients

usually wouldn’t buy before the crisis. A new

riskier than previously thought. First, the lack

in many countries, from antimalarial drugs

lucrative market for flour, yeast or cooking

of experience is a major risk factor when the

(hydroxychloroquine) to anti-HIV treatments

ingredients has exploded since the beginning

business model changes: a face mask produc-

(remdesivir and lopinavir/ritonavir) and rheu-

of the outbreak, and this market may not

tion facility in Romania has already been

matoid polyarthritis drugs (tocilizumab).

disappear very soon as most recent research

closed because most of its employees were

Other treatments, like famotidine (a cheap

has suggested that the coronavirus would be

infected with the coronavirus. But the most

drug for acute heartburn), are being tested

important risk factor for such manufacturing

in clinical trials. But all these medicines also

projects is science. Following the first wave

have side effects and their use is controversial

CREATIVE DESTRUCTION IN CRISIS

of COVID-19 patients, when ventilators were

– they seem to have some “limited success”

Studies conducted in Romania and abroad

seen as the best chance of survival for criti-

on certain categories of patients, but they

suggest that companies created during the

cally ill patients, doctors have gained experi-

don’t really seem to prevent or cure COVID-19

last financial crisis were among the most

ence and have started to advise against the

at a large scale. But with all of Big Pharma

successful during the recovery. “These

use of ventilators for many patients because

now massively investing in developing vac-

companies were founded at a time when, in

the survival rate for those who get intubated

cines and finding existing or new cures for

general, trust had not yet been recovered.

is too low. Some studies suggest that, in many

this viral infection, there is a high probability

This is because there was an empty space left

hospitals, more than half of the intubated

that they will soon discover which existent

by companies that had gone bankrupt or in-

risk lies in investing time and money into a

drug works best and which new treatment has

solvent during the recession, and assets were

product that is no longer needed after some

the best chance of being approved by health

undervalued,” financial analyst Iancu Guda

time because fresh research finds better treat-

regulators. For those companies investing in

noted a couple of years ago. These companies

ments and methods – and, in such emergency

producing drugs that will soon be considered

tend to be more competitive as their business

situations, research on disease has some de-

irrelevant in treating COVID-19, the costs

model gets tested during tough times.

lay. The local pharmaceutical industry is also

could prove excessive.

with us for the next months or years.

patients die. Alternative devices such as oxygen masks or even CPAP machines and black boxes, normally used to treat patients with severe sleep apnea, are now being used in hospitals in Europe and the US to treat patients who would have been put on ventilators just a few weeks ago. From this point of view, the

being pushed to change its usual business. Lo-

However, these encouraging studies are counterbalanced by data showing that more

cal medicine producers like Zentiva Romania

NEW RETAIL MARKETS

than half of currently active Romanian firms

or Antibiotice Iasi have already changed their

At the same time, this pandemic has also gen-

have not experienced a severe shock on the

production structure in order to increase out-

erated new demand on the retail market for

market, as they were founded after the finan-

put or to start manufacturing certain drugs

protective masks, gloves, and disinfectants,

cial crisis. The lack of experience in navigat-

considered to have the highest potential in

and the country’s stocks rapidly vanished

ing troubled waters may prove fatal to many

treating COVID-19 – like paracetamol and

even before the beginning of the outbreak

local companies. But in the economy, seeds

hydroxychloroquine.

in Romania. Following a rapid depletion of

of new life lie in every bankruptcy – Joseph

stocks and a rapid rise in prices, many compa-

Schumpeter’s ”gale of creative destruction”

major risk: science. There is currently no

nies have seized the opportunity and secured

seems to function in each and every major

cure or vaccine for the SARS-CoV-2 virus, and

contracts with foreign suppliers.

crisis. According to experts, the coronavi-

But these decisions are facing the same

doctors all around the globe are struggling

Today, masks, gloves, and disinfectant can

rus crisis could accelerate current business

to treat their patients with existing drugs.

be bought online from retailers like eMAG or

trends, destroy old unsustainable models,

There is no study that proves that a particular

Altex at lower prices. But lockdown, social

and push for new, better suited business

drug can really cure COVID-19. But like in the

distancing measures, and isolation have cre-

concepts.

www.business-review.eu Business Review | May 2020

22 MACROECONOMY

The long way back from the coronavirus slump Experts from all over the world are wondering how the global economy could recover from the current downturn, with most countries’ gross domestic product (GDP) risking catastrophic declines of 30 percent or even more in the second quarter of 2020. But uncertainties are still too high to bet on a rapid recovery – or what’s known as a V-shaped recovery – so we might end up going through a long, U-shaped depression or a W-shaped one, with multiple downturns. By Sorin Melenciuc As a result, unemployment rates exploded all over the world. Business shutdowns have led to a record 26.5 million people in the United States filing for unemployment benefits in five weeks since mid-March, and officials forecast that the joblessness rate could hit 16 percent in April. In Romania, more than a million employees filed for a state-run scheme of temporary unemployment benefits offered during the state of emergency, declared on March 16 – and supposed to last until at least May 15. In fact, like Romania, most countries in Europe – with the exception of Sweden, which chose a “herd immunity” policy – have imposed major restrictions on people’s movements or even national lockdowns for around two months, leading to a long economic and social holiday with very unclear consequences. This situation has created a two-sided economic crisis: a crash in demand associated With many economic sectors in a deep coma, most experts see a gradual recovery in the second half of this year

“

with a drop in supply.

SCALE OF THE CRASH

Éramos felices y no lo sabíamos” (We

the coronavirus crisis. Most countries were

In May, countries across the world will be

were happy and we didn’t know it),

posting strong growth, middle classes were

gradually easing restrictions and putting an

Spanish newspaper El País wrote on

expanding all over the world, tourism was

end to national lockdowns, but no one really

March 19, at the beginning of the national

booming due to higher incomes, and people

knows how much of the economic activity

lockdown in one of the countries that were

were generally optimistic about their futures.

will have survived the long holiday – and how

most severely hit by the pandemic.

But all of these vanished in the blink of an

many people will still have jobs. Many busi-

eye. With billions of people around the world

nesses will certainly remain closed for much

VANISHING WAY OF LIFE – AND JOBS

forced to stay at home, airlines, tourism

longer or simply vanish – in tourism, HORECA

From an economic perspective, the newspa-

and HORECA businesses have closed down,

or entertainment areas such as music festi-

per’s headline was a perfect fit as the world

demand for most non-essential goods plum-

vals. But many others will certainly be hit by

had been experiencing one of the most

meted, while thousands of factories across

lower demand due to higher unemployment

flourishing periods in human history before

the globe took a long break.

– a vicious cycle whose true scale is difficult

www.business-review.eu Business Review | May 2020 2016

MACROECONOMY COVER STORY 23 14

to figure out at this moment. According to

the virus will disappear this year or, more

other things, if for example an economy were

Economy minister Virgil Popescu, economic

realistically, next year. But the pandemic

to contract by 30 percent, recovering from

activity in Romania had dropped by 30-40

will certainly have social and psychologic

that by, say, a 4 percent growth rate would

percent by mid-April compared to the pre-

consequences – favoring distrust, isolation,

not be a triumph but a confirmation that we

pandemic period, and this number suggests a

and remote work. And the virus will certainly

would be beginning to climb out of depres-

very hard economic landing.

have dire economic consequences.

sion,” Friedman indicates.

