BR/05/2023

Editor-in-Chief

6 Modern retail spaces maintain steady pace of development

COVER STORY

The snowball effect

Romania is on track to become the most important economy in the region by far, and it has numerous listed companies that have an opportunity to become regional leaders. The growth of the Bucharest Stock Exchange (BVB) has accelerated in recent years: by early 2023, there were 371 companies listed on the main and AeRO markets. Furthermore, the local capital market has attained emerging status based on the FTSE Russell. Since it was founded in 1995 with just nine listed companies, the BVB has gained visibility among investors and entrepreneurs, with more companies tapping into the capital market as a solid funding channel.

On this backdrop, we’re dedicating this month’s cover story to MedLife, a private medical services provider that could not have become the market leader had it not decided to go public, according to Mihai Marcu, the president and CEO of the 28-year-old company, which started trading on the BVB in 2016. MedLife’s successful Initial Public Offering (IPO) came after eight years of zero private listings on the stock exchange, showcasing the capacity of Romanian entrepreneurial firms to attract both domestic and foreign investors and accelerate the growth of the local private sector.

For the past seven years, MedLife has continued its rapid growth as a public company, with its turnover having grown fourfold since 2016, making it the first private medical services operator to cross the EUR 400 million turnover threshold.

Last but not least, MedLife’s listing also brought to the local market new institutional investors who specialised in the healthcare sector. According to Mihai Marcu, the model could be replicated by companies in other industries as well, and they could even attract sovereign funds such as the ones in Norway or Kuwait, which have capital allocations for different industries.

8 MedLife BVB performance highlights potential of romania’s emerging capital market

ENTREPRENEURSHIP

20 Tranzy.ai startup transforming public transport with smart digital solutions

22 Romania’s startup ecosystem sees limited impact from SVB failure

MARKETING

24 Why we should recalibrate expectations around marketing

CITY

28 TIFF your way to ClujNapoca

30 RDW2023: A creative rendez-vous with the city of Bucharest

EDITOR-IN-CHIEF: Anda Sebesi JOURNALISTS: Aurel Constantin, Mihai Cristea, Deniza Cristian, Romanita Oprea, Oana Vasiliu

CONTRIBUTORS: Ovidiu Posirca, Claudiu Vrinceanu

COPY EDITOR: Anca Alexe PHOTO EDITOR: Mihai Constantineanu

PHOTOS: Dreamstime ART DIRECTOR: Raluca Dumitru

PUBLISHER: Bloc-Notes Media Network ADDRESS: 82-98 Calea Grivitei, 1st floor, Hotspot Workhub, District 1, Bucharest, Romania

SALES MANAGER: Roxana Suhan SALES & 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

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

ROCA Investments reaches valuation of EUR 78 million five years after launch

By Deniza Cristian

Paolo Vivona is the new General Manager & CEO and Chairman of the Management Committee at Intesa Sanpaolo Bank Romania. Vivona has over 33 years of experience in banking and business development, including 24 years in management positions. The bank’s new General Manager & CEO has solid expertise in international banking markets, based on know-how he gained at different banks with successful business models and strategies and strong organisational cultures.

ROCA Investments, a brand founded by Impetum Group and the most dynamic private equity company in Romania, has reached a portfolio value of EUR 78 million after five years of operation, marking a significant growth of 50 percent compared to its previous valuation in December 2021 and reporting an annualised return (IRR) of 39 percent to its shareholders. Founded in 2018 with fully Romanian capital, ROCA

Investments has so far completed five capital increases totalling EUR 43.75 million, signed 20 transactions, and made 2 exits.

Between 2018 and 2022, ROCA Investments increased its annual invested amount from EUR 4.19 million in 2018 to EUR 34.67 million in 2022, demonstrating the company’s strong commitment to Romanian entrepreneurial companies.

“The gap between east and west is still unjustifiably large in

terms of the roles investment funds and private equity companies play in the economy, although the last few years have brought developments across all markets on this front. However, this gap is a major opportunity for growth, and the results achieved by ROCA Investments in the five years since its launch stand as proof. Our objective going forward is to make the company a relevant player for specialised investors in western Europe and thus to attract even more new capital to Romania. We remain true to our mission of focusing on strategic sectors of the national economy—industry and agriculture are key for the country’s economic development in the coming years—and investing exclusively in Romanian companies, with the aim of creating regional champions,” says Rudolf Vizental, the CEO and co-founder of ROCA Investments.

Catalin Vasile has been appointed as the new Chief Sales Officer at NN Romania. He has valuable knowledge of the Romanian financial services industry and broad expertise in the development of strategic initiatives. Throughout his career, he has been involved in operational development and sales process digitalization in companies such as ING Bank, Trend Consult, and mindit.io, contributing to building new sales capabilities, transforming distribution, and improving customer experience.

page 5

Life Dental Spa invests over half a million euros in Constanta

By Aurel Constantin

Life Dental Spa, one of the biggest dental clinic chains in Romania, will inaugurate its 11th unit in Constanta at the beginning of May, with an investment that exceeds EUR 500,000. The new Life

Dental Spa clinic in Constanta has a total area of more than 400 square metres and includes five practices. “We aim to provide high-quality dental services with state-of-the-art laser technol-

Stefan Obreja, CEO and cofounder of Life Dental Spa

ROCA Investments focuses on strategic sectors of the local economy

Forty Management begins development of Central District Lagoon City

By Mihai-Alexandru Cristea

2 metres, two large beaches spread across more than 3,200 sqm, and numerous other facilities. The lagoon is expected to be completed by the end of this year.

Forty Management recently announced that it had started work on the development of Central District Lagoon City Bucharest, which it described as the most innovative, selfsustainable mixed-use urban redevelopment project and a unique endeavour in Central and Eastern Europe. The company’s investments in Romania exceed EUR 120 million in value, while its projects in Budapest, Prague, and Warsaw

will have investment values between EUR 140 and EUR 190 million each.

What makes the Bucharest project unique is that fact that it will be the first in CEE to implement the patented Crystal Lagoons technology, which allows the construction and maintenance of cost and energy efficient artificial turquoise water lagoons of unlimited size. It will cover an area of over 10,000 sqm, have a maximum depth of

Additionally, Lagoon City will feature a 323-room 5-star hotel that will be affiliated to an international brand, 401 apartments for rent, 9,200 sqm of commercial and service spaces, a class A, 8,500-sqm office building, as well as countless other facilities, practically creating a mini-city that provides all the necessities of urban living.

The amenities of Central District Lagoon City will include a heliport, concierge services for all apartments, 3 restaurants, 2 beach bars, a 430-sqm bistro that will also serve the beach area, a sky bar, cafes, a private cinema, kindergarten, 2 SPA centres, a beauty clinic, and electric car sharing services.

Natalia Chiritescu has been appointed as Digital Solution Centre Director for EMEA by Stefanini Group. A specialist with over 25 years of experience in the IT and telecommunications sectors, Chiritescu was on the management team of Vodafone Romania for 16 years. She will manage the Stefanini Innovation Centre, Presales and Transition, as part of the global management team, and will lead the EMEA Innovation Centre.

Jimmy Maymann has been named Deputy Chairman of the Board at Superbet Group. He brings extensive senior and board-level leadership experience, combined with a proven track record as an innovator and entrepreneur specialising in creating, developing, and transforming companies across the technology & media sectors, digital services, telecoms, and NGOs.

ogy in all major cities across the country. Constanta has been on our investment radar for a long time, but only now have we been able to identify the best location for our needs—a suitable space in a great area. We will start with five doctors working in the Life Dental Spa clinic in Constanta, and will gradually grow to 10 to 12 specialists,” said Stefan Obreja, the CEO and co-founder of Life Dental Spa. The company plans to invest more than EUR 2 million in 2023 to open at least five new locations.

Simona Pavelescu is the new CEO of htss. She is a highly experienced leader, passionate about understanding human behaviour and identifying business opportunities that deliver results. She has over 19 years of experience in the IT industry, with a proven track record in building and transforming businesses.

Central District Lagoon City

Modern retail spaces maintain steady pace of development

Modern retail spaces in Romania have had a significant evolution over the past 20 years. More than 40 cities in our country have at least one large-scale shopping centre or retail park, and the total number of these spaces reaches 135, according to an analysis by Cushman & Wakefield Echinox. But there is still room for growth, as the total stock of modern commercial space relative to the number of inhabitants is still far below that of Western Europe or even countries like the Czech Republic or Poland.

