Uniquely me-too

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Editor, news2biz LATVIA

All comments by Didzis Veinbergs

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Just like any small nation, Latvians believe themselves to be quite unique. For one, there is a widespread belief that our recession obviously is the worst in Europe.  And the causes for our recession are unique, too – thanks to our unique history, we were so much more naïve. We just had never experienced such amazing growth, you see, so we got a bit carried away. That is so us.

Well, for a nation that is so unique, Latvia has an amazing amount of copycats. It goes like this. Somebody sees a great business idea abroad and decides to bring it to Latvia. The idea takes off and, since Latvia is a small country, soon becomes extremely fashionable. The inventive businessman (for business owners in Latvia almost always are men) makes a neat pile of cash, buys himself a new BMW and is universally hailed as the great Latvian success story.

But he is not the only one who wants money, fame and pricey cars. No matter how unique they are, other Latvians want the very same things. And, if that guy could have it all with that simple idea – why, then they can have it, too. All they have to do is to the very same thing.
And indeed they do. Consider one Latvian success story, soap makers Stendera ziepju fabrika (Stenders' Soap Factory). Created by a couple who saw handmade soap abroad, the company soon became wildly popular. Its handmade soap was just the right present for any birthday or Christmas. Its outlets popped up all over Riga. It turned to exports long before it was fashionable. Indeed, a true success story.

Of course, before long, other wannabe success stories jumped right in. Sporting such unbelievably original names as Riga Soap Manufacture or Good Soap Workshop, they all offered the very same things – soap, bubble balls and body scrubs. After all, Stenders' success had clearly showed that Latvians just cannot get enough of handmade toiletries. Only it turned out that they actually could – the good soap manufacturers never came close to Stenders' success.

Or how about the recent bakery boom? Figuring that hot cupcakes will always sell like, well, hot cupcakes, dozens of new bakeries have been opening all over Riga – often almost next door to each other. Few of them are somewhat inventive – for example, a real French pâtisserie run by a real Frenchman or a bakery specialising on muffins. But most of them offer the same standard Latvian fare and, while you could argue which one has the best coffee or cottage cheese cakes, you would have to agree that they are exceedingly similar.

And dare I mention the mother of all Latvian booms – the real estate/banking bubble? It promised bigger – and faster – bucks than any bakery ever could, and it was so simple. Just buy some real estate and sell it at a profit later. After all, the prices were always going up and many people had already made lots of money on real estate. There is little need to elaborate just how founded that belief was – and where it has left the Latvian economy.

But surely we have learned our lesson, right? Surely, from now on, we will focus on sustainability and long-term growth – or whatever the latest buzzwords may be. Well, as the readers of news2biz LATVIA already know, there is a new bubble blowing up right now – collective buying.

The idea is so simple: offer highly discounted offers to a huge group of happy buyers and make some neat commission. Everybody wins: the discount providers receive many new clients, clients can try something new and, well, the innovative businessmen get their fame, money and BMWs.

Except that they do not. Even the market leaders admit that the whole operation loses more money than it makes. The market is kept hyped up by copious amounts of advertising and the hope that somebody else will chicken out first – leaving the market for the last man standing.

So, no, we have not really learned much. And we are not that unique, either. We still get hyperactive when we see a very lucrative business – and then ruin it by blowing it way out of proportion.

But it might not be such a bad thing, after all. For one, Latvian customers have more choices – even if it is choosing between apples and apples. For other, the Latvian entrepreneurs – seeing that the market is just too small for everybody who wants a piece of it – may turn more and more to other markets, boosting Latvian exports. And, finally, the very fact that there are so many entrepreneurial Latvians is good news for the Latvian economy. Sure, they might blow it a few times, trying to jump the latest bandwagon. But hopefully, they will keep trying – and eventually write their own unique success story