Posts Tagged ‘Cheap Credits’

Katie Lomiladze, 29, bought her cell phone for 1300 lari in December last year. She could buy it now for 600 lari.

Georgia, which was briefly shielded from the world financial crisis by the $4.5 billion in donor money it received after last August’s war with Russia, is starting to feel the crunch, and its luxury electronics goods sector is the first to suffer badly.

“We’re having to concentrate on goods that have more demand and are more accessible to our customers in prices,” said Ia Gogoladze, advertising manager of JSC Elit Electronics, a retailer selling home appliances, cellphones and laptops..

The crisis spread from the banking sector to business, said Emzar Jgeneria, an independent finance expert. Banks aren’t lending people money so they aren’t able to buy high-end electronic goods.

Elit Electronics, which has been operating in Georgia for 13 years, missed its sales target last year and expects figures to fall further this year. In 2008, sales revenue was expected to be 360 million lari, but the actual figure due to the current situation was 255 million lari. Company’s sales will decrease by 30% for this year, Gogoladze said.

62-year-old Yura Sarukhanov bought a TV set for 290 Lari two months ago, but now it costs 260 lari. He thinks companies are cutting prices because of the crisis, something Gogoladze denies.

Other problem is decreasing selling of technology. Jgeneria said, it decreasing 80%. According to him, the cause of this problem is people do not have money for buying them. Therefore, demand of people goes down.

Lali Elikashvili, 40 said she bought her washing machine a year ago. She wants to buy refrigerator but she has no money.

Gogoladze said that the demand of people is very low now. Customers now prefer low priced techniques. Therefore, the demand on expensive items has decreased.

Many firms held discounts to increase their sale.

Shavershova Khatuna, 34 bought her computer in discount. It costed 950 lari, but she bought it for 755 lari.

Gogoladze said Elit Electronics concerns discount on every type of products and campaigns will be held in every two weeks. However, expert Jgeneria said discounts do not have big influence during economical crisis. Indeed, people have not money buy them, he said.

Elit Electronics said that, they have not any loss of discounts. Nevertheless, there are some cases the company gains no profit, as campaign products price is the same as the cost of sale, Gogoladze said.

The future of technology consumer market is considered to get down and down. Jgeneria said the selling of computers decreased for five times in the first quarter in 2009 than fourth quarter of 2008.

Jgeneria said that consequently, firms passed to standby regime. Gogoladze also said that they frizzed several important projects. “We had to close 6 stores”, she said.

Jgeneria also said the firms like Elit Electronics, Vestel and Beko stopped their activity in fact. Their sale is zero.

Elit Electronics have plans to avoid from the crisis. Gogoladze said, they make focus on low priced and everyday use items. They bring new products in their stores and plan to increase their sales. They also are preparing for various stimulating campaigns.

Jgeneria said they should change their strategy for real time. Because economical crisis might be, last 2 or 4 years more. For little suffer they should diminish their stores and workers. Another case they can be bankrupt.

Eka Janashia, Head of Public Relations Department of Ministry of Economic Development said that if companies are closed, Government will give them Cheap Credits.

Cheap Credits program started in 2008 and has being existed 2 years. The goal of this program to help businessmen to increase their business. They will not pay for credit in the first two years. After 2 years, they have to pay for credit during 7 years.


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