By Aurel Constantin

More precisely, Romania has a total stock of 4.2 million square metres of modern retail space, where about 70 percent of the total retail trade in our country takes place, while the Czech Republic and Poland have more than double that figure. A study by Colliers shows that 60 percent of the stock of modern commer-

cial spaces is located in the ten largest cities in Romania, all with more than 200,000 inhabitants, which points to uneven regional development. Unfortunately, the development of commercial spaces is closely related to the population’s median income level, the quality of the transport infrastructure, and the economic performance of the region. It is

no surprise that the owners of malls or retail parks have first gone to cities where there is a critical mass for consumption and only later started to look at uncovered areas.

Logistics hubs are currently being developed around smaller towns such as Turda in order to meet demand for online retail, which has seen growth in recent years from small

Iulius Mall in Iasi

towns and rural areas as well. Approximately 100,000 sqm of retail spaces were delivered last year, with retail parks having an 80 percent share, with cities such as Bucharest, Timisoara, Pitesti, Turda, Baia Mare, Slatina, and Miercurea Ciuc benefitting from such investments. The new supply will significantly increase in 2023, as over 230,000 sqm of retail spaces are currently under construction and due to be completed by the end of the year, a total which would represent a record

the year, according to data from the major market players. Prime Kapital – MAS Real Estate, NEPI Rockcastle, Scallier, AFI Europe or Oasis remain some of the most active developers of such properties on the short and medium term, which shows that the local market remains attractive even in the face of macroeconomic pressures. On the other hand, the overall appetite for consumption in Romania has encouraged new retailers such as Primark, Popeyes, TEDi or HalfPrice to

“Central banks injected record amounts of money into the economy in 2020 and 2021, while keeping interest rates at very low levels. These measures had also been preceded by a very long period of quantitative easing and very low interest rates. 2022 brought a radical change to this paradigm, with inflation and rising interest rates, and therefore with a reduced appetite for not-sosecure investments. The banking system has been impacted too, with several banks in the United States dealing with bankruptcy, and the system’s reaction has translated into increased caution towards real estate financing. However, the Romanian commercial property market has remained stable, with limited adjustments to capitalisation rates, which, due to the more pronounced growth recorded in other countries, have started to close the gap with yields in Central and Eastern Europe,” said Bogdan Sergentu, Head of Valuation & Consultancy at Cushman & Wakefield Echinox.

for the last six years, according to data from real estate consultancy Cushman & Wakefield Echinox.

Development activity in the 2023-2025 period will be dominated by shopping centres, which have a share of more than 60 percent of the new spaces expected to be built nationwide by 2025. This comes after a few years in which developers' attention was focused on retail parks, which accounted for more than 80 percent of new deliveries. “2022’s new supply and the plans for the next three years prove once again that traditional retail will continue to play a key role in the overall real estate landscape. This can primarily be explained by the fact that malls, retail parks or commercial galleries are no longer just shopping destinations,” says Dana Radoveanu, Head of the Retail Agency at Cushman & Wakefield Echinox.

Almost 600,000 sqm of retail spaces are currently in various planning stages and are expected to be delivered between 2023 and 2025. Around 40 percent of this pipeline is likely to be completed by the end of

enter the country and open their first stores in 2022.

Even the mayor of Bucharest’s Sector 3, Robert Negoita, announced that he was looking to build a mall on the space of the Laminor hall, a historical monument building. The municipality would invest RON 53 million in addition to the RON 400 million that have already been spent on this construction. A draft decision provides for the association of the Algorithm Constructii S3 company, which owns the Laminor hall, and the Sector 3 Local Council in order to complete the project.

COMMERCIAL PROPERTY MARKET REMAINS STABLE

While high inflation and rising interest rates have increased banks’ caution when it comes to financing the real estate sector, Romania’s commercial property market has maintained its stability. In a context where the upward movement of yields in the region has been more pronounced, there has also been a decrease in the gap between local benchmarks and other CEE markets.

The commercial real estate market (office, retail, and industrial projects) is still undergoing a period of price recalibration. Lower liquidity is a natural result of these periods of uncertainty. Sellers are reluctant to dispose of their assets at a discount and they tend to hold on to their properties until they have a clearer view of the general market outlook or until they are forced into a sale, which happens very rarely. Buyers also want the rising financing costs to be reflected in the pricing. This results in a mismatch between buyers and sellers, which tends to drive down the number of transactions.

The retail segment appears to be doing well, with increases recorded in sales and turnover, coupled with a significant growth of both rental and operational expenses on the backdrop of inflationary pressures.

Looking ahead, the second half of 2023 should not bring significant differences, but inflation may begin to decline, albeit slowly, allowing the real wage growth to resume, and therefore consumer confidence—and subsequently consumer spending—should also see some improvement.

MEDLIFE BVB PERFORMANCE HIGHLIGHTS POTENTIAL OF ROMANIA’S EMERGING CAPITAL MARKET

MedLife could not have become the market leader had it not decided to go public, according to Mihai Marcu, the president and CEO of the 28-year-old private medical services company that started trading on the Bucharest Stock Exchange (BVB) in 2016. MedLife’s successful Initial Public Offering (IPO) came after eight years of zero private listings on the stock exchange, showcasing the capacity of Romanian entrepreneurial firms to attract both domestic and foreign investors and accelerate the growth of the local private sector.

By Ovidiu Posirca

For the past seven years, MedLife has continued its rapid growth as a public company, with its turnover having grown fourfold since 2016, making it the first private medical services operator to cross the EUR 400 million turnover threshold.

ROMANIA’S CAPITAL MARKET GAINING REGIONAL PROMINENCE

In an interview with BR, Mihai Marcu was very bullish about Romania’s economic potential. He believes the capital market will play a major role in the country’s development and regional dominance in the coming years.

“Romania is on track to become the most important economy in the region by far, and it has numerous listed companies that have an opportunity to become regional leaders. In fact, MedLife's own stock exchange investors and other funding partners are expecting the company to expand internationally," says Marcu, who has been at the helm of MedLife since 2004, after spending 11 years in the banking system.

The growth of the BVB has accelerated in recent years: by early 2023, there were 371 companies listed on the main and AeRO markets. Furthermore, the local capital market has attained emerging status based on the FTSE Russell, with MedLife included in this index alongside 12 other firms. Since it was founded in 1995 with nine listed companies, the BVB has gained visibility among investors and entrepreneurs, with more companies tapping into the capital market as a solid funding channel.

As of April 10, BVB’s main market had 83 companies with a combined capitalisation of RON 208 billion (around EUR 42 billion), with more than half of the volume generated by the financial, energy, and utilities sectors. Meanwhile, the 288 listed companies on the AeRO market had a capitalisation of around RON 14.5 billion (close to EUR 3 billion).

“Over the past 4-5 years, the capital market has grown significantly in terms of the number of listed companies and IPO interest— and it is set to continue on this path,” says the executive.

The upward trend is also reflected by the number individual investor accounts, which had climbed to 132,000 at the end of last

year. Representatives of the BVB are eyeing a target of 500,000 accounts by the middle of this decade. Marcu suggests that the country’s investment culture is also an important factor when it comes to assessing the outlook for the local market.

“For instance, it is very easy to invest in the capital market in the US, while in Japan, which is also an advanced economy, it is very difficult to do so. Culture also plays a role, and Europe tends to move more slowly on this topic,” he explains. Nevertheless, Roma-

nia’s expanding middle class is increasingly sophisticated when it comes to capital market investments.

To really emerge, our capital market needs to encourage the IPO of public sector companies, as well as a greater awareness of the benefits of stock exchange investments, Marcu argues, adding that listed public sector companies of the likes of Romgaz and Electrica have much better corporate governance compared to their pre-IPO period. “For a public company, this kind of performance can be measured transparently through indicators, and individuals can buy shares in these firms.”

Marcu also points out that the pension funds under Pillar II are crucial for the overall health of the capital market.

“Pension Pillar II is one of the strongest reasons for Romania to become an emerging capital market in the region. (...) It is the first time in Romania’s history when it has a chance to become a regional force, and the capital market is a major component of this opportunity.”

