Electronics firms wise not to follow where GoClever went

Go Clever’s bankruptcy sends a clear signal to other Polish players to tread wisely to compete in the face of cheap Chinese competition.

Polish brands in 2013 controlled up to 20-30 percent of the market of small electronics goods, including mobile phones, GPS devices, tablets etc.

However, the market, which a Polish Investment Agency (PAIH) report in 2016 valued at PLN 37 billion (EUR 9 bn) has been eaten into significantly by cheap Asian imports, according to a report in the “Rzeczpospolita” daily, making the survival of companies which simply rebranded imported products – such as Go-Clever – more difficult.

One of the bugbears of the Polish brands is the increased traffic on Chinese website AliExpress, where domestic consumers get around import tariffs, directly importing cheaper devices by declaring that the goods bought on the site are being purchased as gifts.

On the other hand, shopping centre retailers report that the electronics market is also consolidating, with the best-known international brands taking the largest share of the consumer pie. In terms of smartphone sales, Korean Samsung is the market leader in Poland, followed by Chinese Huawei, with Apple in third place.

The fate of GoClever – which at its peak had a turnover of PLN 200 mln (EUR 46 mln) – is one which other Polish brands do not wish to follow. Other Polish players in the market include the brands Manta, Modecom, and Kruger&Matz.

Branding strongly with iconic Polish sportsmen and sports teams is one way that companies are seeking to become ingrained in the consumer psyche. Manta, which produces a similar range to Go-clever, is a sponsor of the Polish national football team.

Meanwhile, Modecom, having become a partner of the Polish football team has also sponsored gaming, acquiring the title of the Official Sponsor of Poznań Game Arena for the years 2016 and 2017.

Kruger&Matz has also taken a sports theme to heart, with endorsements from Radosław Majdan an ex-Polish goalkeeper, who along with ex-wife Doda, were once called the Polish Beckhams, because of their hegemony of the fashion and media scene. Despite the local branding, Michał Leszek, Marketing Director of the firm founded by his father, Zbigniew Leszek, says in a Deloitte video on how family firms can succeed, that the company has to concentrate on the international market. “Though we are a big brand locally, in international terms we are plankton.”

The English websites of the companies emphasise their Europeanness, rather than their Polishness and show their strong associations with international hardware and software giants like Microsoft and Intel.

The Polish consumer has more money in his pocket in recent years, buoyed by growing average wages and lower unemployment. Rather than increasing sales of cheaper brands, this is leading to up-branding towards international players and so only the strongest Polish brands will survive.