Ukrainian service, food, and alcohol conquer European markets

What is the problem?

In 2022, Ukraine's economy suffered the most significant losses, damages, and destruction in the entire history of independence due to the military aggression of the Russian Federation. As noted by Ukraine's Prime Minister Denys Shmyhal, according to preliminary estimates, the drop is more than 30% for 2022.

"A third of our economy has disappeared," the prime minister stated.

What is the solution?

Despite all the challenges and the crisis, Ukrainian businesses turned out to be highly resilient. During the discussion organized by the Center for Economic Strategy, the deputy economy minister of Ukraine, Oleksii Sobolev, cited optimistic statistics on the recovery of Ukrainian business. If in 2022, after the start of a full-scale invasion, about 50% of businesses stopped their work, as of April 2023, almost 80% have recovered. In a year of the full-scale war, Ukrainians opened 50,000 new enterprises. During 2023, 76% of entrepreneurs plan to expand their businesses, and some big players are even finding opportunities to scale internationally.

Over the past year, the world has become convinced that Ukraine and Ukrainians are not about despair. They are about courage, perseverance, hard work, and faith in the future. Rubryka has collected the stories of Ukrainian businesses that found their way to the world markets during the war and continue to grow, showing that Ukraine is a country of practical solutions and development.

How does it work?

In 2022, 14.5 million Ukrainians left Ukraine. Most of them have returned, but as of the end of 2022, there are still between five and seven million Ukrainians abroad. According to the government's forecasts, this situation will not change until the end of the war. Many Ukrainians may stay abroad for another year and a half even after the victory.

The large Ukrainian diasporas formed due to the war became a catalyst for Ukrainian businesses to expand their activities outside of Ukraine. A survey by the European Business Association showed:

• 30% of representatives of small and medium-sized businesses plan to export goods or services abroad;
• 29% already work in the markets of other countries.

Poland became one of the first countries where Ukrainian businesses began to expand because it is the closest to Ukraine. The country received the most significant number of Ukrainians fleeing the war.

The first bakery of the Lviv Croissants chain was opened in Lviv in 2015. Now it has 141 establishments in eight Ukrainian cities. It is not surprising that for Ukrainians to continue to enjoy their favorite pastries even in evacuation, Lviv Croissants decided to conquer the European market and started with Poland.

In 2018, the company already had a negative experience of opening a bakery in Poland. According to founder Andrii Halytskyi, the company was not fully ready to enter the international market and made some mistakes at that time.

"Now we are entering the Polish market with a completely different approach: with a formed team, improved business standards, adapted menu, and price policy, and an understanding of the market's peculiarities," the founder shares about the enterprise's second attempt. "We are clearly aware that there are still quite a few challenges ahead, but we have the resources for effective work and development of the Polish network branch."

The first cafe was opened in the Polish border town of Zgożelec, then two more in Wroclaw, and another two in the capital of Poland, Warsaw. The assortment did not change, but the filling of some croissants was adapted to the Polish market. It took the team three months to adjust the menu:

"It's no secret that Polish products taste different from Ukrainian products. The team did everything possible to make the stuffed croissant in Poland taste similar to the Ukrainian one or even better," Halytskyi comments.

Five establishments are not the final result. The network founder notes the goal is to become a favorite meeting place with a cozy Lviv atmosphere in Poland. The chain plans to open its establishments in Gdańsk and Gdynia.

Olha Kopylova, a Ukrainian restaurateur, the owner of the Chornomorka chain, says that before the war, she had no plans to open a restaurant abroad. In the pre-war year, Chornomorka's business in Ukraine grew by 100%: more than 40 fish restaurants of the chain welcomed visitors. The plans for 2022 were no less grandiose: in the first half of the year, they planned to open 26 more spots.

The war forced business to scale up in Europe. This path turned out to be complicated: in the Romanian city of Constanta, Chornomorka managed to work for only half a year. As Kopylova admits, the mistake was that they opened the same project as in Ukraine, but the people in Romania are different. Although they love eating fish, they prefer other recipes. However, the experience was very valuable, and an understanding emerged that you must adapt each project to the country.

Therefore, the entrepreneur opened establishments adjusted for Poland, with the local name Czarnomorka. On December 9, the first restaurant of the chain opened in Warsaw. The Polish menu is similar to the Ukrainian one but slightly adapted for Poles. For example, a traditional Polish soup żurek appeared on the menu. There is a showcase where the visitors can choose fresh fish or seafood and take it away. Everything is weighed for the guest at once or prepared on the spot.

"We adhere to a single concept: fish and seafood. The menu in different cities does not differ significantly. But in each country, we add local dishes because we have to respect the culture of these countries. I believe that our secret to success is quick payback, a simple and clear concept for the consumer," says Kopylova.

In 2023, the restaurateur decided to concentrate on Poland, Bulgaria, Moldova, the Czech Republic, and Slovakia. As of April 2023, the owner of Chornomorka has already opened five restaurants in Poland and Moldova.

The geography of Piana Vyshnia already includes five countries. The most popular Lviv tincture is spreading worldwide and conquering new heights.