In fact, many government officials in

According to geopolitical expert George

However, the analyst thinks that the world

Romania and all over the globe are now

Friedman from Geopolitical Futures, the

has not reached yet the depression point.

trying to figure out how to cope with such a

single most important question for human-

“I don’t think the numbers show it yet, and

calamity and, even more importantly, how to

ity is whether what we are experiencing is a

the despair of depression is not here yet

restart the economy in a plagued world – and

depression or a recession. “A recession is an

either. But some parts of the world may have

with public budgets running out of money at

essential part of the business cycle. Among

reached that point, and depression spreads its

a very high pace. In the first quarter of this

other things, it culls the weaker businesses

claws. The urgency on vaccines and openings

year, Romania’s general consolidated budget,

and redistributes capital and labour for better

I think reflects a sense of fear of reaching the

which includes the government’s fiscal and

uses. It is painful but necessary and it ends as

breaking point,” he argues.

social, recorded a deficit of RON 18.1 billion,

it began, as a function of a healthy economy,”

or 1.67 percent of the estimated GDP, up 3.3

Friedman wrote in a recent analysis.

times year-on-year.

“Depressions are not economic events;

DEBT: SHORT-TIME CURE WITH SERIOUS SIDE EFFECTS In order to avoid such a scenario, politicians have little “therapeutic” options for the economy – and the main available tool is rising public debt. It is a tool that works when there’s still money on the table, because when money becomes scarce, the last option is to print more of it. Romania’s situation is made worse by its poor fiscal performance history and by its low credit rating – the lowest classification in the “investment grade” category at all the three major rating agencies. In April, Fitch and Moody’s both cut their rating perspective – from stable to negative. For Romania, losing

they are the result of exogenous forces such

its investment grade rating would translate

that the government has very little room for

as wars or disease. Depressions are not a nec-

into losing access to many sources of money

maneuver and needs money from the mar-

essary culling but a byproduct of the savage

and paying higher interest rates. And such a

kets or other sources to finance its substantial

destruction of these external forces, which

scenario will further push the burden of the

spending. The situation is complicated by the

not only disrupt but destroy vast parts of hu-

debt, which is set to increase rapidly even in a

fact that Romania last year registered a bud-

manity and decency, along with the econo-

moderate scenario. As a result of the deterio-

get deficit of 4.6 percent of GDP, significantly

my,” he explained. The expert warns that the

ration of the fiscal balance and the economic

exceeding the European Union’s recommend-

world would much more easily recover from

recession, Moody’s expects Romania’s debt-

ed ceiling of 3 percent of GDP.

a recession. “We will recover from a depres-

to-GDP ratio to increase to 43.7 percent by

sion as well, but it will take much longer and

the end of this year, from 35.2 percent of GDP

involve far more pain,” Friedman writes.

in 2019. “Looking ahead, Moody’s forecasts

Unlike recessions, depressions are

Romania’s deficit to narrow gradually to 6.2

coma, most experts see a gradual recovery

economic events that are not created by

percent of GDP in 2021 (from 7.7 percent of

in the second half of this year and a stronger

economic forces. “Therefore, measuring the

GDP in 2020) and 4.4 percent of GDP in 2022.

recovery starting from 2021, but there are

depth of a depression through economic mea-

Under this scenario, public debt would reach

many uncertainties on the horizon. First, no

sures alone is insufficient. The measure of a

46.8 percent of GDP in 2021 and 47.8 percent

one knows how the pandemic will evolve

depression is the extent to which it destroys

of GDP in 2022,” the rating agency wrote in its

and how long it will last. In the worst case

the hopes and dreams of a generation, making

latest country report. This means that Roma-

scenario, mankind will endure the pandemic

what had been in easy reach inconceivably far

nia’s public debt will soar by 12.6 percent of

for years before researchers eventually find

away, and taking successful people and reduc-

GDP in three years – a very expensive corona-

a vaccine or a cure. In the best case scenario,

ing them to penury,” the expert says. “Among

virus bill for the Eastern European country.

This worrying state of the budget means

RECESSION OR DEPRESSION? With many economic sectors in a deep

www.business-review.eu Business Review | May 2020

24 MEDIA

Digital gets boost during COVID-19 pandemic

Digital media has enjoyed two-digit growth in the past years, reaching over 20 percent market share in 2019, based on Media Fact Book, Initiative’s yearly report. For 2020, the agency predicts a continued increase in share, but on a declining market.

By Romanita Oprea

Catalin Florea, Initiative

Claudia Chirilescu, Spoon

ow is media spending being impact-

take advantage now. “Initially, the answer

straightforward manner,” said Catalin Florea,

ed in Romania and what kinds of

was quick, but not very determined, as the

head of product at Initiative.

trends are we seeing? “Our industry,

situation was developing very quickly. The

According to Dana Bulat, general man-

through each media agency, is working hard

market was volatile during most of March,

ager and owner of United Media Services,

to prepare reports and analyses for each client

and then it slowly began to settle, as data

media-wise, agencies and clients are always

and each category of products in order to

built up to support new strategies. Some busi-

looking for efficiency. “We have to reach them

advise clients on a suitable media approach.

nesses had to reduce exposure, especially if

in a meaningful way as well. The context in

Some industries are of course significantly

they were hit hard by the lockdown. Others

which we place our campaigns, the content

affected, but if a client decides that this is a

stayed on air but shifted focus towards public

we are using, the tone of voice of the message

good period to communicate with their cus-

service messages or relevant offers. Some

are even more important than they were in

tomers and take advantage of the fact that the

even increased their exposure to take advan-

the past. We are surrounded by an ocean of

competition is silent to gain a bigger voice,

tage of the increased demand, for instance in

negative and alarming, fake, and sensational

it’s a good strategy,” says Claudia Chirilescu,

e-commerce and pharma. From the outside,

news that in fact is no news at all, so it is very

owner Spoon Media.

much of this effort to adjust remains behind

important how we select the media and the

the scenes – the result was continuity rather

content we are placing in ads without losing

for campaigns that run during this period,

than improved communication. From a cre-

our primary objectives of coverage, engage-

agencies are more flexible with their services

ative point of view, reactions have been very

ment, and fair cost,” said Dana Bulat.

and fees, so clients with available budgets can

cautious, mostly echoing official advice in a

Media suppliers are offering discounts

Meanwhile, Alexandra Iordachescu, brand

www.business-review.eu Business Review | May 2020 2016

COVER MEDIA STORY 25 14

lead at Starcom, has a positive attitude and

people usually listened to radio while they

reception has also turned digital due to a shift

believes in the power of adapting to new

were in their cars, but it is also true that cer-

from in-car listening to online streaming and

situations and sees challenges as a great

tain radio hosts have quite a strong bond with

social engagement. However, some digital

manner of proving oneself. “From setting up

their listeners, who continue to listen at home

touchpoints which are perfectly adapted to

work from home protocols in record time to

as well. Additionally, young and active people

the lockdown are also difficult to address for

adapting communication plans to the current

were already listening to either live shows or

advertisers – think of Netflix and WhatsApp,”

context, people have proven agile and effi-

podcasts online, and this had been happening

added the Initiative representative.

cient in coping with these changes. From our

for a while already,” said Dana Bulat. More-

perspective, as a media agency, we have seen

over, “we’ve seen a progressive shift of bud-

since summer is coming and people will

more opportunities to act as communication

gets from traditional (offline) media towards

start going out more, outdoor will be in

consultants for our clients. We have provided

complementary digital channels. YouTube or

high demand again, but maybe with some

dedicated data analysis and research that

other digital video platforms are very efficient

additional discounts. “In my opinion, on a

proves the importance of not going dark

in reaching light TV viewers, while podcasts

medium-long term, TV content will move to

during difficult times. Real time action has

or audio streaming are the perfect exten-

streaming video content. TV is now gain-

always been the backbone of a media agency

sions for radio. The process is natural and in

ing viewers through news, sporting events

– daily monitoring, scanning projects, acting

line with the media consumption behavior,”

broadcasting, live or recorded entertainment

immediately for the benefit of our clients - so

added her colleague, Dragos Andronache,

shows, and old movies. If you think about

we are used to taking short-term actions with

head of digital at United Media Services.