At a regional level, the BVB has one of the highest market capitalisations, which came close to EUR 30 billion at the end of 2022, behind the Warsaw and Vienna Stock Exchanges, each with a capitalisation of over EUR 100 billion. The domestic capital market is already ahead of the markets in Prague, Budapest, and Zagreb, according to official data from BVB and Refinitiv.

ADVICE FOR COMPANIES

PREPARING TO GO

PUBLIC Marcu had been thinking about the listing of MedLife for two-three years prior to its IPO, but the formal process was kicked off in 2015. His first piece of advice for any entrepreneur thinking of taking their company public is to begin to undergo financial audits—if not with Big 4 firms, then with lower-tier consultants— in order to get used to complex financial assessments.

“In my view, it is useful to do it for about 2-3 years before an IPO—and there are plenty of entrepreneurs in Romania who are ready to adapt to such requirements. The listing of a company takes 6-9 months, so there is time to prepare from an auditing perspective,” says Marcu, adding that MedLife, had been working with a Big 4 firm for a full decade before its listing.

The company’s management approach is also a crucial aspect once it goes public, and Marcu says there are two ways to go about it.

“I believe that when a company goes public, it either needs to build a strong financial team in order to keep its founder as CEO, like we did, or hire a professional CEO with market exposure who has

became a bank vice president at 29 years old, managing asset-liability committees (ALCO) and interest rate policies.

He also challenges the misconception that a public company is encumbered by the stricter regulatory framework, pointing out that companies can actually gain more visibility from a wider array of investors through a listing.

“It was a game changer for me to realise that listing and the associated transparency do not represent restraints, but even greater freedom.

Large institutional investors will understand your company better, including its requirements, and they’ll stand by you,” says the CEO, adding that he has shared this with the founders of ten other companies that are now public, who visited him for advice before initiating their IPO procedures.

“During a crisis, a listed company has the capacity to lend from the market— not just from creditors or through bond issuance, but also by issuing shares and consolidating the business. This is an essential element for a public company,” Marcu notes. The first essential piece of advice he has for entrepreneurs who are thinking of an IPO is, “don’t promise more than you can deliver.”

Second, he says there should be “no sudden movements,” underlining the fact that it is important to maintain a high level of transparency for the board and management committee.

cashflow on their mind at all times. The fact that I had a financial background did help me at that point, but I don’t think this factor is that important for firms looking at an IPO now,” he argues. Marcu

Third, he stresses the importance of communication: “A firm that wants to do more than just pursue profit should repeat this at every meeting. It might say that it’s skipping dividend payments because

it wants to develop—or the other way around. This also sets expectations for investors on the market.”

Fourth, firms should be careful about their reporting practices and leave no room for doubt on their acquisitions, hirings or large contracts.

And finally, Marcu says that the company’s relationship with analysts is highly strategic, as they have an important role to play on the capital market.

simply dominating the competition against four or five companies that are pumping hundreds of millions of euros into the market. This might be my biggest source of pride as an individual. We could not have done it without this listing and the trust from investors,” the executive points out.

MedLife’s listing also brought new institutional investors to the market, who specialised in the healthcare sector. The model could be replicated by companies in other industries as well, and they

“They issue forecasts on potential share prices and they need data to create their models, which they collect from investor calls, quarterly reports, and face-to-face conversations with management at least once a year. Messaging regarding a company’s future and long-term stability should be delivered directly, at the highest level. At MedLife for instance, I have repeatedly said that we would not pay dividends if we deliver growth of at least 10 percent each year. This provides guidance for investors so they know where they’re placing their money.”

FINDING THE POWER TO DOMINATE PE-FUNDED COMPETITORS

Going public helped MedLife maintain its leading market position, as it went against two private equity funds—one Swedish, and the other one Polish—that own two other major private medical operators in Romania.

“The private equity funds have brought in hundreds of millions of euros, and only a public company can hope to be able to compete with such strong funding,” Marcu says. MedLife has achieved its success with a Romanian management team and a large share of domestic capital; one third of the company’s capital comes from foreign investors that have put their trust in its vision.

“This is a story of success in Romania, with a local company

could attract sovereign funds such as the ones in Norway or Kuwait, which have capital allocations for different industries.

“In Romania, we’ve recently seen more listings of companies in the real estate and communications sectors, which can attract specialised or portfolio-driven investments. For example, I believe that Hidroelectrica will attract massive investments because it specialises in green energy. What’s certain is that each listing brings more foreign capital and more competitive firms to Romania. Moreover, our stock exchange investors are starting to better understand the market consolidation process and becoming more aware of what M&A entails,” Marcu explains.

Ultimately, the MedLife executive believes that transparency and governance are core elements that public companies should always be striving to strengthen. He adds that “listed companies must exercise great regulatory care, because if one of them were to have a serious governance fault at some point, it would impact the stock exchange on the long term.”

Hidroelectrica’s IPO will be this year’s highlight for the BVB, and it could mobilise more listings of private companies in the next year. Companies raised EUR 1.9 billion from bond and stock sales during 2022, once again highlighting the market’s overall growth potential.

MedLife’s stock exchange journey in numbers

MedLife became a public company through a high-profile IPO that successfully closed in 2016, and it has continued to deliver growth across the board since then. One year after its listing, the medical services company was included in the reference BET index of the Bucharest Stock Exchange; in 2022, MedLife was included in FTSE Russell's Emerging Markets indices.

The company became the first private medical services operator in Romania to exceed an annual turnover of EUR 400 million. MedLife’s vision is to develop large scale medical hubs in major Romanian cities and offer integrated services, while also investing in digitalization and innovation.

By Ovidiu Posirca

THE MEDLIFE NETWORK AT A GLANCE

The company is the largest employer in the local medical sector, with more than 10,000 employees and collaborators, of whom 4,500 are doctors, according to data from December 2022.

• 200 collection centres

• 205 clinics, microclinics, occupational health centres

• 34 medical labs

• 27 hyperclinics

• 23 pharmacies

• 18 dental centres

• 16 hospitals

• 6 COVID labs

• 4 maternity hospitals

• 1 stem cell bank

6 million – the number of unique patients 800,000 – the number of MedLife subscribers 600,000 – the number of investigations processed monthly 30,000 – the daily number of patients using MedLife’s services 98%

– the share of MedLife suppliers who are Romanian

FINANCIAL HIGHLIGHTS

Assets rose 4.6 times from 2016 to 2022, reaching RON 2.15 billion

Turnover increased fourfold from 2016 to 2022, reaching RON 2 billion

EBITDA rose 5.2 times from 2016 to 2022, reaching RON 284 million

YIELD PERFORMANCE

Since its IPO, the company’s capitalisation grew 4.65 times, which translates into an yield of 365 percent, outpacing the growth of the BET-TR index, which includes dividends and had a yield of 178.7 percent.

CAPITAL MARKET EVOLUTION

MedLife is the 13th biggest company on the BVB by market capitalisation, which reached RON 2.4 billion at the end of 2022

MedLife is the seventh most traded company on the BVB

In 2022, MedLife got the maximum score (10/10) for its communication with investors, based on ARIR’s VEKTOR index

De’Longhi maintains growth momentum despite market decline

Romania’s coffee machine market is becoming more sophisticated, with people spending more on their home coffee makers, said Massimo Paronitti, General Manager at De’Longhi Romania & Hungary, in an interview for Business Review.

By Anda Sebesi

What were the main developments on the Romanian coffee machines market last year?

2022 was a particularly challenging year for our industry—not just locally, but throughout Europe. The war in Ukraine led to increases in raw material and energy costs, which were accompanied by high inflation, rising borrowing costs and, once again, difficulties with logistics chains and stocks. However, the market remained relatively stable, with a small (3 percent) decrease in volume, but an 8 percent increase in value, meaning Romanians are spending more on their home coffee machines. That’s not to say that price is not important. The market is getting more sophisticated, as people are paying more attention to value for money, quality, functionality, and design—meaning overall reliability. This trend is highly beneficial for De’Longhi, as our espresso machines enjoy an excellent reputation.

What were De’Longhi’s results in Romania in 2022?

