Local firms have learned to coexist and even cooperate with global courier service giants like DHL, which controls 42% of the Slovak market. photo: Spectator archives |
Representatives of the Association of Slovak Forwarding Firms (ZZS) have said that although Slovak couriers do not have the kind of financial weight that big firms carry, especially in promotion through advertising campaigns, they are aware that local firms can still have a place on the market alongside international players.
Statistics on actual market share show that small local businesses indeed come up short when compared to the percentage that well-known international firms gained shortly after opening offices in the country. Results of a survey carried out by Research International and the Czech and Slovak market research firm AISA Slovakia show that in 2000 the DHL courier service was the sector leader with a 42% market share, followed by UPS with 31%, EMS with 10% and TNT with 9%. The remaining 8% is distributed among 'other' express courier firms active in Slovakia, including small local firms.
"It is possible that the smaller and weaker firms will die out as a natural consequence of gradual globalisation," said Pavol Jelenek, ZZS's president. "But the opportunity for small businesses remains. In a remote place in Slovakia, with only one or two bigger companies in the region, a big firm would not build a branch. That's where a small firm can start its business and do quite well."
Jelenek, like many other courier firms' representatives, said that seizing opportunities such as the one described above was a better and more effective strategy to boost numbers of contracts than trying to match bigger firms in areas such as advertising.
For small firms, he said, it was not usual to spend a lot of money on advertising. Instead, Slovak couriers have said they prefer to rely on word of mouth; recommendations to friends from satisfied clients, they say, will generate more new customers than any display ad could ever do.
"We have no funds for massive advertising," said Ondrej Grell, who started his own courier firm, Kurier Express Grell (KEG), in Bratislava back in 1994. "Annually we spend about 70,000 Slovak crowns ($1,400) on direct advertising, and the rest we try to do in a barter form with local papers or radio stations. But we have to rely on good references from our clients and therefore do our best to deliver quality services."
Another medium-sized business owner, František Komora, whose firm PKZ Slovakia concentrates on international bulk shipments, said he used largely the same strategy. Komora explained that his company used to advertise in Slovakia's Yellow Pages and tried to attract more customers by having his company listed in the Európska databanka (European databank, a resource of company contacts which lists firms for a minimum fee of 6,700 crowns ($130) per year on a regional level and up to 39,000 crowns ($ 760) for an internationally accessible listing). Neither strategy, he reported, had brought his firm any increase in clientele.
The only form of advertising his company still uses, he said, was placing ads in highly specialised papers like Transport or Dopravné noviny (Transport News).
"We have learned that the best way to do well and grow on the market is through delivering quality services which suit exactly the needs of the local client," Komora said. "Slovak firms have the advantage of knowing the environment. If there are services that the big firms (like DHL, TNT or UPS) will not do, there's a chance for us to serve the customer and win him or her for our company by giving them a reliable quality service. But any Slovak firm still has to be connected to the international courier network, and to have a working contact relationship with bigger companies. On their own they couldn't deliver quality services." He explained that with international shipping, problems can often arise when goods are shipped abroad and those problems have to be solved outside Slovakia. "You need to have contacts with one of the big firms that will be able to solve the problem in places like Paris or Hamburg."
ZZS's Jelenek added, however, that "although the market is dominated by international giants, there are still enough opportunities for small businesses". He said that unlike big players who tended to treat all clients alike simply because they have plenty of them, small firms, if they won a contract with a company, would generally try to gain customer loyalty by being extremely flexible and responsive to the client's wishes.
KEG's Grell agreed, saying that his firm, which counted a total of 10 Bratislava employees, had already expanded its operation in other Slovak towns such as Žilina and Banská Bystrica and even in the Czech capital Prague. "We are doing something which is not so interesting for the big firms. That's why I'm not too worried about the future of my firm."