it, many of those will move to streaming.

medium and long-term benefits in mind,” she

According to Catalin Florea, advertising fol-

Now sports events organizers are negotiat-

stated.

lows media consumption. Currently, people

ing with streaming services, news is already

In turn, Claudia Chirilescu believes that

are more present both online and on TV.

online, and so are movies. All the platforms

SHIFTING BUDGETS

“Advertiser presence is lower, mostly due to

that offer video on demand have grown a lot

In this changing environment, it’s only natu-

the hard hit industries, as I mentioned before.

worldwide and TV is in danger. Digital media

ral for budgets to shift from one type of media

For businesses that have not been disrupted

will flourish and will become more and more

to another, and even for some to be cancelled.

by the lockdown, this is an opportunity – get-

sophisticated, segmented, and specialized,”

Therefore, will we see budgets moving from

ting access to more people in a less crowded

Chirilescu said.

outdoor, radio and maybe even TV, towards

environment. And to seize this opportunity,

digital advertising? “Yes, we are seeing this

both TV and digital touchpoints can do a good

did not just depend on commuting consump-

trend, but we think it is for a short while,

job. Digital comes with an important tactical

tion. Here we’ve seen maybe the most rapid

especially because people have been on

advantage – lower requirements in terms of

adaptation to the context, with dedicated

lockdown in their homes and OOH campaigns

production value,” Florea notes. At the same

programs and shows that come with a clean

were mainly addressing people on the streets,

time, as he points out, some brands may pre-

and positive editorial content, with useful

both drivers and pedestrians. As for radio, I

fer to go digital in order to be agile, at a time

information that is highly trusted by the lis-

think it was a collateral victim. It is true that

when TV production is very difficult. “Radio

tener,” also added Alexandra Iordachescu.

“Radio is still a highly used medium, as it

www.business-review.eu Business Review | May 2020

26 PR

In crisis, communication should be stronger than ever Working from home. Closed or transformed businesses. The entire business environment is learning to better adapt to the pandemic with each passing day. Still, entrepreneurs must learn from the past and understand that only creativity and thinking differently and strategically will help them rise above the fray. By Romanita Oprea

Sorin Dutoiu, Yolo Media

Elena Bululete, Conan PR

hat should an entrepreneur do in

tion. What consumers, business partners, and

lost and confused, with oscillating emotional

terms of communication during

even employees need in times like these is a

states, so the job of a leader is to reassure

this crisis? First of all, according

reinforced feeling of togetherness. And this

them and remind them that everything will

to Alina Galeriu, managing partner at Galeriu

is something you can only do by communi-

be fine again at some point. There is a lot

& Partners Public Relations, entrepreneurs

cating even more than you would in normal

of pressure on leaders and entrepreneurs,

shouldn’t give up. Then, of course, they

times,” said Alina Galeriu.

because they have their own fears about their

should think of ways to survive, but also to be

Furthermore, according to Ioana Mano-

businesses. “People need leaders more than

helpful to their partners and the community.

iu, managing partner at GMP, permanent

ever. Employees need to feel that their leader

“They have to reinvent themselves. Think of

communication must be maintained with

is present and in control, customers want to

new ways to be of service. Show empathy.

employees and clients, and this needs to be

be sure they will get their products/services,

There is no worse time than a crisis to stop

done with confidence and optimism. During

and suppliers want to know they will get paid.

communicating. In times of distress there is

this period, we need leaders to show they

An absent leader only conveys additional

vital need for transparency and reconnec-

know what they’re doing. People are already

panic among all stakeholders, which overlaps

www.business-review.eu Business Review | May 2020 2016

with the existing panic. They must be present

COVER STORY PR 27 14

Moreover, Sorin Dutoiu, managing partner

mend them to others. Think of this as being a

and show they have a plan and a mission.

at Yolo Media, an agency that has offered pro

clean system restart. The brands that matter

That they have things under control, and they

bono help to several companies during the

in the public’s heart will become stronger.

know what they must do. It’s a time when

pandemic, believes entrepreneurs should

The others could easily be forgotten,” the

mature and adaptable leaders will have a lot

communicate with their audience even more

Yolo Media representative noted.

to gain,” explained Ioana Manoiu.

than before, even if their business has been

Elena Bululete, managing partner at

hit by the crisis. “During these times, and

LESSONS FROM THE PAST

Conan PR, agrees that an entrepreneur should

especially after the restrictions are lifted,

As an economic crisis is already around the

continue communicating, especially during

brands must invest in proper communication

corner, more and more business people are

this crisis. “The most important rule in any

and public relations (PR) because this will

looking back at how the 2008-2010 crisis

crisis is that you don’t hide and don’t deny

make the difference on the market. Those

impacted the Romanian market and are won-

that there is a crisis. Do not be afraid to over-

who do it properly have the chance to keep

dering whether it will be different this time

communicate – do it often but provide value

their existing customers close and gain new

around, and whether we learned anything from that experience. And as Sorin Dutoiu points out, the marcomm industry is almost completely different nowadays from what it was 12 years ago. With social media and smartphones, the online world has become the leading environment for communication. And we have a new generation of customers, with new habits and expectations. Back in the previous crisis, Ioana Manoiu learned then hat you have to make decisions quickly and adjust your costs to your revenues because later, it will be harder and more traumatic to do. You mustn’t get attached to one form of business or another; you have to be permanently open to change the model, structure and services. “Here is the trap that many entrepreneurs fall into: they are in love with what they’ve built and don’t have the power to change the recipe when it’s no longer relevant. They hope that this is only temporary and they will be able return to what worked before. But in most cases, you can never go back. A new world is being built, and it needs relevant products or services,” Manoiu explained.

to this communication process. Focus on

ones. This is not only the time to adjust the

employees. Focus on the community you are

business to the new situation, but to increase

a part of,” she argued. According to the Conan

brand awareness and therefore adjust com-

was how to behave more cautiously, creating

PR representative, first of all, one should keep

munication to present times. We are all in this

a safety net for when the next crisis hits. I’m

in touch with all stakeholders (employees,

together,” he explained. As the pandemic af-

not sure we will learn it after this one passes,

clients, partners, etc.), and keep them in the

fects us in every aspect, we need to be united,

either. We seem to quite easily forget how

loop - be transparent and provide informa-

to send empathy and support. “Brands must

hard it can get after it’s over. Maybe this is

tion on how the crisis is affecting everyone

be more human than ever in terms of commu-

something we should work on in the future,”

involved. “Secondly, we don’t know where

nication. An entrepreneur must understand

said Alina Galeriu. At the same time, the fact

things are going to stand after this crisis.

that, even though sales will be lower in this

that this is a health crisis does make it more

What we know for sure is that there will be

period, the company must remain close to its

stressful because it threatens each of us

change. And that is a process that involves ev-

audience using strong, useful, and emo-

directly and it has a wider veil of uncertainty

eryone. So use this time wisely, acknowledge

tional social media content as well as good

around it. It makes us all more vulnerable.

the situation, and empathize with people,

PR actions. Customers will remember that

“But at the same time, we’re even more will-

understand their perspectives. At the end of

the brand was on their side and will be more

ing to do whatever it takes to overcome it,”

the day, we’re all human,” Bululete added.

likely to return to its products and recom-

concluded Galeriu.