Overall, the Romanian Commercial Division maintained its upward trend in 2022, with the best results since its establishment: +9 percent compared to 2021. As for the coffee segment, we confirmed our leadership position with a 33 percent market share by value. We had a record high share on the manual espresso machines with built-in grinders segment, which are on the rise on the market: we own 58 percent of this particular segment in terms of value.

How is the Romanian market positioned in the wider group?

In terms of production and investment value, Romania is the main country within the Group following the opening and development of our two plants in Jucu and Madaras. We are aiming to become one of the main markets from a

ABOUT

has been the General and Commercial Director for Romania and Hungary in the De’Longhi Group since 2020. He first joined the Group in 2008 and in 2012 he was appointed as General Manager of De’Longhi Romania, responsible for the opening of the group's first factory in the country. Between 2016 and 2020, he was the company’s Operations Director for Europe.

commercial point of view as well, as soon as possible.

What are your expectations for the coffee makers segment in 2023?

After the unexpected challenges we faced in the previous years, like the pandemic and then the war in Ukraine, we are certainly more cautious about making predictions than ever before. However, coffee machines remain our company’s main focus, and we are very confident in the amazing products we’ve already launched and those we are planning to launch this year. For example, we’ve recently introduced to the market the first fully automatic coffee machine that can make hot, cold, and cold brew coffee recipes, all at the press of a button. We dare to say the Eletta Explore is a machine that will create and develop new consumer segments for the market, such as the home cold brew connoisseurs and the home coffee cocktail lovers. With this in mind, I have a very positive outlook for this year, and even though we may face new challenges on the market, we will definitely maintain our leading position and growth momentum.

Massimo Paronitti

Startup investments declining, but founders should not lose faith

Time for some bad news: the number of financing rounds attracted by tech startups in Romania has dropped considerably. Only seven substantial investments were announced in the first quarter of 2023, compared to 16 in the same period of last year.

By Claudiu Vrinceanu

The trend indicates the tech industry is still reeling from 2022’s high interest rates and broad economic uncertainty. But if we take a look at the total value of investments, we’ll see that it’s not the end of the world: they reached EUR 14.3 million, down just 10 percent compared to the first quarter of 2021 (EUR 16 million) and up 27 percent versus the same period of 2022 (EUR 11.2 million), according to Business Review calculations.

Startups in Romania have come to understand that 2023 will be a challenging year for teams looking for funding as venture capital funds are being more cautious and trying to keep the capital they have for follow-on rounds that will mainly go to startups in which they have already invested and which are part of their portfolios. Ultimately, we

should analyse this trend in the context of the decline: what’s going to happen to startups that were funded in 2021 and 2022? Companies with an actual business model and a route to profitability, which may need help raising money, may experience a decrease in valuation. Meanwhile, tech-driven companies in areas that are still “hot,” such as AI, are rising, even amid harsher market conditions.

The largest funding rounds of Q1 2022 were attracted by Ogre AI (EUR 2 million) and Archbee (USD 2 million), two startups that have moved to other countries. This year’s champions so far have been Veridion, with a late seed financing of USD 6 million, and Videowise, an eCommerce video platform that recently received USD 3 million in seed funding.

Kubeark, an open and infrastructureagnostic platform, has raised USD 2.8 million in a pre-seed funding round. The investment round was led by Credo Ventures, and also attracted the participation of Seedcamp, LAUNCHub Ventures, 500 Emerging Europe, and others. Profluo, a startup that builds machine learning technology for the automatic processing of accounting documents, has reached a total investment value of EUR 625,000 less than a year after completing its first seed round. Along with Early Game Ventures, which was the main VC investor, a series of angel investors have also recently joined.

Vatis Tech, the local startup that creates voice recognition technology based on artificial intelligence, reached a valuation of more than EUR 4 million after attracting a second round of funding worth EUR 650,000. FieldOS, a startup for real-time asset operations management, has drawn funding of EUR 620,000, of which EUR 200,000 were raised on SeedBlink. The money will be used to develop the company at the international level, including in the US restaurant industry and in the UK business and residential buildings sectors. The new round saw the participation of existing investors Early Game Venture and Sparking Capital and business angels.

Another relevant round, particularly for the fintech segment, was attracted by Instant Factoring, the micro-financing platform for small companies, which got an investment of EUR 600,000 that it intends to use for expansion. Instant Factoring’s backers include social investment company MicroEurope.

In conclusion, some investors seem to be slightly worried by the steep decline in funding, but when compared to the pre-covid period, things are looking rather normal.

Some investors seem to be slightly worried by the steep decline in funding

Romania’s advantages over other CEE countries as an FDI destination

2023 started well for the Romanian economy, especially in terms of the regional competition to attract foreign investors. The International Monetary Fund (IMF) expected the Romanian economy to grow by 3.1 percent this year, aided by European Union funding, currency stability, and foreign investment, allowing it to outpace stagnating neighbors like Poland and Hungary.

By Claudiu Vrinceanu

But what’s happening in the economy after the first four months of 2023, and how can Romania gain an edge over neighbouring countries to attract more foreign investors? Let's take a look at four categories of competitiveness: the potential relocation of multinational companies, which could be the key driver of foreign direct investment (FDI), followed by the labour market, monetary stability, and digitalization.

NEW RELOCATION OPPORTUNITIES

The current regional context could generate many investment opportunities in Romania. One of them is the relocation of multinational companies from Ukraine and Russia. Romania is in pole position at the European level regarding executives' plans to relocate their business support services and supply chain functions into Europe (re-shoring and near-shoring) to minimise future disruptions, according to EY. The first moves from Russia to Romania are still expected. Nokian Tyres, a company looking to invest in a new tire factory in Romania, has given the first signal. Nokian produced 80 percent of its annual production of approximately 20 million tires in Russia before the war in Ukraine. According to a report by the Polish Economic Institute, Ukrainians accounted for 45 percent of all

new foreign companies that set up shop in Poland last year. Meanwhile, only 20 firms from Ukraine moved to Romania or increased their investments on the local market.

LABOUR FORCE STILL A CHALLENGE FOR INVESTORS

Finding suitable workers is increasingly difficult for foreign investors, particularly in the manufacturing sector. At the moment, Romania has the most permissive legislation for economic immigrants among the countries in the region. This is an advantage over countries like Hungary, Poland, and Bulgaria, but this should be supplemented by a strong initiative to reintegrate able-bodied people who are not working into the labour force. The acute need for foreign workers in Romania was evident last year, when companies hired a total of 100,000 foreign workers, reaching the ceiling set by the government. In 2023, Romania will accept the same maximum number of foreign workers. By comparison, Hungary, a much smaller country, needs 500,000 additional workers, based on data from its Economic Development Ministry.

GROWTH POTENTIAL: FROM ECONOMIC STABILITY TO THE BOON OF DIGITALIZATION

The record demand for Romania Government Bonds has positively impacted the Romanian currency, which has remained below the central bank’s intervention level since the beginning of the year. The leu’s (RON) stability is another one of the country’s advantages, especially when compared to Hungary's forint, which hit multiple record lows last year. Massive inflows into bonds have helped the RON to reach levels below 4.90 EUR/ RON several times. The development of the digital economy accelerates companies’ digital transformation, which has an important impact on business outcomes, including foreign investment decisions. Romania is the third-largest digital economy in CEE, with a value of EUR 14.8 billion—or about 6 percent of GDP—last year, ranking below Poland (EUR 44 billion) and the Czech Republic (EUR 18 billion) and the second-largest digital commerce market. According to McKinsey, Romania's digital economy could grow 3.5 times to about EUR 52 billion by 2030, with ICT and digital commerce as its main growth drivers. However, the country needs to catch up in terms of attracting significant investments in IT&C. A comparative example is Microsoft’s opening of a data centre in Poland, the type of asset that can only be described as an unattainable dream for the local economy.

The acute need for foreign workers in Romania was evident last year

Tranzy.ai startup transforming public transport with smart digital solutions

Romanian startup tranzy.ai launched during the pandemic with a platform that digitalizes public transport operators that’s already in use in four cities, with plans to expand across Romania. Doru Chirica and Stefan Holicov, the co-founders of tranzy.ai, talked to BR about the startup’s preparations for a funding round and their long-term vision of expanding in the region.

By Ovidiu Posirca

What is the founding story of tranzy.ai and how are positioning the startup on the local market?

