Serbia becoming one of the most attractive markets for luxury in Eastern Europe
SERBIA, a small Balkan state, for some just former Yugoslavia located in Eastern Europe is slowly becoming one of the most successful economies in the entire Central and Eastern European region. Its rather negative image in the West is fueled by political issues such as EU membership and the recognition of Kosovo as an independent state by the majority of EU countries and the U.S. Yet, Serbias friends in the EU such as Romania which is among the five countries not recognizing Kosovo as an independent state have increased their commercial exchanges by at least 50% in the past 2 years. This week, the Serbiaan has been visiting another close friend Egypt, another strong economic partner. Last but not leas, mention should be made about the exceptional relationship both political and economic Serbia shares with Russia and the former Soviet states.
All economic indicators stand proof for the health of the Serbia economy, inflation is down 2% from same period last year and GDP is growing by 3%. Even the real estate, which is the black sheep of all Eastern European economies seems to be least affected by the crisis. Office and residential developments are still in progress, the only factor which seems to have been affected is price, which is today lower by 20% (residential and retail rentals). Unemployment is down 20% from last year. FIAT began production of Punto at the end of March 2009 and JAT Airlines has increased number of international flights, adding Abu Dhabi and Tripoli as new destinations direct from Belgrade. IKEA is set to open its first store in Belgrade as early as 2011, having already found a local franchisee.
As a capital city that traces back its origins 7000 years ago, Belgrade impresses with : its street cafes (reminder of those in Paris), its gourmet restaurants, its beautifully maintained parks and its exceptional restored downtown buildings. It is a very lively city, with streets bustling with busy people. Youngsters all bear a 100% Western look, while women impress with their latest trends in their outfits.
As in many other parts of Eastern Europe, the local Holiday Inn is one of the best five star hotels in the city and Grand Hyatt Regency is a true deluxe hotel. Kempinski and Crowne Plaza hotels are set to open as early as 2011.
Hugo Boss, Escada, Max Mara, Marella, Tommy Hilfiger, Paul & Shark, Cesare Paciotti, Bally are among the few monobrand franchises, most of the luxury retail being multibrand. As an indicator of the potential of the Serbian luxury fashion market, mention should be made that Hugo Boss turnover for one store in Belgrade is double the turnover of Zegna, the most successful fashion brand on the Romanian market (both brands entered the 2 markets over 10 years ago)
The three main hight street multibrands carry the latest collections of Gucci, Armani Jeans, Kiton, D&g, Etro, Valentino, Ellie Saab, Blumarine, each brand with a good representation of the collection.
Of its 2 million population, Belgrade host 5.000 wealthy Serbians who have assets of over EUR 30 mil. each and who spend at least EUR 100.000 per year on luxury brands. The profile of the Serbian luxury consumer is very similar to the Romanian, Bulgarian and Ukrainean. The high affinity for luxury brands emerges from the vibrant social life which commands a Latin lifestyle. Serbians enjoy showing off, dressing up and impressing. Made in Italy and Made in France are almost rules for the products they buy. A large majority still buy abroad especially due to the low penetration of luxury brands and the taxation of luxury goods. We have also notice a balance between the male and female consumers, males being especially groomed, many working out regularly, which is unusual for the rest of Eastern Europe. Belgrade is also the regions central shopping spot for all wealthy people in neighbouring Bosnia Herzegovina, Montenegro, Macedonia, Croatia.
Its non -EU status seems to have helped Serbia so far and politically, the country is well connected to some key world economies. Corruption has dwindelled and attracting foreign investors seems to be the current governments top priority.
CPP has conducted a thorough market research to reveal the potential of its luxury segment. Details are available on request, email@example.com