Beyond Borders: Ukrainian Firms Eye EU Growth Opportunities
Image Credit: Reuters
Ukrainian businesses that relocated or expanded into Central Europe following Russia's 2022 invasion are now shifting their focus from primarily catering to refugees to targeting local customers as they establish themselves. Some are even considering expanding further west.
With opportunities in Ukraine and Russia diminished by the war, Ukrainian entrepreneurs turned to neighboring countries, initially offering food, beverages, and services to their displaced compatriots. In Poland, where the Ukrainian population has grown to over 1.5 million, every tenth new business in 2024 was Ukrainian-owned, according to business groups and economists.
Lviv Croissants, founded by Andrii Halytskyi, now operates 12 locations in Poland since launching there two years ago. In October, it opened its first outlet in the Czech Republic, reflecting a strategy to diversify geographically and expand beyond the Ukrainian diaspora. "While the Ukrainian refugee community in Europe is significant, relying solely on this customer base is not a sustainable long-term strategy," Halytskyi told Reuters.
Poland’s cultural similarities with Ukraine have made it an appealing base for these businesses, but many are now eyeing broader EU markets. "Companies see Poland as a bridge to the European Union, where they can adapt to its standards, regulations, and business practices," said Dariusz Szymczycha, vice president of the Polish-Ukrainian Chamber of Commerce.
The Piana Vyshnia bar chain, known as Drunken Cherry in English, targets local customers despite its focus on Ukraine’s traditional cherry liqueur. Founder Andriy Khudo’s !FЕST restaurant group has expanded the brand to 15 Polish locations and nine in other Baltic and Eastern European countries since 2022. Plans are underway to open locations in Germany, Switzerland, and France by 2025 and to relaunch a venue in London. "The war forced us to look westward due to the risks in Ukraine," Khudo said.
Refugee Impact
Although Ukraine’s economy grew in 2023 and is projected to expand further in 2024, it remains at only 78% of its pre-invasion size, according to Economy Minister Yulia Svyrydenko. With no end to the war in sight, businesses have sought opportunities abroad, benefiting neighboring economies.
A Deloitte report from March 2024 estimated that Ukrainian refugees could boost Poland’s GDP by up to 1.35% in the long term. "Refugees and entrepreneurs bring economic stimulus, increasing consumption and labor supply," said Andrzej Kubisiak, deputy director of the Polish Economic Institute.
Entrepreneurs like Olga Kopylova, who previously had no plans to expand abroad, now operate her Chornomorka restaurant brand in Poland, Bratislava, and Vienna. Aroma Kava, another Ukrainian brand, moved to Poland in 2022 and has since expanded to 10 locations. Ukrainian ice cream maker Three Bears even acquired a Polish company, Nordis.
Digital entertainment provider MEGOGO has also thrived in Poland, its second-largest market, by appealing to local families. "The vibrant Polish market motivates us and encourages other Ukrainian companies to adapt products for Polish consumers," co-founder Volodymyr Borovyk said.
At a new Lviv Croissants outlet in Prague, the mix of tourists, locals, and Ukrainians enjoyed sandwiches and coffee amidst the holiday bustle. "It feels like home," said Tatiana Melnyk, a 20-year-old Ukrainian student dining there for the first time.
Paraphrasing text from "Reuters" all rights reserved by the original author.