“What we failed to learn from that time

www.business-review.eu Business Review | May 2020

28 RETAILERS & COURIERS

Industries gaining from crisis: couriers, supermarkets, online retailers

Online shopping remains one of the few industries that are growing during the pandemic crisis. Across the European Union, 60 percent of people aged 16 to 74 shopped online in the last 12 months, compared to 56 percent in the 2018 survey. By Aurel Constantin

omania has one of the lowest shares of online shoppers, with only 23 percent of the active population. In

Europe, only Bulgaria has a lower share, at 22 percent, while the highest shares can be found in Demark (84 percent), Sweden (82 percent), and the Netherlands (81 percent). The situation is about to change as the pandemic has been forcing people to stay indoors and many non-essential shops have been closed. This means that many things, including restaurant food, have only been available through online orders. But problems haven’t just come up on the customer side. Eurostat statistics show that only 12 percent of Romanian companies with at least 10 employees had online sales that accounted for more than 1 percent of

Supermarkets are among the winners of the SARS-CoV-2 crisis

their revenues. The European average share of companies that carry out online sales is 17 percent.

pharmacies, online retailers, courier com-

number of food deliveries. Companies like

panies, and online entertainment providers.

Glovo, Uber Eats, FoodPanda or Takeaway

Romania. In 2019, the value of online shop-

According to the Association of Large Retail

have all seen a surge in orders in March and

ping reached EUR 4.3 billion in Romania,

Networks in Romania (AMRCR), supermar-

around Easter. Overall, orders of cooked food

according to the Romanian Association of On-

ket and hypermarket sales have increased

in April were lower than in March since many

line Stores (ARMO), 20 percent higher than in

by 30 percent since the start of the state of

people decided do more cooking at home. Ac-

2018, but this increase was lower than the one

emergency. Online, orders of food products

cording to a study carried out by Restograf, 67

recorded between 2017 and 2018, of 30 per-

recorded a tenfold increase compared to the

percent of Bucharest residents cooked more

cent. The sector is now expected now to grow

daily average before the crisis. The highest

compared to the days before the lockdown.

at a more rapid pace, as the coronavirus crisis

online surges were for products like water,

changes the way we shop. But while online

sugar, corn, flour, cooking oil, and yeast, ac-

people pay when they are shopping or getting

shopping grows as a whole, not all products

cording to eMAG.

things delivered. In Bucharest, online card

Online shopping is steadily increasing in

will see the same increase in sales. Non-

Sameday, eMAG’s courier service, recorded

A change has also been seen in the way

payments reached 75 percent of the total, a

essential goods like clothes and shoes are not

a 10 percent increase in delivering volumes,

huge increase compared to the end of 2019

on shoppers’ lists these days. Auto products -

with the number of daily orders reaching

when card payments were only at 20 percent.

cars and related items - are not selling either,

100,000, coming close to Black Friday figures.

Furthermore, the number of people who said

with many vehicles sitting idle in parking

Couriers are favoured by the lockdown

they often made cash payments went down

lots. Goods that are seeing higher sales at the

through the fact that they are spending less

from 45 to 21 percent, according to a survey

moment are supermarket food, personal care

time in traffic, so the time it takes to complete

by Nocash Capital Consult. ”As expected, CO-

and hygiene, and health products.

a delivery decreases and more orders can be

VID-19 has been the most efficient campaign

delivered in a day. Also, because people are at

to promote non-cash payments and online

FEWER CASH PAYMENTS

home, the number of unsuccessful deliveries

banking,” said Sergiu Cone, CEO at Nocash

The “winners” of the crisis are supermarkets,

has declined. Increases can also be seen in the

Capital Consult.

www.business-review.eu Business Review | May 2020 2016

COVER TECHNOLOGY STORY 29 14

Technologies for healthy buildings: How to keep employees safe as they return to work Most of the white-collar workers that used to populate office buildings are working from home amid the restrictions imposed by the state of emergency. The COVID-19 pandemic will eventually pass, but life will not be the same as new technologies will be implemented in order to keep people safe. By Aurel Constantin during a pandemic. It is important to have a system that can supply as much outside air as possible to indoor environments to reduce air recirculation and dilute indoor contaminants. Also, pressurization is particularly critical in hospitals aiming to improve the speed of air replacement and ensure less air is recycled. In negative pressure rooms, outflow valves push used air into a HEPA filter so it cannot flow outward to new, uncontaminated areas. For indoor air systems, filtration is very important. Effective filtration is essential for air quality – from pollutants to microbes, it can help remove particles to clean recirculated and fresh outdoor air. New technologies A healthy building goes beyond energy efficiency to ensure the health, confidence, and productivity of the people who use it

can automatically adjust these parameters and, with the help of sensors, maintain healthy air inside buildings.

here are over 300,000 employees

control technology can prevent unauthorised

working in Class A office buildings in

or at-risk people from entering a building

humidity significantly reduce the transmis-

High temperatures and high relative

Bucharest alone. Across the country,

or specific areas of the building, to curb the

sion of many viruses. Increasing temperature

the number stands at around 1 million, and

spread of illnesses when required without

and maintaining 40-60 percent humidity

doubles if we also take into account non-A

the need for manual inspection. Surveillance

in high-traffic areas may slow the spread of

Class buildings. All these buildings will need

video analytics can also help ensure proper

contagious illnesses, according to the Center

to be transformed in order to keep employees

health protocols are followed. Security alerts

for Disease Control and Prevention (CDC). Al-

safe and healthy after the emergency restric-

can notify facility managers about crowds.

though studies are in early stages, some have

tions are lifted.

Video forensics can identify where in a build-

found that several viruses are more stable

ing an infected occupant spent time in order

in cold climates and that droplets remain

tance when it comes to healthy buildings.

to conduct contact tracing. All of this can be

airborne for longer in dry air. For germs, there

Security cameras and connected sensors

done with limited human labour, giving staff

are antimicrobial plastics and UV surface

located throughout a building can provide in-

enough time to focus on other critical tasks.

disinfection solutions.

Security systems are of the utmost impor-

sight into how spaces have historically been

“A healthy building goes beyond energy

This technology is typically used for

used to predict where and when occupants

efficiency to ensure the health, confidence,

security purposes, but can be useful during

come into contact with each other or congre-

and productivity of the people who use it,”

a pandemic to limit the movement of at-risk

gate. These foot traffic patterns can inform

says Himanshu Khurana, Chief Technology

individuals. It can also guide people to free

settings for a variety of devices – like ventila-

Officer at Honeywell Building Solutions.

spaces in order to keep them from crowding. Together with a bigger space between offices

tion and temperature controls – to address both health needs, such as social distancing,

AIR FILTRATION AND TEMPERATURE

or plastic walls between people, these tech-

and energy use.

According to recommendations in the Occu-

nologies can keep employees safe from the

pational Safety and Health Act (OSHA), venti-

coronavirus, at least until a vaccine is found

lation is key to a healthy building, especially

for SaRS-COV-2.