The story of tranzy.ai began somewhere in 2011, driven by the desire to focus more on urban travellers, which were already our core target. At that time, the business was part of the media and advertising industry, operating as a digital signage network for public transport.

This network of screens was essentially an information system for passengers; its primary role was to inform bus passengers about their current routes and, secondarily,

to display commercial content. It didn't seem like an extreme challenge for us, as we had developed our own content software (CMS) in 2007, which could display multiple types of content from various sources, and the embedded computers on which it was installed were also equipped with GPS modules. Therefore, the only thing left to do was to obtain the route information from the fleet management provider of the public transport operator. The attempt failed, however, because the provider had only provisioned their technical resources to provide information at a frequency of over 30 seconds, which

was much too slow for the purpose, since the distance between two stations could sometimes be covered in just one minute.

So we were faced with a decision: we would have to either give up this type of content or solve the technical problem by building a small software solution that would give us the information we needed. We chose the second option, and 2020 was the year in which tranzy.ai was actually born, bringing together all the assets and expertise we had accumulated until that moment, based on the same system of values, but with a different vision and a much higher goal. Unexpectedly, the break we were forced into by the pandemic helped us bring some clarity into our vision.

Tranzy.ai is currently a fully functional platform in Cluj, Iasi, and Botosani, as well as in Chisinau. Brasov and Timisoara are next, along with many other cities in Romania, regardless of their size but strictly dependent on their openness and desire for change.

Which areas of the public transportation system are ripe for disruption?

The public transportation system is prepared for a change in perspective and mindset in terms of acquisition methods: shifting from buying physical products (hardware) with pre-installed software with specific functionalities to buying services with functionalities that are dependent on the existence of software and being delivered through hardware (as-a-Service).

Getting the actual users of public transport

involved is another important aspect, with operators choosing to make their operational processes transparent by exposing open data through our Open Data Portal and communicating bi-directionally with citizens using the tools we provide directly or those from different suppliers indirectly, using the same Open Data portal for their apps and products, with different specific features.

How is your solution helping public transportation companies? What has been the feedback from these firms?

Tranzy.ai provides transportation companies with a platform that automates much of their daily planning and operational activities for thousands of vehicles and resources involved in passenger transportation. The platform is free to use and offers a suite of solutions that are designed for public transport activities, such as: fleet management/AVL software, a mobile app for dispatchers, route-related alert generation, the tranzy.app application that turns the digitalized processes and operations of public transport operators into benefits, and the open data portal (Public Open Data). Tranzy.ai acts as a collaborative platform in the urban mobility digitalization process, fostering an equitable environment where all stakeholders involved in building smart cities and transport development can cooperate and compete under a fair and unified set of rules. At the same time, tranzy. ai develops right-on-point mobility solutions that are ready to be purchased, like transport-related applications and functionalities, facilitating a better allocation of resources (vehicles, drivers, stations, garages, etc.) and digitalizing the activities of public transportation companies.

Some of these types of solutions have already been implemented in cities where the platform is being used. This includes a passenger information solution in bus stops (digital information panels), with a soonto-be-launched audio accessibility feature for the visually impaired, and a live map of routes and real-time positions of vehicles.

The mobile app for travellers—tranzy. app—is an example of functionality that the tranzy.ai platform provides for free, by processing data from its own solutions, thirdparty solutions, and the real-time operations

of public transportation companies and authorities. Tranzy.app is being used by over 150,000 daily travellers in Iasi, Cluj-Napoca and, as of March, Botosani and Chisinau.

There’s a positive attitude towards innovation among public transport operators, who are showing openness and willingness to embrace new ideas, technologies, and ways of doing things in order to improve the quality and efficiency of their services. Their feedback is essential, and that's how tranzy.ai took shape: by involving public transport operators in the process, but especially by recognising the need for the solutions that tranzy.ai provides, thereby facilitating the development of more effective and user-friendly transport services. We build all our products and services by actively collaborating with public transport companies, collecting constructive feedback from transport service users, and conducting rigorous research on smart mobility and intelligent transport systems.

Are you currently looking to finance your startup?

In order to keep up with the excellent traction it has achieved so far and to increase the velocity of new product creation, the company is preparing for a funding round with several sources, including investors, VCs, and government agencies. They all recognise and acknowledge the value and potential of tranzy.ai's contributions to the field of smart mobility, intelligent transport systems, mobility-as-a-service, and artificial intelligence.

How aware of urban mobility trends are representatives of the public sector?

Public sector representatives and public transport companies are generally aware of

urban mobility trends. However, despite their awareness of these trends, there is still no comprehensive solution that can reconcile all of them effectively. This includes dedicated lanes for public transport, smart city policies, cloud-based solutions, as-a-service acquisitions, and micro-mobility options. Currently, there is growing awareness among public sector representatives regarding the critical

importance of making mobility data available to the public to facilitate informed decisionmaking and planning. While some progress has been made, like the Bucharest Municipality’s efforts to make public transport data available through Google, there is still a lot of work to be done to ensure that such data is made widely available and accessible to all stakeholders in the field of urban mobility.

What are your plans for the startup on a longer term?

We aim to reach as many cities in Romania as possible, regardless of their size; the only condition is for public transport operators and local authorities to be willing to adopt tranzy.ai's platform. We also envision a further expansion of our operations beyond the country's borders, especially in other countries in the region. And speaking of expansion, in the medium term, we also want to expand our capabilities and expertise to other verticals of mobility where similar principles apply.

Romania’s startup ecosystem sees limited impact from SVB failure

The sudden decline of Silicon Valley Bank has startled the US startup industry and banking system, as many feared it would generate an international banking crisis. But within less than one month, most of the lender’s assets were acquired by North Carolina-based lender First Citizens BancShares. For startups in Romania, the impact of these events will be rather limited, as the main funding players in the country are venture capital firms compensating for banks’ lack of interest in early-stage firms. However, the outlook would darken dramatically if a banking crisis were to emerge in Europe.

By Ovidiu Posirca

SVB was not a system-critical bank, but it had a strategic role for the innovation sector. Overnight, hundreds of thousands of jobs in the technology sector and deposits from over 1,000 venture funds were suddenly at stake, Venionaire Capital CEO Berthold Baurek-Karlic wrote in a commentary for Wiener Zeitung.

SVB’s success among entrepreneurs stemmed from its support for pre-revenue companies with funding tools that were designed specifically for startups. Its downfall started on March 8, when it announced a

loss of USD 1.8 billion as it sold some investments to cover increasing withdrawals from customers. It was looking to raise another USD 2.25 billion from stock sales, but on the following day depositors tried to withdraw a total of USD 42 billion from SVB. In the coming days, tech startups started looking for alternative funding sources as their deposits were locked up in the struggling bank. The US government stepped in to protect the deposits, and by the end of the month First Citizens BancShares bought the failed bank. As a result of the deal, First Citizens' total

assets reached USD 219 billion. “The SVB collapse was paradoxically not related to high-risk tech startup investments or lending, but to them placing money in arguably the lowest-risk asset, namely US treasury bonds. Everybody now knows how the story unfolded; there’s been no loss for the IT startups using SVB for either deposits or other type of banking activities, so in theory, there’s no harm done. However, we expect that there will be an effect among investors in terms of the credibility of the Silicon Valley ecosystem at large—a negative effect, for

SVB’s success among entrepreneurs stemmed from its support for pre-revenue companies

sure,” Marius Ghenea, managing partner of Catalyst Romania, tells BR.

BANKS AND STARTUPS STILL ON PARALLEL TRACKS

Ghenea suggests that the spillover risks for EU investment markets are limited because EU investors continue to get large public allocations of funds from financial institutions having Europe-wide or smaller regional or

ered too risky by traditional lenders such as banks. Additionally, most banks in Romania are retail-focused, specialising in granting consumption loans and real estate mortgages,” Munteanu explained.

Historically, SVB had been filling a gap in the startup ecosystem that few other banks would attempt to fill.

“European banks are risk averse and much more hesitant when it comes to

underdogs and the underestimated founders who defy the odds.

“It was so fulfilling to help a founder with their pitch, business model, GTM strategy or make successful investor intros leading to capital raises,” Ren wrote.

