ELIO: the company's path to the global market
Over the past year, we have heard many stories about strength and indomitability, about strength and devotion as the main traits associated with Ukraine. More often than not, these stories are personal, tied to specific people, their battles, aspirations and victories, no matter what they were. And each such loud and recognizable story is like a piece of the puzzle of our collective identity. However, inspiring stories can also be different: told by entire companies. Such that they kept all their employees down to one, they did not waver in their own, even before the war, intentions to grow, talk about themselves and be present not only in Ukraine, but also abroad. For whom the upheavals of the war eventually became the trigger for development. ELIO will be the first such company in our new series of materials.
ELIO is a Ukrainian manufacturer of premium-segment furniture that conquered the market not only with quality, but also with the unique ratio of the company's scale and the flexibility it offers in product customization in this niche. The business card of the company is the so-called platform approach. This know-how, which is the basis of ELIO production, allows customers to choose product models, their textures, colors, etc. from the catalog provided by the company and to adapt the selected objects to their own request in terms of dimensions and shapes.
Such unprecedented flexibility was bound to find its own audience of connoisseurs — and it did. Founded back in 1995, the ELIO company has steadily grown, working on quality, polishing philosophy, searching for and perfecting its own recognizable "handwriting". Year after year, it presented new collections, developed and integrated new technological know-how into production, so it is not surprising that at some point there was talk of expanding to the foreign market.
These plans did not emerge at the same time as a full-scale invasion: the company's management nurtured and gradually implemented them well before 2022.
We spoke with Volodymyr Korostylev, the head of the commercial department, about what started ELIO's expansion, how it took place, and how the full-scale war in Ukraine affected its pace and specificity.
PRAGMATICS.MEDIA: At the start of a full scale war in ELIO HOME have been actively building and implementing plans for expanding the presence of the brand on the international market for several years. What was the ratio of your activity in Ukraine and outside its borders as of February 23, 2022?
Volodymyr Korostylov: The first foreign project was implemented back in 2015 in Munich, but the active stage of work abroad began after our participation in LivingKitchen'17 in Cologne. We received direct feedback from architects and designers, distributors and developers who expected an already developed line of standardized products, not just conceptual models and a design approach, so we went to do our "homework" in preparation for iSaloni in 2018. Already at the exhibition in We came to Milan with the newly created ELIO HOME brand, because we decided to move to the Western market with the product line and build a dealer network.
"As of February 23, the ratio of sales "in Ukraine/abroad" reached a proportion of almost 50/50" —
As of February 23, the ratio of sales "in Ukraine/abroad" reached a ratio of almost 50/50. Since the full-scale invasion, export orders are 90%. Among our customers in Ukraine, only 1-2 out of 10 continue construction, and even they "pause" depending on the intensity of shelling and the activity of hostilities.
P.M.: At the time of a more active transition to the foreign market, what was the company's base? How many employees already worked in this segment? Has this segment "grown" since the transition, and if so, by how much?
VC.: Here, as in the matter of income, the ratio of the sales team was about 50/50, but the managers who worked purely with the local market had to quickly reorient during 2022 and find design bureaus and projects abroad. After February 24, as soon as it became possible to work remotely from different parts of Western Ukraine and the nearest foreign country, the team began to actively study English, since it is the basis of quality communication with clients and contractors - both by video link and locally at the facilities.
"We consider the preservation of the company's full team of 210 people to be the main achievement" — V. Korostylov
We consider the preservation of the company's full team of 210 people to be our main achievement. We managed to send the first order abroad already on March 30, and we resumed the full-fledged work of the company from April 19, 2022.
P.M.: In which countries is the company's activity most concentrated?
VC.: Currently, the main destinations are the USA, France, Spain, Germany, Hungary and other European countries, we are actively working on projects in Dubai and studying the specifics of the UK market. It is important for us to choose those markets where there is a high purchasing power, sufficient market volume and where the audience's need for complex projects with a customized product is tracked.
Most orders are implemented with design bureaus and developers who already have experience in local markets and are looking for better (and sometimes exclusive) options for implementing their ideas.
P.M.: Who works abroad? Are these Ukrainian employees who moved before the war and after the invasion, or are they separately recruited "local" personnel?
VC.: Some of these are our employees: project girls, as well as installers who have already been to facilities abroad or had the opportunity to leave later. But still, we are forced to turn to local specialists who already know the market and the rules of the game. It is good when these are our decent emigrants who have been abroad for many years. Some contacts have already been verified, but in each new country we search on the recommendations of acquaintances and in fact find them very quickly - this is the reverse positive side of the emigration of our citizens.
"Working abroad, we regularly ask for cooperation from local specialists who already know the market and the rules of the game" — V. Korostylov
P.M.: Did you somehow have to adapt existing work principles to the international market? How is the request of an audience abroad different, and is it different at all?