But security systems as wellness tools don’t have to stay inside buildings. Access

www.business-review.eu Business Review | May 2020

30 LOCAL ECONOMY

Taking a look at the post-pandemic economy The lockdown caused by the COVID-19 pandemic sent the global economy into crisis. In the second quarter of the year, most of the world’s economies will lose between 10 and 25 percent of GDP, including Romania’s. The recovery should start in the second half of 2020, but it will take many years to get back to pre-crisis levels. By Aurel Constantin

Only a third of consumers are willing to spend the same amounts they did before the crisis or more

he first edition of the EY Future

ers in the “Hibernate and spend” segment

to two new segments: “Remain frugal” and

Consumer Index, a survey tracking

(11.4 percent) are spending more across the

“Cautiously extravagant.” The post-COVID-19

consumer sentiment across the US,

board. As we can see, only a third of consum-

consumer segments, detailed in the Index,

Canada, UK, France, and Germany, revealed

ers are willing to spend the same amounts

are summarised as: “Keep cutting” (13.1

how the lockdown-related changes in people’s

they did before the crisis or more. This means

percent), “Stay frugal” (21.7 percent), “Get to

behaviour are influencing the economy. Four

that two thirds will spend less, and that

normal” (31.4 percent), “Cautiously extrava-

major behaviour trends emerged during the

translates into declining sales for many seg-

gant” (24.7 percent), and “Back with a bang”

COVID-19 pandemic: “Cut deep,” “Stay calm,

ments of the economy. “42 percent of those

(9.1 percent).

carry on,” “Save and stockpile,” and “Hiber-

interviewed expect their shopping behaviour

nate and spend.”

to permanently change, a third are willing to

54 percent of consumers would make their

pay more for local products, a quarter would

personal data more available if it helped to

segment (27.3 percent) are spending less

do so trusted brands and a quarter for ethical

monitor and track an infection cluster. It also

across all expense categories as the pandemic

products,” says Cristian Carstoiu, Business

revealed that health care providers are regard-

impacts employment; those representing the

Advisory Services Partner at EY Romania.

ed as the most authoritative organisations,

Consumers that fall into the “Cut deep”

“Stay calm, carry on” category are continuing

The four segments identified by EY could

The EY Future Consumer Index found that

with 47 percent of consumers indicating that

to spend as normal (26.2 percent). Most con-

morph into five very different ones as the cri-

they trust them completely, compared to gov-

sumers (35.1 percent) represent the “Save and

sis abates. For example, the Index currently

ernments (28 percent), brands (17 percent),

stockpile” segment, indicating that they feel

suggests that over time, most consumers in

and media companies (16 percent).

pessimistic about the future, while consum-

the “Save and stockpile” segment will migrate

Consumers could view time, talent, and

www.business-review.eu Business Review | May 2020 2016

LOCAL COVER ECONOMY STORY 31 14

natural resources as equally precious, with

ing when it comes to the way they invest

production. Despite a manageable public debt

traditional notions of status receding and

or understand the relationship between

ratio of around 35 percent of GDP, the present

being replaced by purpose and social good.

consumption and production. “Before the

caretaker government has limited fiscal space

This is supported by the Index, in which 33

crisis, we were used to consuming a lot of

to mitigate the impact of the crisis, after years

percent of consumers strongly agreed that

import goods,” said Vasilescu during a Digi24

of strongly pro-cyclical budgets.

they would re-evaluate the things they value

TV appearance. He noted that we will get

most as a result of the pandemic, while more

to a point where the economy will function

than a quarter said they were already paying

normally with people looking to buy local

more attention to what they consume and the

products instead of imports. Asked how this

impact they have.

crisis was different from the one in 2008 or others in the past, Vasilescu said: “Three cri-

CONFIDENCE IN ECONOMY DROPS

ses are overlapping. It is first and foremost a

The EY survey results can also be applied to

health crisis, secondly it is a social crisis, and

our country, and linked to people’s confi-

thirdly, it is an economic crisis. When three

dence in Romania’s economy. This confi-

crises overlap, we need to think very carefully

dence has collapsed more than it did during

about how we get out of this situation.”

the 2008 financial crisis, according to data released by the European Commission.

ECONOMIC CONTRACTION

Adrian Vasilescu, adviser to the BNR gover-

After a long period of economic expansion,

nor, explained that three crises are currently

with real GDP growth of 4.2 percent in 2019,

overlapping - health, economic, and social.

Romania is expected to experience a contrac-

The population’s and companies’ confi-

tion in 2020, according to European Commis-

The expected economic contraction in

dence in the economy collapsed in April, amid

sion data. Short-term macroeconomic risks

2020 will lead to a fiscal deficit of 6.7 percent

the coronavirus pandemic crisis, recoriding

are partially mitigated by the concerted ac-

of GDP in 2020 under government estimates

the largest decline since 1992. Economic per-

tions of the national government, the central

(the European Commission’s baseline 2020

ception and employment prospects indicators

bank and the EU, while the economy is set

fiscal expectations are more pessimistic at

recorded some of the steepest declines in the

to face adjustment costs to its manufactur-

-8.5 percent of GDP), including the effects

European Union in April, according to data

ing sector over the medium term, especially

of lower-than-expected tax revenues and

published by the European Commission. The

in the machinery and transport equipment

increasing unemployment benefits. Fiscal

economic perception indicator plunged from

sector.

measures could also be tailored via support

99.6 points in March to 65.3 points in April. Vasilescu says that the way people are thinking and doing things is changing, includ-

In addition, growth in domestic consumption is likely to slow owing to lower social expenditures and softening industrial

from international organisations, including the EU, the EBRD and, possibly, the IMF. Romania’s EUR 34 billion in foreign

www.business-review.eu Business Review | May 2020

32 LOCAL ECONOMY

exchange reserves cover 86 percent of its

back to work, while hotels will have a list of

HUMAN RESOURCES DROP BY 15 PERCENT

foreign-currency-denominated public debt

health and safety measures to follow in order

The crisis can be seen clearly in an industry

and 235 percent of total short-term foreign-

to take in tourists.

that had grown in the last 10 years: human

currency denominated economy-wide debt.

The auto industry has returned to work,

resources. The local HR services market will

Accordingly, the central bank has sufficient

including the Dacia-Renault and Ford facto-

fall by about 15 percent in 2020, the first year

capacity to address the crisis in the domes-

ries. But their problems were not generated

of correction for this industry out of the last

tic economy whilst ensuring a stable RON

by the COVID-19 restrictions, but by the

10 analysed, as a result of market maturation

exchange rate. After a policy rate cut of 50

falling demand for new vehicles. And as long

and the coronavirus pandemic, according to a

base points to 2 percent in March, the central

as demand doesn’t return to high levels, auto

KeysFin study.

bank is unlikely to pursue further aggressive

manufacturers will still be in trouble. Surpris-

interest rate cuts in order to safeguard the

ingly, Dacia may have better sales than its

Romania increased by 12.3 percent in 2018

exchange rate.

competitor since it is still one of the cheapest

compared to the previous year, and exceeded

cars in Europe.

the 2009 level by almost 337 percent. At the

At the same time, quantitative easing could play a greater role in the central bank’s efforts to stimulate the domestic economy going forward. As far as the country rating is concerned, the weak fiscal management of Romania’s previous government is reflected in Scope’s Negative Outlook on the country’s BBB- ratings. The current caretaker government has taken decisive actions towards mitigating September’s pension hike while structural adjustments to the tax system and overly rigid expenditure items have so far not been enacted. ”We consider the current counter-cyclical fiscal measures to be important in safeguarding the economy against a more pronounced GDP contraction. At the same time, timely and credible policy actions toward a more prudent fiscal framework in the medium term could support the country’s BBB- ratings,” the EC report reads.