In Europe, the most visible effect from SVB’s downfall was seen in Switzerland, where UBS decided to purchase Credit Suisse for more than USD 3 billion. The deal designed by Swiss regulators was aimed at preventing a crisis of the banking system. Elsewhere, banks and regulatory bodies have rushed to assure people that their money was safe inside the banking system.

EUROPEAN STARTUP FUNDING DOWN IN 2022

national deployment scopes. By comparison, the US ecosystem overwhelmingly relies on private investors, and within the EU these funds need to continue investing in companies in order to meaningfully use those funds.

“In my opinion, the effect on relevant local or CEE early-stage investment markets will be limited, unless something similar happens with European banks,” Ghenea adds.

Cristian Munteanu, founder and managing partner at Early Game Ventures, said in an interview for BR that the SVB crisis did not escalate thanks to swift state intervention. He added that the situation is very different in Romania because there are no institutional startup lenders on the local market.

“Startups are young, largely still unproven companies, with almost no assets that can act as collateral. Such companies are consid-

lending to startups, specifically technology companies,” Baurek-Karlic wrote.

Around 75 percent of European companies that got funding from SVB in the past five years have benefitted from its venture debt financing.

“It will certainly impact the EU IT sector when one of the major investment players is no longer in the game,” said Frederik Schouboe, co-CEO and cofounder of Keepit, according to innovationorigins.com.

After the bank’s closure, Bo Ren, a former director of early-stage startups at SVB, wrote on LinkedIn that she loved working with the

Last year’s slowdown in startup funding across Europe was due to higher financing costs, the ongoing war in Ukraine, and the restructuring of large US-based tech companies. Data from Crunchbase shows that venture and growth investors injected USD 90 billion in European startups in 2022, down 25 percent compared to 2021, which was a record year for the industry. Nonetheless, the total funding volumes from last year were almost double compared to those in 2020, when the pandemic was all over the news. Meanwhile, the North American and Asian startup funding markets were down 36 percent and 39 percent respectively year-on-year in 2022. “There’s a realistic chance that [the slowdown] might not really trigger fully in Europe until Q1 [2023],” said Hussein Kanji from Hoxton Ventures, noting that Europe “fluctuates more with the markets. When times are good it goes up higher than expected, and I suspect when times are low it will go lower than expected.”

Why we should recalibrate expectations around marketing

Despite the challenging economic times, marketing investments in 2023 are expected to remain strong. In fact, 89 percent of CMOs and senior marketing executives say they’re planning to raise their marketing budgets, with 44 percent indicating that those increases will be substantial, according to eMarketer.

By Romanita Oprea

Astudy by EGC Group, a New Yorkbased, full-service, integrated marketing and digital agency, shows that over 60 percent of business owners plan to maintain or increase their marketing budget for 2023, while 36 percent say their biggest marketing challenge is keeping up with everchanging social media algorithms.

While nearly half (48 percent) of the business owners polled reported having negative feelings about their business outlook for 2023, a third (33 percent) revealed that they were sticking with existing plans to expand their businesses, many looking to introduce new

products and services to increase revenue. 37 percent said they were likely to increase their marketing spend and 30 percent noted they’d maintain it. The survey suggests that many businesses aren’t pressing the panic button, but rather doubling down on the future. “Many are looking at a potential downturn as an opportunity,” observed EGC Group President Nicole Penn. “We also see that the respondents plan to make a greater shift to digital marketing, showing the value of targeting and measurement that digital brings.”

Economic uncertainty will drive marketing innovation—with an eye towards efficiency

and increased profitability—as brands and marketers adjust their marketing approaches to the current climate. Moreover, there are case studies showing that brands that invest in marketing during a downturn are positioned to accelerate growth when the upswing comes. Procter & Gamble actually increased its marketing budgets during the covid-19 pandemic to keep brand salience and enjoyed revenue growth of 4 percent in 2020.

AN EYE ON METRICS

Alana Badcoe of Market Treach argues that demonstrating effectiveness will be challenging for marketers. They’ll need to control costs and prove the value of every dollar spent during this period of economic uncertainty. “The variety of metrics used by brands adds an extra layer of complexity; effectiveness can mean different things depending on business goals. Long-term brand building, creating advocacy, boosting footfall or generating high quality leads are all marketing objectives that require different metrics to show success. Consumer attitudes towards their data and privacy shouldn’t be ignored.”

In the UK, Parliament is set to resume work on the “business-friendly” Data Protection and Digital Information Bill, following a hiatus. “If consumers feel their data is being misused, they will push back. Adblocking has been on the rise again over the past two years—especially on desktop. These factors have implications for measurement. The need to control costs could result in switching spend out of perceived expensive advertising channels—and many are experiencing inflationary pressures, including Pay Per Click and TV—to lower-cost channels,” Alana Badcoe added. However, efficiency in media buys

Claudia Chirilescu, Spoon

shouldn’t be confused with effectiveness. Efficiency often translates to “cheaper,” but this may not deliver the reach, attention or quality of audience a brand is aiming for.

GOING DIGITAL

A lot of uncertainty is also expected in digital marketing due to the introduction of more app tracking transparency by Apple, together with Google’s plans to end the use of thirdparty cookies. This means the focus on the value of first-party data and a growing use of contextual advertising are likely to accelerate this year, and this will influence which metrics are valuable. Marketers in 2023 will have more choices of platforms and channels than ever, but they will need to make sure the chosen channel and the way it’s measured can meet their objectives.

The fragmented media landscape is only going to become more complex with streaming, augmented and virtual reality activations, and new social media platforms beginning to have an impact. Culture formation is increasingly a “bubble up” phenomenon that is shaped by communities, “tribes,” and fandoms across a decentralised media ecosystem. For marketers, this means a rethink of the traditional notions of “mainstream.” Taking part in the “bubble up” culture will require brands to find authentic ways of engaging with numerous different communities while remaining true to a clear, overarching brand proposition.

Kantar media effectiveness and touchpoint planning studies consistently show that a minority of touchpoints deliver most of the impact for brands. Across a wide range of markets and categories, we typically see that 20 percent of touchpoints deliver 80 percent of the brand impact. This suggests that brands can maximize ROI by scaling back investments in less impactful touchpoints and focusing budgets on those that deliver the highest impact. Studies also show that digital touchpoints are overtaking traditional channels in terms of brand impact and efficiency. This is a trend that has been accelerated by the pandemic and amplified further by TV ad cost inflation.

Obviously, this does not mean that marketers should abandon TV; on the contrary. TV remains the single most impactful channel

for brands and continues to be the cornerstone of effectiveness in many campaigns. Also, according to Kantar, consumer research has a crucial role to play—both in terms of informing longer-term touchpoint strategies for a brand as post-pandemic media consumption habits take shape, as well as underpinning a test and learn approach to maximising the media effectiveness of individual campaigns.

In the EU, digital marketing represented 56 percent of total marketing budgets last year, while offline and OOH channels are on a downward trend (Gartner – The state of marketing Budget and Strategy 2022). This trend could be observed especially in recent years, which were influenced by pandemic restrictions, leading to a change in the public’s behaviour. “At the present time, a mix between digital and offline channels is suitable, where we must have the ability to anticipate how the population reacts to the sociopolitical changes that are taking place. Brands need to meet the customer where they are, not where brands wish them to be.”

The study carried out by Gartner identifies a trend called "customer journey orchestration" for 2022, which involves the creation of a dynamic communication strategy in which we must consider and prevent possible changes in the customer journey we are following.

“This dynamism implies a constant monitoring of campaigns and their optimisation to reach the desired stage in the conversion funnel. If we look at the budget split in digital, we’ll notice that the highest shares were allocated to Social Media (10 percent) and Search (9.8 percent), followed by Display and Video. This spending ranking once again shows that Social Media is a channel that continues to deliver and generate results. In 2022, approximately 70 percent of the population used at least one SM platform, and Facebook's ad

reach in January 2022 was the equivalent of 59 percent of all internet users in Romania (Datareportal – Digital 2022 Romania). A good practice to get a mix with high conversion potential is to combine it with Search advertising,” argued Claudia Chirilescu, owner at Spoon. Along with the increase in digital budgets, we’re also seeing an increase in the frequency of ads, which is not satisfying to users, as they end up either opting for paid and ad-free versions of the platforms they use or using them less altogether.

