Apostolos Kaisidis is thankful that in 2008, after nearly half a century dealing in cars, his family firm moved out of Thessaloniki, Greece’s second-largest city, to a cheaper place 50km away, and started repairing vehicles as well as selling them. If it hadn’t, “we would probably be bankrupt now,” he says. In crisis-ridden Greece, companies have had to adapt to survive.
Only about 50,000 new cars are expected to be bought in Greece this year, down from 220,000 in 2009, partly because loans are scarce. But with more ageing bangers on the roads, the repairs side of his business has been busy.
Since April 2008 the number of businesses registered with IKA, Greece’s biggest social-security fund, has dropped by 119,000, or 38%. In such a brutal climate, businesses have had to do much more than just tighten their belts.
Relocating is one popular survival strategy. Whereas Mr Kaisidis has moved his firm out to the sticks to cut costs, Anna Maria Mazaraki, the owner of nine jewellery shops in Athens, is taking advantage of weak commercial rents and moving some stores to more upmarket sites. That ensures higher footfall and gives customers the impression she must be doing well, she says.
Others are moving their headquarters—but not necessarily their operations—out of Greece, to get access to cheaper funding. Last year Fage, the country’s leading purveyor of yogurt, and Coca-Cola Hellenic, the world’s second-largest bottler of Coke, moved to Luxembourg and Switzerland respectively. Now Viohalco, the country’s biggest metals processor, is being acquired by its Belgian subsidiary.
Considering that they come from a nation of seafarers, Greek business folk can be rather inward-looking when marketing their wares. But the dire state of the domestic economy is prompting some of them to seek new customers abroad. Dodoni, a dairy company, is setting up ice-cream outlets in Russia and Ukraine, to add to its portfolio in Bulgaria and Cyprus. Korres, a cosmetics firm, is developing its presence in Germany, France, Russia and Scandinavia. World Excellent Products, set up in 2011 by five young Greeks, exports premium-quality olive oil to 20 countries. Although Greece produces about one-tenth of the world’s olive oil, much of its output is exported in bulk to Italy, where it is bottled, branded and sold at a markup.
Despite such efforts, Greek exports as a share of GDP are still just over half of the euro-zone average. If petroleum products are excluded, goods exports are still lower than in 2008. A survey of Greek sales managers, by Athens University of Economics and Business, found that only 26% of them saw exporting as an important strategic response to the crisis. Their priorities were seeking new domestic markets and making more use of the internet.
At least they were right about the last bit. Digilex, founded in 2011 in Athens, designs websites, e-commerce systems and mobile apps to retailers looking to cut costs and expand their reach. One of its creations is Snatch.gr, an online platform selling a range of cheap of products, either sourced from companies going into liquidation, or imported from China. The biggest challenge is bureaucracy, says Digilex’s co-founder, Alex Ehrmann: it took four months to set up the company.
Taxibeat, a cab-hailing mobile app started in 2010, has expanded to various European cities as well as Rio de Janeiro, São Paulo and Mexico City. Globo, whose mobile apps let employees use their own devices for work, has divested part of its Greek business to focus on international clients. It has been the best performer on London’s FTSE AIM Index this year.
Perhaps Greece’s most visible business trend is the proliferation of bakeries, frozen-yogurt shops, cafés, and souvlaki stalls. Many have been set up by professionals who, having lost their cushy jobs, invested their savings and redundancy pay-offs in starting a new venture. This boom in entrepreneurial spirit may be the silver lining to the big, dark economic cloud that still hangs over Greece.