COLLAPSED ECONOMIC SEGMENTS To name just a few of the worst hit businesses, we have the auto industry, restaurants, coffee shops, hotels, beauty shops. We can also add the textile industry, footwear manufacturers or any other manufacturers that are not on the list of base products. Oil companies are hit by the decreasing barrel price, but before that they were hit by the contracting demand for fuel (down by approximately 30 percent in April). The good news is that some businesses will reopen after May 15. Romanian president Klaus Iohannis announced that the state of emergency would end on that date and some restrictions would be lifted, but not for all businesses at once. Over 100,000 restaurant employees will have to wait until June to go

The turnover of HR service providers in

www.business-review.eu 2020 Business Review | May 2016

LOCAL COVER ECONOMY STORY 33 14

end of 2018, the industry recorded revenues

just a few weeks, when technical unemploy-

ment investment programme is needed for

of RON 4.2 billion and KeysFin analysts esti-

ment or employment contract suspensions

manufacturing and services (to ensure local

mate RON 4.9 billion for 2019.

have become a reality for over one million

production of basic goods and services: food,

Romanians.

equipment, health, education, and security),

â&#x20AC;&#x153;HR services have been among the industries with a rapid rise in the local economy,

According to data from the Labour Minis-

agriculture (given the unfavorable weather

and our analysis shows both the growth trend

try, on April 29, there were 1,027,117 suspend-

conditions), and especially to support the

and the diversification of services. But now

ed employment contracts, of which 327,200

advancement of technology and digitaliza-

it is the time for the sector to mature: solid

in the manufacturing industry (32 percent),

tion in the Romanian economy. At the same

businesses with know-how and important

185,000 in retail (18 percent), and 115,000 (11

time, a temporary reduction of taxes, if not a

customers will remain, while small compa-

percent) in hotels and restaurants.

suspension following the model set by other European countries, would be a real breath of

nies lacking logistical and financial power

As a rate, according to the methodology

will either reorient to adjacent services or

for calculating the unemployment rate, the

will disappear. In 2020, the watchword will

number of suspended employment contracts

be reinvention, regardless of the type of busi-

compared to the total active population (9.1

SME INVEST PROGRAM

ness in question,â&#x20AC;? said Roxana Popescu, the

million people in Q3 2019 according to INS) is

The government is trying to help small and

managing director of KeysFin. Approximately

currently at 11 percent. Unlike the temporary

medium companies through SME Invest

3,500 companies were active at the end of

nature of suspensions, the evolution of ter-

(IMM Invest Romania). The state is helping

2019 on the local HR services market.

minated employment contracts (143 percent

companies get financing from banks with

increase compared to March 30), to almost

a guarantee that covers up to 90 percent of

The net result (net profit minus net loss) of HR service providers advanced by

271,000 on April 29, is worrying.

fresh air for the local business environment.

the loan value. There are two types of loans:

3.3 percent in 2018 compared

The number of unem-

investment credit and working capital credit.

to 2017, to reach RON 228

ployed (15-74 years

The maximum guaranteed ceiling is RON 15

million. Of the almost 3,460 companies analysed, more than

old) also increased significantly in March to 410,000, with the

billion, provided through the National SME Fund (FNCGIMM). For working capital loans to medium-sized

half (52 percent)

unemployment rate

companies, the maximum value of the credit

made a profit, 32

increasing by 0.7

is RON 5 million and the state guarantees

percent had losses,

percentage points

up to 80 percent of its value. The maximum

while the rest

compared to Febru-

financing period is 36 months, with a pos-

reported a net zero result in 2018. The number of employees in the field totalled 54,500 in 2018, 4 percent below the 2017 figure.

ary, to 4.6 percent. In addition allowing companies to keep employees in technical unemployment, the government has also taken other

sible extension of another 36 months, and the interest rate is composed of ROBOR at 3 months + 2.5 percent per year, fully subsidised the state budget. The costs of granting, monitoring, and administering the guarantees granted in the name of the state will also

measures to support local companies, such

be supported from the state budget. For small

switch among the top ranking companies in

as: postponement of installments, SME Invest

and micro enterprises, the maximum value of

the field by turnover in 2018. Lugera & Makler

(applicable to only 40,000 companies - only 5

the loan is RON 1 million, and RON 500,000

became the market leader, exceeding Adecco

percent of the total companies that reported

respectively.

Resurse Umane (the main player in 2017) by

financial results in 2018) and the 10 percent

a small margin. The turnover of the 1st place

bonus offered for the on-time payment of the

RON 10 million for medium enterprises, with

company went over RON 321 million, with

quarterly tax. At the same time, the decision

maximum 80 percent guarantees from the

a market share of 7.6 percent. In third place

made by the central bank to buy govern-

state. The financing period is of 72 months,

came wManpower HR, with RON 195.6 mil-

ment securities is the measure with the most

with a possible 18-month extension. The

lion and 4.6 percent of the total market.

significant positive impact.

interest rate is ROBOR at 3 months + 2 percent

NEW CHALLENGES

new jobs, which can be passed through

The KeysFin analysis dedicated to this indus-

companies in the field. However, the pace of

the programme, over 20,000 requests were

try, for 2017, points to the acute staffing crisis

economic resumption depends largely on real

sent to banks by the FNCGIMM. The maxi-

and the challenge faced by companies to find

government support, which motivates local

mum value of RON 15 billion for guarantees is

professional employees in an economy where

companies to expand and hire.

expected to be reached quickly, which means

According to KeysFin data, there was a

However, the HR services industry needs

the demand for staff had long exceeded the supply. But the situation radically changed in

KeysFin analysts believe that a massive, strategically well-targeted govern-

For investment loans, the value goes up to

per year, also subsidised by the state. Within just a few days from the start of

that the state is likely to raise the ceiling for the programme.

www.business-review.eu Business Review | May 2020

34 MUSIC

Worldwide signs of solidarity against pandemic “Music heals” is a universal truth that most of us have already experienced. Countless studies have shown that music can really be therapeutic. But what if those who bring you joy and happiness with their voices and instruments are being goodwill ambassadors? Will you help them reach wider audiences and get more support for the causes they believe in? It seems that we, as fans, are willing to support our favourite artists. Here’s how. By Oana Vasiliu ONE WORLD: TOGETHER AT HOME Fast forward to March 2020, when the coronavirus pandemic basically shut down everything across the world. No gigs, no live concerts, no openings acts, no premieres, no performances. No nothing, because the only way we could fight this virus was to practice social distancing. Still, there were insufficient funds, medical supplies and healthcare workers to fight back against this terrible pandemic. To respond to this crisis, Lady Gaga curated over 100 artists for more than eight hours of live performance together with Global Citizen and the World Health Organisation. However, Lady Gaga later clarified that One World was not meant to be a fundraising telethon, the Guardian noted. Still, post-event, they announced that the show had raised USD 127 million for coronavirus relief efforts. #StayHome explained beautifully

Stars’ live concerts were streamed from their homes as they self-isolated during the coronavirus crisis, including the Rolling

LIVE AID: ONCE UPON A TIME

estimated 1.4 billion of the planet’s 5 billion

Stones and Billie Eilish. Songs were inter-

It was 1984 when two musicians, Bob Geldof

people stopped and watched Bob Geldof’s in-

spersed with messages from actors such as

and Midge Ure, managed to raise money for

credible lineup and were treated to one of the

Matthew McConaughey and Lupita Nyong’o,

anti-famine efforts in Ethiopia by releasing

biggest, most ambitious concerts ever staged.

as well as figures like Michelle Obama and

the song “Do They Know It’s Christmas?”