The war did not hinder the successful expansion of Piana Vyshnia abroad, which began five years ago. In December 2022, the Ukrainian holding !Fest opened new Piana Vyshnia bars in Krakow, Poland, and Riga, the capital of Latvia. Previously, bars of the chain appeared in Warsaw, Gdansk, Wroclaw, Łódź, Poznań (Poland), as well as in Chisinau (Moldova), Budapest (Hungary), Bucharest, and Brasov (Romania).

"This year, despite the difficult times for the economy, we opened 11 franchise establishments, most of them in the European Union, and we do not plan to stop," says Andriy Hudo, co-owner of the holding.

The concept of bars abroad is the same as establishments opened in Ukraine with only cherry tincture being served there.

By 2022, Nova Poshta had 1,809 branches in cities with a population of over a million and regional centers, and another 8,166 partner branches worked in settlements. Due to the occupation and hostilities on the territory of Ukraine, Nova Poshta lost many infrastructure facilities, among which:

• six destroyed sorting terminals;
• three robbed terminals;
• 25 completely destroyed departments;
• more than 80 damaged branches and 37 post machines.

Despite the war, the company continues to develop. During the full-scale war, it began to expand its business in Europe actively. The company planned to entry to the international market even before the war. After the start of the full-scale war on February 24, 2022, this direction became not only desirable but very relevant — relatives and loved ones of people who were evacuating abroad with one bag or a backpack were looking for any opportunity to send them the necessary things.

In the spring of 2022, the company established cooperation with local postal operators and launched a new service — Things from home abroad. It enabled sending a suitcase or a box of personal belongings to one of 24 European countries with 50% to 80% discounts. In October 2022, Nova Post opened its first branch in the Polish capital, Warsaw. Krakow, Poznań, Gdansk, Wrocław, Lublin, Rzeszów, Łódź, and Katowice followed, making it 19 branches in total. The company says that by the end of June, there will be 50 Nova Poshta branches in Poland, i.e., in every voivodeship [province — ed.].

On March 20, 2023, the first freight department appeared in Vilnius. Lithuania became the second European country after Poland where Ukrainians and residents can use the company's services. It is about to open in Estonia, Latvia, Romania, Germany, and the Czech Republic.

"Now abroad, we are creating a completely new business, the main goal of which is to connect Ukraine with Europe. The branches are created specifically for sending documents, parcels, and cargo to Ukraine. That is why European markets are a blue ocean for Nova Post. The second stage of development will be deliveries within Europe," says Volodymyr Popereshniuk, co-founder of the company.

So far, foreign branches are not profitable for the company. However, Nova Poshta hopes to become self-sufficient as soon as possible. They set a year for one country to break even as a plan. Popereshniuk adds that the company makes very smart investments. For example, all the furniture and equipment in Nova Post branches are produced in Ukraine.

Nova Poshta also plans to develop a cargo airline, Supernova Airlines. In the spring, the logistics operator will start operating the first flights to the EU. For this purpose, the airline leased two AN-26 aircraft. In wartime, the fleet will be based at one of the EU airports near Ukraine's border, and from there, the cargo will be delivered to Ukraine by road transport.

Monobank has also entered the Polish market — Oleh Horokhovskyi, the bank's co-founder, wrote on his Facebook page. Stereo by mono is the name of the new Polish project.

"We want to give Ukrainians what they lack so much in Europe: communication in Ukrainian, remote registration through the e-governance Diia app, convenient money transfers between cards, direct, convenient payment for various services in Poland and Ukraine (mobile phone, parking, etc.), as well as free transfers to Ukraine," the co-founder of the bank shares his plans.

You will need a PESEL, a Polish population registration system record number, to sign up. To top up your card, you can use IBOX terminals. They have already started to appear in Poland's shopping centers.

The bank primarily counts on Ukrainians living in Poland, but they will also be thrilled to get Polish customers. Horokhovskyi is confident that the company will be able to surprise the Poles with the Ukrainian level of banking service.

In the fall of 2022, the Rozetka online store company announced it was starting to deliver orders to Poland. In March 2023, Rozetka launched its online equipment and clothing store on the Polish market.

"We have experience in online sales, we have an IT product, and we hope to do something not only in Ukraine," says Vladyslav Chechotkin, the company co-founder.

He notes that the company is counting on Ukrainians (about 2.3 million live in Poland) and the local audience. The range of the retailer already includes such categories as household appliances, electronics, clothes and shoes, children's goods, pet goods, household goods, tools, and others. The company notes that the selection and number of products on the site is rapidly increasing. One can pay for an order on rozetka.pl by card online or upon receipt. Delivery is carried out in two ways — to post offices or by courier.

In addition to opening a store in the Polish market, the company is also looking for employees. However, Rozetka does not risk creating a marketplace yet: Poland has its own e-commerce giant — Allegro.pl, visited by more than 60% of local users.

Even more useful solutions!

Today, the Odesa online restaurant Smilefood, the chain of fish stores Forellis, the security company Sheriff and others are preparing to launch a franchise in the EU. Opening a Ukrainian business abroad helps to show Ukrainians as resourceful and persistent people and takes their country to a new level. Hopefully, for each of the listed companies, the decision on European expansion will turn out to be the right one.

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