MIG BALTIC becomes a player on the Estonian DIY market
Entering the trade segment at a time when the financial performance of companies in the goods and services market is plummeting due to the effects of the Global Financial Crisis? Conquer the Estonian market in a year when the effects of the global pandemic are taking over, dragging the financial performance of companies in several sectors into negative territory? It may seem incredible, but MIG Baltic is a Latvian success story.
MIG Baltic is a wholesale company of tools and accessories in the DIY segment. Founded in November 2009, the company's name might be thought to be related to the Russian MIG fighter jets, but this is not the case, although the company's dynamic growth rate does suggest some similarities. Moreover, this is confirmed by the timing of the company's founding - in a year when many companies were in dire financial straits, MIG Baltic unerringly looked to the future with optimism and confidence.
It has become known that a cooperation agreement with one of the leading Estonian DIY retailers, the ABC Ehituse chain (Optimera Estonia AS), will be signed in 2020. One of the main sources of opportunity for the geographical expansion of the company is the raising of finance in cooperation with Auctus Capital. The general market trends cannot be excluded, which further strengthen the dynamics of the sector and the ability of the company to expand its activities. Also the fact that the DIY market has not stagnated under Covid, on the contrary it is growing rapidly as the inevitable "work from home" situation requires more care to feel comfortable and at home. Undeniably, more leisure resources have also paid dividends in the ability of this particular sector of the industry to adapt to the overall economic situation. The B2C model provides for an even closer individual approach to consumer satisfaction, which in this case is one of the keys to success in adapting to the overall market situation and the increasing level of demand and, importantly, further contributing to the sector's growth rate.
According to MIG Baltic's financial performance, the investment in the development of its operations by Auctus Capital could double the company's turnover.
Statistics show that DIY is the least affected area of the retail sector in 2020, with sales even increasing despite the Covid-19 restrictions and the decline in the Consumer Confidence Index. Over the last five years, the market for building materials, household goods and tools in Latvia has grown steadily (with turnover increasing by around 11% annually), as shown in the graphs (Figure 1). But what is particularly noteworthy is that MIG Baltic has increased its turnover by around 18% annually against the background of other players in the sector, although the overall turnover growth of the Latvian market players included in the analysis over the three-year period is only marginal, increasing by around 1.25% (Figure 2). MIG Baltic's expected strong growth in 2021 is expected to be driven by expansion in Estonia and Lithuania, as well as a planned more aggressive strategy in its home market. In the coming years, the company plans to strengthen its position in the entire Baltic market. The wholesale growth forecast is based on cooperation with large retail chains.
Turnover of the top Latvian DIY retail chains (EUR million)