The press of the time wrote that at one point,

Oprah Winfrey, to name a few. It was unex-

before the winter holidays. A bunch of top

95 percent of the world’s television sets were

pected, it didn’t have the effervescence of a

musicians of the time helped out with the

tuned in to Live Aid – an even more incredible

live on-stage performance, but it showed that

release, and they continued to participate

stat when you think of the fact that it hap-

people we think of as superstars are human,

to this “challenge”, where the world would

pened before we had internet, cell phones,

grateful, but scared as well. This virus can af-

celebrate their love for music by donating to

e-mail, text messaging, video streaming, and

fect anyone, as Pink recently stated, after she

those in need. Live Aid was hardly the first

Twitter. It was pretty incredible. The 16 hours

and her three-year-old son were diagnosed

internationally-minded charity concert, but it

of music ultimately raised more than USD

with coronavirus.

was certainly the most high-profile. And 30+

200 million. Geldof earned himself a knight-

years later, it’s still the standard by which oth-

hood and swore that he would never attempt

because there was no real public, only virtual

er all-hands-on-deck rock and charity events

a sequel – a promise he broke when he staged

concertgoers, and they hadn’t even intended

are judged. For one day – July 13, 1985 – an

Live 8 in 2005.

to do a live fundraising event - still, they

It couldn’t be as powerful as Live Aid

www.business-review.eu Business Review | May 2020 2016

COVER MUSIC STORY 35 14

sociation, which fights against the COVID-19 pandemic, and had fun while learning new things. Nearly 300,000 people watched over 40 live shows during April 17-19, the hashtag #indahousefestival had over 50 million views in those three days, ranking first in trending, and the special filter created for the festival was used in thousands of videos made by TikTok users. May 1 comes with another festival, SolidarLocal (Local Solidarity), the largest festival ever held in your living room, created to support medical staff who work on the front lines. Over 40 bands and artists including Umbra, AG Weinberger, Days of Confusion, Together at home raised over USD 127 million

Emeric Imre, Emilian, IOVA, Jean Gavril, Julie Mayaya, Jurjak, Just Another Lie, and Les

got money from those willing to donate to

concerts that offers a similar service to video

Elephants Bizarres will be part of this festival,

the cause. But Lady Gaga is definitely in

streaming platforms. The catalogue con-

and you can join through a minimum dona-

Bob Geldof’s league, working with charities

tains live concerts from artists in Romania,

tion of RON 30 to the Daruieste Viata Associa-

and fighting for the cause even before the

recorded full HD and with high quality sound.

tion, through iaBilet.ro.

pandemic.

The concerts will be available for streaming

#GivingTuesdayNow, the global initiative,

24/7 and the revenue generated by the plat-

has moved to May 5, so Romania will cel-

cian or a stand-up comedian and you want

form will go to the artists. For EUR 9 a month,

ebrate it with a one-of-a-kind seaside concert

your fans to see you live or perform for them,

the equivalent of a concert ticket, users have

offered by Dan Byron, Lucia, Teodora Mo-

whether in a studio or elsewhere, you can sell

access to all the concerts in the online library,

rosanu (Rockabella), osaciuc (Dimitri’s Bats),

tickets on www.iabilet.ro, just as you used to,

with new productions being added periodi-

Doru Puscasu (man on the moon) and Catalin

and then your fans can go to vStage.ro at the

cally.

Milea. Since May 1 was usually a celebration

THE ROMANIAN CHAPTER Up to this point, only Awake Festival has canceled its 2020 edition, while everyone else has been waiting to see what’s going to happen and what social distancing will mean for festival-goers. Bars and clubs are in the same situation; no one really knows how this is going to work. And considering that top worldwide music events have been postponed for next year, one can only imagine that this will happen here as well. Still, initiatives from both the commercial and underground music sectors have started to appear. iaBilet has adapted to the market situation caused by the COVID-19 pandemic and launched vStage.ro, an online live streaming platform, dedicated to artists, those in creative or liberal professions, and all types of content creators. “If you are a musi-

specified time, enter the code on their ticket

Artists and content creators from Global

day many Romanians spent at the seaside,

and enjoy the livestream,” says the project’s

Records and Virgin Radio Romania DJs spent

we now celebrate it from home and together

website.

Easter with their fans, on TikTok, at the first

open the season of good deeds. You choose

online charity festival, InDa House Festival.

your own generous act, from a small dona-

PR agency Overground Music has launched

There were three full days, during which ev-

tion to a cause you support to shopping for a

Overground Showroom, a video library for

eryone made donations to the Zi de Bine As-

neighbour or any other idea you may have.

The musical management, booking and

www.business-review.eu Business Review | May 2020

36 RESTAURANTS

Social distancing in the restaurant business: what’s next for this industry On March 16th Romanian government officials announced that HORECA businesses would be closed in order to stop the spread of the coronavirus. As a result, some of the restaurants have moved their businesses online – either through takeaway platforms or by delivering food themselves. BR talked to several key figures from the HORECA industry to find out what’s next for them. By Oana Vasiliu

number of transactions has decreased by 88 percent, online takeaway platforms are on the rise. On average, the number of transactions has increased by 60 percent, while their value is up by 90 percent. Since Romanians can no It’s still unclear when restaurant businesses can re-open for public again

longer go to restaurants, they order in using apps to enjoy their favourite dishes at home. While the number of orders through Glovo and Uber Eats has increased by about 50

THE CURRENT SITUATION

on food since the beginning of the quaran-

percent, eucemananc.ro recorded the largest

President Klaus Iohannis recently announced

tine period, with the number of transactions

increase, with the number of orders almost

that authorities would lift the emergency

43 percent higher than the previous month

doubling in the last month compared to the

measures on May 15, but there is no clear

and a 54 percent increase in value, accord-

previous period (the number of transactions

way forward for restaurant owners. Citizens

ing to Revolut, the global financial platform

increased by 104 percent, and their value

will have to wear masks indoors, so opening

with over 1 million users in Romania, with

went up by 193 percent). However, UberEats

restaurants is still out of discussion. Accord-

numbers published in mid-April for the March

announced that it is going to close the busi-

ing to the Labour Ministry, 1,035,585 employ-

14-April 14 period.

ness in Romania starting June 3.

ment contracts have been suspended since

Moreover, the same source reveals that

March 16, of which 112,714 were from HORE-

restaurant spending has dropped significantly

TRENDING INITIATIVES

CA businesses, both restaurants and hotels.

while home delivery services have seen

Since the beginning of the coronavirus

While the prime minister has announced that

unprecedented growth. Revolut data shows

outbreak, a number of restaurants have been

hotels could open back up after May 15, there

that bars, restaurants, and fast food chains

providing food for medical workers - Kane

has been no news of when restaurants could

recorded the largest drops in the number of

with the help of Mastercard and Kaufland,

reopen for the public.

transactions made on their premises, with

celebrity chef Adi Hadean’s project “Social

Starbucks (-94 percent), KFC (-90 percent)

solidarity/Solidar Social”, Kaiamo offering

ing food online. For example, Romanian

and McDonald’s (-75 percent) among the most

food for SMURD staff and local police, to

Revolut users of spent over EUR 12 million

severely affected. Although in restaurants the

name a few.