Therefore, another important thing to consider is the placement of ads. “This is where the flexibility of the platforms comes in, helping us to adapt the message to user preferences. We also have the ability to optimise the ads according to the message, so that they are well integrated into the channel ecosystem,”

Claudia Chirilescu

added.

These kinds of adaptations are available on most advertising platforms, which have created various tools that help media agencies optimise ads according to placement and messaging, but also vice versa.

In order to achieve their objectives for each campaign, agencies make these adjustments and manage to offer users a non-intrusive and native experience that is adapted to the platforms they are using.

And, as pointed out by WARC’s 2023 Marketer’s Toolkit, paying attention to the tone of the messaging is also important in building connections with customers. Humour is an underused technique, but if it’s used well, it can become a competitive advantage, even during tumultuous times.

“At the beginning of 2023, brands are still focused on attracting new customers, but also on keeping them engaged with the brand. This goal also comes with a challenge: finding the easiest ways to increase the performance of your conversion metrics,” the Spoon owner concluded.

2023 IT trends: It’s all about smartphones, digital transformation, and cloud services

Worldwide shipments of PCs totalled 55.2 million units in the first quarter of 2023, down 30 percent from the first quarter of 2022, according to preliminary results from Gartner research. An unfavourable mix of oversupply and slow demand continues to affect the PC segment due to economic uncertainty and a lack of motivation to buy among consumers, resulting in the second consecutive quarter of historical year-over-year decline, after shipments in Q4 2022 went down 28 percent.

By Aurel Constantin

The historical decline in sales highlights a trend that seems unstoppable: the increasingly extensive use of smartphones to the detriment of PCs. The performance of phones continues to climb and nearly matches that of laptops, while business process applications are using smartphones as control devices. Almost all applications today allow—and even encour-

age—the use of phones as control terminals, as they are much more easily accepted by non-IT people as well. Even identity verification is carried out using phones as a thirdparty control, thus making it safer for users to access applications, including on different access levels.

At the consumer level, there is no longer a question of user preference: the young gen-

erations automatically use their phones to access any type of app, while those from the senior generations, who have not had time to get used to PCs, are learning about the digital world much more easily via smartphones. The phone has already become an integral part of daily life through the multitude of applications it offers, and it is going to become even more important as it allows us to integrate digital identity functionalities. Now we can also use our phones instead of bank cards or physical tickets; soon we will also be able to leave our IDs at home because we have them on our phones.

Smartphones and mobile communications have also allowed the rapid penetration of rural areas by the digital world. Online shopping is now possible via phone in any region with a 4G signal. And the phone doesn't even have to be a flagship model that costs over 1,000 euros. Even mid-range smartphones, which can be bought for a few hundred euros, are now equally capable of integrating apps for mobile banking, online shopping, and everything else.

“I personally believe that smartphones will continue to take over from PCs further human interactions with digital products and services. We already see that smartphones are becoming main access gates to digital identity. This is valid for both consumers and business interactions. What will persist will be use cases that can only be done using PCs/laptops, mainly in business, but also on residential markets, e.g. graphics, CAD, video editing, gaming, etc.,”says Radek Moc, Executive Partner at Gartner.

The young generations automatically use their phones to access any type of app

SMARTPHONE SALES ALSO DOWN—BUT NOT AS SHARPLY

Global smartphone sales fell by 13 percent in the first quarter of 2023, according to Canalys. Still, there were 269.8 million units delivered, five times the volume of PC shipments, thus giving us an overview of the difference between the two device categories. Even more, the demand decline for smartphones has started to flatten, although the contrast between Q1 2022 and Q1 2023 is still stark. Samsung reclaimed its pole position and shipped 60.3 million units, driven by a refreshed product portfolio. Apple came in second with 58 million shipments and it was the only top five vendor to grow yearon-year, which gave it a strong 21 percent market share. Xiaomi defended its number three position with 30.5 million shipments, while OPPO and vivo completed the top five, shipping 26.6 million and 20.9 million units, securing market shares of 10 and 8 percent, respectively.

On the laptop market, Lenovo stayed in first position with 12.8 million units, even as it experienced a 30.2 percent decrease in sales compared to Q1 2022, while HP’s sales went down 24.2 percent to 12.02 million units, according to Gartner data. Dell remained in third place with 9.5 million units sold, a 30.9 percent decrease, and Apple came next with 4.8 million units, a decline of 34.2 percent. Asus sales fell 30 percent to 3.9 million units, while Acer went down 36.3 percent to 3.5 million units. These six brands make up a market share of almost 85 percent, while all other brands had combined sales of 8.5 million units—down 30.6 percent compared to Q1 2022.

PRIORITIES FOR CIOS

An event organised by Gartner in Bucharest in late April discussed the priorities of IT directors in the CEE region and the key trends and forecasts for 2023. Artificial intelligence and machine learning, as well as SASE (Secure Access Service Edge), distributed cloud, and MLOps are the top technologies likely to be implemented by CEE companies by 2025. Regardless of their actual digital ambitions, CEE CIOs and technology leaders see cybersecurity and information security as a top investment area for 2023, as 74 percent

of CIOs are expected to increase funding in this area in 2023 compared to 2022. This also represents a 28 percent increase from a year ago.

All the services above are supported by the cloud. Worldwide end-user spending on public cloud services is forecast to grow 21.7 percent to a total of USD 597.3 billion in 2023, up from USD 491 billion in 2022, according to the latest forecast from Gartner. Cloud computing is driving the next phase of digital business, as organisations pursue disruption through emerging technologies like generative artificial intelligence (AI), web3, and the metaverse.

“Hyperscale cloud providers are driving the cloud agenda,” said Sid Nag, Vice President Analyst at Gartner, in a press release. “Organisations today view cloud as a highly strategic platform for digital transformation, which is requiring cloud providers to offer more sophisticated capabilities as the competition for digital services heats up. For example, generative AI is supported by large language models (LLMs), which require powerful and highly scalable computing capabilities to process data in real time. Cloud offers the perfect solution and platform. It is no coincidence that the key players in the generative AI race are cloud hyperscalers.”

All segments of the cloud market are expected see growth in 2023. Infrastructure-asa-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 30.9 percent, followed by platform-as-aservice (PaaS) at 24.1 percent.

GARTNER DES: MEASURING DIGITAL TRANSFORMATION

One of the common challenges for CIOs, IT, technology, and business leaders is measuring the progress and success of digital transformation. Gartner Executive Partners Václav

Spana and Radek Moc introduced the Digital Execution Scorecard (DES), a comprehensive set of digital strategy benchmarks assembled by Gartner analysts to accelerate decisionmaking, drive execution, and help CIOs and other leaders prioritise investments in digital capabilities and focus on the most important objectives. "DES helps organisations track the progress of digital strategy execution using digital key performance indicators (KPIs). It is not a maturity model. KPIs are benchmarked against industry competitors to generate objective benchmark reports that show strengths and relative weaknesses in different areas of digital execution based on comparisons of ambition and performance among competitors," Radek Moc explained. Digital ambitions can face various business, political, and technological risks, and these are changing rapidly in 2023. While

respondents to the Gartner Emerging Risks Survey in the fourth quarter of 2022 cited the escalation of conflict in Europe, major material shortages, and expectations of stagnant inflation as the three most important risks (followed by critical infrastructure failure and financial planning uncertainty), a similar survey in the first quarter of 2023 found that the top three risks are evolving socio-political expectations, third-party viability, and critical infrastructure failure. "Business leaders should work with scenario analysis, planning, and modelling to be prepared for different possible outcomes—we offer tools such as the sector-specific emerging risk dashboard for this purpose," Vaclav Spana added.

TIFF your way to Cluj-Napoca

The 22nd edition of the Transilvania International Film Festival will take place in Cluj-Napoca from June 9-18. BR asked the TIFF management team about the special things they have in store for this edition.

By Oana Vasiliu

The highlights of this year’s festival will be a new film from Lars Von Trier—Riget Exodus/The Kingdom Exodus (Denmark, 2022), the third part of the cult horror trilogy—and Fatih Akin’s Rheingold (Germany, 2022), inspired by the life of rapper Xatar. Both films were winners at the Venice and Locarno festivals. There’s also the long-awaited Tár, with Cate Blanchett in the leading role, as well as La syndicaliste (dir. Jean-Paul Salomé, France, 2022), the new film starring Isabelle Huppert.

