Emerging in Europe, Ukrainian businesses are looking to expand to the west, according to Reuters

by Michael Cahn and Anna Cooper

Prague/Warsaw (Reuters) – After the Russian invasion in 2022, Ukrainian businesses that have established or expanded in Central Europe are shifting their focus from immigrants to local customers, some of whom are now looking to move west.

As the war closed opportunities at home and in the east, including Russia, Ukrainian-owned businesses sprung up in neighboring countries, initially targeting displaced people with food, drink and services.

In war-torn Poland, with a population of over 1.5 million, Ukrainians Polish trade associations and economists will open every tenth new business by 2024.

Andriy Halitski’s Lviv Croissants has 12 stores in Poland since launching there two years ago. It opened its first checkout in October, and the founder says his strategy is to build a geographically diverse business by expanding westward and beyond the diaspora.

“While the Ukrainian immigrant community in Europe is vital, relying solely on this client base is not a sustainable long-term strategy,” Halitsky told Reuters.

Strong cultural similarities with Ukraine make Poland a natural base for Ukrainian businesses. But many are looking beyond Europe’s largest economy to a larger pool of customers.

“Companies initially see Poland as a bridge or to EU markets,” said Dariusz Simchycha, first vice president of the Polish-Ukrainian Chamber of Commerce.

“They want to learn the reality, standards, rules and regulations in the European Union.”

The Piana Vishnia coffee chain is themed around a traditional Ukrainian cherry liqueur, but sees local customers as its main target, founder Andriy Khudo told Reuters.

His !FЕST restaurant group has grown the brand – known in English as Drunken Cherry – to 15 locations in Poland and nine in other Baltic and Eastern European countries, and is ramping up western expansion from February 2022, Khudo said.

The group said it plans to open in Germany, Switzerland and France by 2025 and relaunch in London, saying the bars are attracting new customers and are profitable.

“Before the war, we focused on Ukraine because our business was growing fast there. But the war forced us to look west because of the danger in Ukraine,” he said. Khudo.

The growth of immigrants

Although Ukraine’s economy is growing in 2023 and could expand in 2024, Economy Minister Yulia Sviridenko told Reuters in November that it was still only 78% ahead of Russia’s full-scale invasion in February 2022.

With no end in sight to the conflict, businesses like Kudo have had to look elsewhere – economic changes in neighboring countries, as well as labor market tensions with the arrival of Ukrainian workers.

A March 2024 Deloitte report estimated that immigrants from Ukraine would add up to 1.1 percent of Poland’s GDP in 2023 and up to 1.35 percent in the long term.

“When you come to Poland, for example, to work or set up businesses, this is an additional incentive to improve consumption and labor supply from an economic perspective,” Andrzej Kubisiak, deputy director of the Polish Economic Institute, told Reuters. .

Another Ukrainian restaurateur, Olga Kopilova, told Reuters that she had no plans to take her pre-war Chornomorka brand abroad, but now has three outlets named Chornomorka in Poland and two in Bratislava and Vienna.

Coffee chain Aroma Kava moved to Poland in 2022 and has since grown to 10 locations, Ukrainian ice cream and frozen products maker Three Bears bought Polish company Nordis.

Poland is now the second most important market for digital entertainment provider MEGOGO, which has grown by appealing to locals, especially family programming, co-founder Volodymyr Borovic told Reuters. In 2023, Poland and Romania will join – emerging Europe’s two most populous countries.

“The healthy Polish market not only motivates us, but also encourages other Ukrainian companies to enter this market with products designed for Polish consumers,” he said.

At the newly opened branch of Lviv Krysans in Prague, the staff served a mix of tourists, locals and Ukrainians who were sipping coffee and munching on sandwiches as they took a break from the holiday rush.

“It’s my first time eating here, but it feels like home to me,” said 20-year-old Ukrainian student Tatiana Melnyk.