However, it seems that everyone is order-

www.business-review.eu Business Review | May 2020 2016

RESTAURANTS COVER STORY 37 14

their businesses survive the crisis and this

the recently opened Anika Restaurant, says

be found online, as well as information about

very much depends on what they do now, on

that this situation should teach businesses “to

how to reach or support them. One initiative

whether they have identified new sources

be much more proactive and eliminate food

with a global overview that includes the crisis

of income, how they handle costs, staff rela-

waste – to make the most of every little ingre-

in Romania was started by Ioana Negulescu,

tions and commercial terms with landlords,

dient we get our hands on. Shorter menus,

the founder of Food on our tables. “This

suppliers, etc. Secondly, it’s about preparing

seasonal ingredients are a must; a lot of veg-

is a project that aims to bring people from

for the economic restart that could happen

etables and preserved foods should be used,”

face once this is over. Then, we started tack-

in May. (…) The industry has to prepare for

also adding that “the greatest challenge will

ling these challenges one at a time, which we

consumers that will be more reluctant about

be simply surviving on the restaurant mar-

will continue to do over the next few weeks.

spending money and will definitely expect

ket,” due to the fact that it will be a long time

All our conversations are recorded and sum-

more value for every RON they pay. We also

before we will see dining rooms full of guests.

marised on foodonourtables.com, because

have to anticipate working with half empty

transparency and the ability for these ideas to

rooms because of social distancing and cre-

BACK IN BUSINESS

reach further into the industry are at the core

ate business models that function even with

Slow recovery: this is the most common

of the initiative.”

limited resources and generate smaller costs.

answer BR got from all the people we talked

Optimisation will be a priority for owners and

to. “I expect about 30 percent of restaurants

operators,” the consultant explains.

not to reopen after the crisis, but I am also

Several lists of local food producers can

the food and beverage industry together, and enable them to share ideas, come up with new ones, and start a global conversation that could have a local effect. So far, we have had a series of workshops and roundtables - online, of course - with business owners from Romania, Austria, the Netherlands, and the US (more countries will be added very soon). We have also discussed the most pressing challenges the industry is facing at the moment and will

Helping hands are also coming from ialoc. ro, the app that connects restaurant-goers and restaurants. Since the beginning of the

positive that new ones will appear. As for

crisis, they have transformed their platform,

THE BUSINESSES

turnover, operators are making 80-90 percent

offering paid-in-advance vouchers to the

Asked for comment regarding the govern-

less than usual, because of this freeze in

public in order to support local restaurants.

ment’s help for his business, Ionut Ivan,

activity,” adds Dragos Panait.

“More than 130 businesses are listed on

co-owner of Red Angus Steakhouse, ex-

CardCadou at the moment, of which 49 are

plains that “Employees are the most valu-

scape will be more competitive, and stake-

restaurants and 44 are coffee shops. One

able resource a restaurant has, so technical

holders will more harshly judge brands’ in-

month after launch, over 2,300 cards have

unemployment has helped, as it offered some

volvement in the community. Businesses will

been sold with an average value of EUR 10,”

support to businesses and staff members, in

have to show consumers that they do not only

says Cosmin Magureanu, the CEO of IaLoc.ro.

these complicated times. The urgency certifi-

deliver good food, but that they also support

cate could lead to a rent freeze, for the state

the general ecosystem, that they share their

A SPECIALIST’S VIEW

of emergency period. Still, each partnership

values and principles. Service will also be an

Most HORECA business owners are prob-

is different, and I think that measures depend

important part of the restaurant experience

ably asking themselves what there is to be

more on the relationships between tenants

and the connection between guest and server

done. Some advice is provided by Dragos

and landlords.”

will impact the way businesses are perceived

Panait, founder of Next Root Management Systems. “First of all, they must make sure

Chef Alexandru Dumitru, Gault & Millau’s Chef of the Year 2019 and also co-owner of

Furthermore, “The new restaurant land-

and their levels of success and loyalty,” says Ionut Ivan from Red Angus Steakhouse.

www.business-review.eu Business Review | May 2020

38 GOOD NEWS

More innovation & optimism during the pandemic

Several Romanian companies have shifted their workflows to help the country deal with the pandemic, and their initiatives are really making a difference. By Oana Vasiliu

Photo: Daruieste Viata

Photo: Auchan

Auchan/ Leroy Merlin hospital is opened for treating COVID-19 cases

The new modular hospital from Daruieste Viata NGO

LIFTING RESTRICTIONS

courtyard of the Elias Hospital in Bucharest to

of solidarity with COVID-19 patients, but also

Romanians will be allowed to move freely

treat COVID-19 patients. The plan for the hos-

of support for medical staff working in the

after May 15, president Klaus Iohannis an-

pital was developed together with partners

largest hotspot of the pandemic in Romania,

nounced in a press statement on April 22.

Tesseract, IMSAT, and Linde. It will accom-

according to Vatican News. 200 overalls, 900

Starting May 15, authorities will lift some of

modate approximately 50 beds for serious

FFP2 masks, and 5,000 sanitary masks were

the restrictions imposed during the state of

cases and it’s currently a work in progress.

brought in Romania by the doctors and nurses

emergency to limit the spread of the COVID-19

Another medical facility for for non-critical

who voluntarily travelled to the Lombardy

pandemic in the country. However, protection

patients has opened in the Mogosoaia area,

region for a month to help out in the Italian

masks will become mandatory in all indoor

a courtesy of Auchan and Leroy Merlin, with

medical crisis.

public spaces and on public transport for as

the support of the Health Ministry and the

long as necessary. Other restrictions, such as

Department of Emergency Situations (DSU). A

INNOVATION

the ban on public events, will remain in force,

building belonging to Leroy Merlin has been

An air sterilization device invented by re-

the president said. By the time BR went to

transformed into a reception, triage, accom-

searchers at Timisoara Polytechnic University

press, no additional information had been

modation, and preliminary treatment centre

has been prototyped for local hospitals that

provided on this matter.

for coronavirus patients, while more serious

could use it in the fight against the coronavi-

cases will be transferred to other hospital

rus. The prototype has reached the lab testing

DONATIONS

units. The inauguration took place on April 24

phase, and preliminary results have been

One of the biggest controversies online was a

and was attended by the Romanian president.

promising, the university announced. They also mentioned that intensive care doctors

statement by Romania’s Labour minister Violeta Alexandru, who in a Facebook post wrote

MORE MEDICAL SUPPLIES

already appreciated the product. The device

about the “feeble” support the government

After a lack of medical supplies hit the entire

is currently being tested in a laboratory on an

had received from local communities and

planet, Romania found local companies to

intensive care ventilator. The Oncogen Insti-

NGOs in its efforts to fight the pandemic. It

produce medical masks. Techtex started out

tute will provide the necessary infrastructure

sparked a lot of anger, because so far, compa-

making 150,000 medical masks per day, and

for microbiological tests. “Research groups

nies and individuals in Romania have donated

from April 15, its production has increased to

from the Polytechnic University of Timisoara

over EUR 20 million, not to mention the value

500,000 masks per day. They are also manu-

have developed the prototype of a device that

of products that many companies have of-

facturing surgical suits, with a current daily

sterilizes the air exhaled by patients, which

fered - from food to medical supplies.

capacity of 1,000 products.

can be used in intensive care units, and could

Pope Francis has donated five pulmonary

be especially useful now, in the fight against

BUILDING HOSPITALS

ventilators and protective equipment to the

the SARS-CoV-2 coronavirus, but also in other

The Daruieste Viata Association has started

county hospital in Suceava, the hardest-hit re-

circumstances,” the university wrote on its

the construction of a modular hospital in the

gion in Romania. The pope’s gesture is a sign

Facebook page.

BR/05/2020

Articles inside

THE LONG WAY BACK FROM THE CORONAVIRUS SLUMP

FIVE INDUSTRIES THAT COULD WIN IN ROMANIA’S NEW NORMALITY

WHERE ROMANIA TALKS BUSINESS IN CRISIS, COMMUNICATION SHOULD BE STRONGER THAN EVER

May, 2020 / Volume 24, Issue 4 www.business-review.eu TAKING A LOOK AT THE POST-PANDEMIC ECONOMY