VC.: It is very important to be systematic and professional, to maintain quality at the level of high standards, and also to keep your word, especially when it comes to production and performance deadlines. The service is very important, in particular the promptness of communication when making any changes to the project or adapting the product to the defined individual needs of the client, etc.
One of the key components of a successful project is the management itself at each stage, fixing all changes and following agreements. Equally important is cooperation with other contractors on the site.
These are the foundations for building any long-term relationships on the market and, as a result, the company's reputation. And then "remediation" will work for you.
P.M.: Were there any organizational mistakes you made when "entering new territory" at the first stages of expansion abroad?
VC.: Rather, this question is about a purely evolutionary experience that cannot be predicted in advance. For example, negotiations are held with potential partners from different countries at exhibitions, and despite any promises and prospects, it is worth independently analyzing the level of work of such a partner in the local market, checking to what extent your business approaches, principles and values coincide.
It is not news that there are also specifics of each market that must be understood "on the shore". For example, in France, the English language is very strict, so it is ideal to prepare informational materials in French in advance. Or, at the very least, get a reliable bilingual partner who will fall in love with your product and be interested in promoting it. The French are quite emotional, so they can forgive certain mistakes if the product is really high-quality, unlike the pragmatic and systematic Germans.
"For the Germans, one of the key aspects is compliance with the specified deadlines: any violation causes a blow to the reputation and prospects" —
In Germany, dealers are used to working only through professional software, and this forced us to take a step back and prepare properly in terms of tools for the job. For the Germans, one of the key aspects is compliance with the specified deadlines: any violation causes a blow to reputation and prospects. The quality requirements of the product have an undeniably high standard, it is already built into the DNA. By the way, Germans are very fond of oak, probably even more than Italians are of walnut.
At the initial stage, it is extremely important to voice all requirements to each other, reach agreements and record them in writing: then it will save in crisis situations, if you do your part in a disciplined manner.
P.M.: If we consider the nuances of working with local contractors abroad on specific examples, what are the most significant and demonstrative implemented projects that you can recall over the last year?
VC.: We are currently finishing a large private project in Dubai, the implementation of which has been going on for almost a year. In addition to the typical difficulties with constant changes to the project and products "on the go", in this order it was especially difficult to connect and "intertwine" our products with other contracting organizations.
Lighting, ventilation and security sensors were to be integrated into the ceiling rail panels. At the same time, it was necessary to preserve the visual transition of the veneer texture, taking into account inspection hatches and sensor plugs in the necessary places. This, assuming any manufacturing or installation error, leads to serious problems. One of the realized "know-hows" is a continuous continuous veneer texture on the 8-meter long ceiling. Our new SEGMENTAL modular panel system with integrated ELDOOR doors was installed abroad for the first time.
A great advantage in the implementation process and quite an insurance factor for us was the availability of a new measuring device, which makes it possible to take pictures of the room and then conduct a 3D tour at the time of measurement. This device has a measurement accuracy of 2 mm per 10 meters. Its active use has saved us in many conflict situations and ensured the production of products with perfect compliance with the agreed dimensions, without cutting almost any parts in place.
"In every country there is a certain specificity of the market, which must be understood "on the shore" - V. Korostylov
P.M.: How simple is it currently to open and conduct business in other countries from a legal point of view? Have you experienced any mistakes that are easy to make when expanding a premium brand into a foreign market?
VC.: Opening a representative office is quite expensive, especially in the current conditions. We have several partnerships in Europe and the USA. Also, a company has already been established in the USA to facilitate negotiations and conclusion of contracts with local customers.
After our Victory, we are planning an active expansion, taking into account the experience gained in the past years. Here the main rule is not to jump over two steps. First, it is better to analyze the market and tread the path, and only later to more thoroughly develop a strategy, perform "homework" on the systematization of processes, prepare a knowledge base, train people. The stronger the foundation and the better the preparation, the easier it is to grow and scale later, without multiplying old mistakes, and at the same time, without spending time on their correction.
«First, it is better to analyze the market and tread the path, and only later to more thoroughly develop a strategy, perform "homework" on the systematization of processes, prepare a knowledge base» — V. Korostylov
P.M.: What are the future plans of the company? Has ELIO HOME Are there any new developments or initiatives up your sleeve that you envision for the company's future growth and future success?
VC.: We follow trends and new technologies very closely. Our strength lies in customization, complexity, and manufacturability, which is why all products are developed with these principles in mind. Competing with the world's best brands, we strive to surpass them in terms of the quality and uniqueness of our proprietary know-how. But we still have a long way to go to presence and recognition in the whole world.
With regard to expansion, if we look at the long term, we aim to expand the network of dealer showrooms abroad, at least we aspire to be represented in the cities of the G20 countries. The next important step is to participate again in Milan's iSaloni exhibition in 2024. We already have fresh preliminary arrangements with the organizers of the current exhibition just held. So we will keep you informed.