TIFF has also announced Nordic Focus, the most complex programme of its kind in the festival’s history, dedicated to a rich, diverse, and innovative European cinematography coming from Sweden, Denmark, Finland, Norway, and Iceland. The programme is the result of a collaboration with the Göteborg Film Festival and film institutes in all five countries.

RETROSPECTIVES

Founder of the French New Wave and radical film critic and intellectual, director Jean-Luc Godard (1930 – 2022) will be celebrated at the 22nd edition of Transilvania International Film Festival. Eight of his highly acclaimed

films will be screened as part of a special retrospective, Close-up Jean-Luc Godard, organised with the support of the French Institute of Romania.

The festival will also take us on a journey into the cinematic universe of one of the most prolific American directors of the modern period, Sidney Lumet (1924 – 2011), with six restored works. The programme is inspired by the retrospective dedicated to the same director by the Lumière Film Festival (Lyon, France) in 2022, a cinephile event par excellence that celebrates classic cinema by presenting restored versions of masterpieces and tributes to legendary directors.

MUSIC

Courtesy of TIFF, electronic music band

Tangerine Dream will hold its first concert in Romania. Over the past 50 years, the band has released over 100 studio albums and is a seven-time nominee of the Grammy Awards Tangerine Dream has created over 60 film soundtracks, including Ridley Scott's Legend (1985), William Friedkin's thriller Sorcerer (1977), and Michael Mann’s neo-noir Thief (1981). This year’s TIFF concerts will also include a special show by Swedish-British artist Jay-Jay Johanson, who will perform at Bontida during an event dedicated to Swedish music and film. Known for his melancholic voice and hits such as On the Radio, She Doesn't Live Here Anymore, and You’ll Miss Me When I’m Gone, Johanson is considered to be one of the most influential electro artists of his generation.

All photos: TIFF

Tangerine Dream

"Northern Comfort" movie - Opening Gala TIFF

Director Jean-Luc Godard

Director Sidney Lumet

TUDOR GIURGIU, PRESIDENT OF TIFF

“We’ll open TIFF.22 with an excellent comedy about the fear of flying—Northern Comfort. It is the first English-language film by Icelandic director Hafsteinn Gunnar Sigurðsson, a regular at our festival, who thus also inaugurates Nordic Focus, a large section of this edition that will bring to Cluj over 40 films, concerts, and dinner-concerts from the Nordic countries. From this year's programme, I would also recommend the dinner-concert A bomb was stolen, an event that marks 100 years since the birth of our great Ion Popescu-Gopo. The production is Gopo's feature film debut and was presented in competition at the 1962 Cannes Film Festival. At TIFF, it will be screened both in its original form and with a new soundtrack that was specially created for this event by composer Alexei Turcan and performed live by artists from Cluj-Napoca, members of the Romanian Cinema Orchestra, under the baton of conductor Tiberiu Soare.”

OANA BUJGOI GIURGIU, EXECUTIVE DIRECTOR OF TIFF

“On June 10, the first Saturday of the festival, Icelandic-British artist Jay Jay Johanson will perform at the Banffy Castle in Bontida. His concert will be followed by the screening of a documentary that serves as a history lesson: And the King Said, What a Fantastic Machine (d. Axel Danielson and Maximilien Van Aertryck, Sweden, 2023). An impressive and terrifyingly inventive collage, the film brings two centuries of imagery to the screen, from the first photograph in history to the advent of cinema and the lightning-fast evolution of television, to today's technology, when everyone is a potential content creator. And we should definitely meet again at The Phantom Carriage dinner-concert. It is an original production of the festival, which invited Icelandic artist Barði Jóhannsson to compose and perform together with female post-punk trio Kælan Mikla, a new score for this classic of world cinema. The Phantom Carriage is particularly important in film history due to its artistic innovations and major influence on directors such as Ingmar Bergman and Stanley Kubrick.”

MIHAI CHIRILOV, TIFF ARTISTIC DIRECTOR

“If you’re going to watch just one title from the Sidney Lumet retrospective, go for his terrific masterpiece from the 70s, Network, and check out its prophetic and satirical power that’s still intact 50 years later, especially in these convoluted times driven by crass media manipulation. TV series fans should definitely give five hours of their lives for a binging immersion in the last instalment of Lars von Trier’s trilogy The Kingdom, called Exodus, and its Twin Peaks-like creepy mood. It doesn’t matter if you’re not familiar with the first two seasons of this unique supernatural black comedy set in a hospital possessed by spooky demons and bureaucratic minds. Von Trier perfectly knows how to grab his audience by the throat and mess with everyone’s idea about good and evil coexisting, this time blending in the surreal mix of characters played by the likes of Alexander Skarsgard and Willem Dafoe.”

RDW2023: A creative rendez-vous with the city of Bucharest

The Romanian Design Week (RDW2023) exhibition, happening May 12-28, will showcase a total of 162 architecture, interior design, graphic design, illustration, product design, and fashion design projects. The main event will take place at Amzei Market, accompanied by more than 100 satellite events all over the city. BR tracked down Andrei Bortun, the CEO of The Institute, to get a look behind the scenes.

By Oana Vasiliu

Romanian Design Week has now reached its 11th edition. How has the event changed over the years?

In the beginning, for us and for our partners, the community, and the public, the main focus was on the RDW Exhibition. But starting this year, there will be a significant increase in the number of formats being featured in the festival, each of them bringing a diversification of this project’s objectives, audiences, and sponsorships over the course of the next 10 years. (…) This year we also started creating an archive of best practices, with projects that deserve recognition even if they don’t make it into the exhibition. They are displayed on the Romanian Design Week website and will be included in post-event communications. Through this approach, we aim to encourage studios with small budgets, newcomers, and young designers and promote them even outside the exhibition.

What has changed in terms of the project’s objectives over the years? Is the initial stated mission still valid today?

In the first four years, we mainly focused on bringing different professional guilds with common DNA and objectives to a single stage—both literally and figuratively: product design, fashion design, graphic design, interior design, architecture, and urban planning. The initial goal was to bring an accurate, but also comprehensive definition of what design meant, both as a process and as a result.

In the following three years, we set out to increase the audience of the festival, reaching over 30,000 visitors in 2019. Whereas in these first 7 years, we organised the central exhibition in little-known buildings around the city (Stirbei Palace, Amzei Market, Cobalcescu Garages, the Chamber of Commerce and Industry, the Telephone Palace, etc.), in the last 3, with the “help” of the pandemic, we focused on creating the cultural-creative map of the city, and with the help of Romanian Design Week, we leveraged the infrastructure offered by Combinatul Fondului Plastic, through a project called COMBINAT.

After these three years, COMBINAT has been fully discovered and it has become one of the favourite locations of creative project leaders and their audiences. (…) In short, our objectives are largely the same but more diversified, and the Romanian Design Week mission is actually part of The Institute Organisation's mission.

“Connections” is the theme of this year’s RDW. Who is this concept aimed at? What does it take to be “connected” in this industry?

It is an invitation for anyone who wants a country and society that knows how to strategically use the creative talent of its citizens and the strength of its civil society. We need a country where dialogue and collaboration can become both a priority and an instinctual response. For several years now, your role has

represented an active connection between different stakeholders: designers, companies, institutions. What does the design community need to do to become connected in a functional and continuous manner? What form should this dialogue take, apart from the industry events that happen once a year?

There needs to be a paradigm shift, one that must be accepted not only by the design community but also by businesses or government agencies: cultural and creative scenes and industries should not just be helped; they should become useful. Whether we are talking about economic objectives, country or city branding, talent retention and attraction or increasing the quality of life, these people, organisations, guilds, scenes or industries can all contribute immensely to achieving these objectives (if they exist or appear) through medium- and long-term strategies. (…)

In the end, we are still talking about DESIGN, about projects that should be properly formulated, followed, and constantly improved to generate a better quality of life. It’s not about designers and creatives as individuals, but about the way they can help on these fronts.

What event are you the most excited about at RDW2023?

The closing party: because it will bring together all the people who have been involved, one way or another, in making this Romanian Design Week edition come to life.