A leading Central and Eastern-European shop fitting company with over 100m EUR annual income: the Modern-Expo Group. The father of its success is Mr. Bogdan Łukasik, an entrepreneur from Lublin, Poland, chairman of the supervisory board of Modern-Expo.
No leading business, not even those now considered exemplary, had it easy at the beginning. Often they would be launched in a garage, with low cash and high risk involved. How was it in your case?
Very much the way you described. My first company was created in a garage. There was no cash but an enormous power for work and creation instead. The company’s development required sacrifice, loads of work and constant learning.
What about funding?
We had no funding and a couple of failures at the beginning, also financial ones. It is a fascinating career path though. With clear objective and vision coupled with hard work and perseverance anything is achievable. Running your own company is to motivate yourself constantly; it is to improve and learn from your mistakes. Then, with time, the larger the company, the bigger the responsibilities: for each and every decision you make and for the people you hire.
Which were the most important stages in Modern-Expo’s development?
After the plant opening in Lutsk (Ukraine) in 2000, we witnessed a great development leap. We took the lead within 2-3 years.. In 2005 we established a branch in Moscow and then in 2009 and 2010 in Berlin and Dubai. In 2013 we opened another production plant in Ukraine. Then we extended further branches in 2015 in Paris and London. In 2016 the third plant was opened in Vitebsk, Belarus. In 2017 we established a joint venture company by merging with Schweitzer on three markets: German, Austrian and Swiss. Schweitzer is a leader in new concepts. We, as a partner, manufacture equipment for them. After a few years of cooperation, at this year’s Euroshop trade fair in Düsseldorf we announced a joint venture company for German-speaking markets. This entails amazing development opportunities for us.
Three factories are already working full steam, but yet another one is in the making: in Lublin, Poland. What is the impact of this investment on the Group’s business?
We are building an R&D center and a European logistics hub there. In the Lublin plant we shall focus on smart solutions, innovation and high-tech products.
Do you foresee any further investments?
Definitely! We do have a lot of investment plans and consider not only acquisitions of important European companies but also a close cooperation with those companies that offer complementary products for the retail segment. We believe that development and success of a company comes via such close cooperation, both with your clients and your partners. A synergy thus created provides us with swift development opportunities. Recently we signed the agreement with R.E.D. (Research Engineering Development), Ukrainian based company, software developer and manufacturer of POS-equipment for business automation. As a result of the deal, Modern-Expo Group added SMART solutions for retail to its assortment – touchscreen POS terminals, back-screen displays, self-checkout counters, PC scales and smart trolleys.
What is Modern-Expo Group’s production and commercial capacity at the moment? How does the sales network look? Are you capable of carrying out orders regardless the sales network location?
The production capacity in terms of surface exceeds 112,000 square meters, excluding the plants that are currently in construction. We employ 2,800 people. We are a holding: the mother company is registered in Amsterdam. We have nine subsidiaries responsible for CIS, Central Europe, Eastern Europe, Western Europe, Middle East and Northern Africa markets. We are ambitious, our premise is that the company must take the lead in every region where we establish its subsidiary. By “taking the lead” I mean to be one of the two-three largest operators. We are already an undisputed leader in Central and Eastern Europe. Now we are competing for the leader’s position in Western Europe. Our company in Dubai, UAE, is also faring very well, serving the entire Middle East and Northern Africa. Our heritage stems from a small trading company, therefore we know exactly the importance of identifying and understanding the needs of our clients. Thisallows us to respond quickly and flexibly to fluctuating market expectations, which translates into e.g. offering additional services. The tremendous in-house production capability we possess only boosts our advantage over the competition. There is no other company in retail in Europe that have the similar characteristics, structure and potential to Modern-Expo.
I assume you aspire to become a global firm?
Most definitely. This is embedded in our vision and objectives. I am responsible for the company’s strategy and development, so I envision our work in the Americas. We are also establishing relationships in Asia. We already operate in 60 countries, but we intend to become one of the largest businesses of the industry–globally.
What assortment groups do you offer in commerce? Which of them are dedicated to large surface chains? Are there products that can be of interest to small convenience stores?
Our principal clients are in the retail segment, i.e. trading firms and operators, as well as FMCG suppliers. We offer comprehensive store solutions: from shelving and checkout all the way to storage racks. We also manufacture all kinds of dispensers and stands for product display. Plus, for three years now we have been manufacturing refrigerating devices, branded fridges for FMCG suppliers included. We specialize mostly in permanent stands: those that are used for long time periods. In terms of store formats, we work with all of them, starting with convenience stores all the way to supermarkets and hipermarkets Among our clients you will find DIY and Cash&Carry chains. In FMCG we work with the largest suppliers and global leaders. I am pleased to mention here that some of them have granted us the “Global Supplier” status, which refers to one of a handful of companies with global production and supply capability.
Intelligent checkout, scanner-equipped trolleys... Did you assume, at the beginning of your store fitting business, that the progress in technology and IT would be so significant in this industry?
Back in my early days computers were much less powerful. I couldn’t imagine the commerce of today, but I did try to make forecasts. I knew it was necessary to follow the trends. But to anticipate them was even better. In wholesale retail interactive communication will soon become a thing. Your cellphone will communicate with a shelf, a trolley and a cash register. New solutions are already emerging, allowing us to do the shopping without passing through checkout: the payment is charged directly against your bank account. Personalization is also on the rise. Dedicated offers are based on the analysis of data combined from online shopping and in-store retail. These tools make the e-commerce vs. traditional commerce division obsolete. Omni-channel is the buzzword of today. It connects both channels that overlap and penetrate each other. At Modern-Expo we are already working on high-end solutions that would actually support manufacturers and stores
What technological novelties has Modern-Expo recently implemented in its commercial offer?
Our products are in constant evolution. More importantly, we keep working on innovations that anticipate and outrun current market offer. The intelligent shelves, for example, help to manage stocks. They can transmit data online directly to the manufacturer, e.g. on what kind of stock is depleted or deficient, or what products are not selling so well. They can also notify the store owner whether a shelf is full or whether the product that was delivered to the store has already made it to its shelf, or not. We also work on a new generation of smart refrigerating devices. The “Green Line” series is based on refrigerants different from traditional ones, such as propane. These devices are capable of heat recovery and fitted with communication features. They are equipped with failure prevention functions to analyze possible errors and send the data to technical support. Another example of innovation is a self-service shopping trolley that can scan the goods inside. This means we work on image recognition, customer tracking and analysis of sales effectiveness of our clients. Our products are supposed to bring them quantifiable benefits. It is a win-win strategy: we offer top-quality, optimized solutions, which in turn generate profits for the client and save their money and time. Our slogan is “European Low-cost Shopfitter”, i.e. what you buy is exactly what you need. To us low cost doesn’t mean cheap. It does mean, however, that we would not offer expensive and unnecessary solutions, but rather those that meet your needs perfectly.