|
|
A Special International Report Prepared byThe Washington Times Advertising Department
Published on May 28, 1999
[Home Page]
Advertisers (1) Associated Banks
|
|
The pleasure of shopping
"Andorra is an international shopping center, which imports products from all over the world. Because of the country's privileged fiscal regime, merchants can offer a great variety of high-quality products at competitive prices," Jordi Marquet, President of the Andorran Chamber of Commerce, Industry and Services, said. Andorra's imports form a large part of the country's economy: they amount to more that 160 billion pesetas ($1.07 billion). The sources are the European Union (86.5%), chiefly Spain (40.1%) and France (29.2%). The main supplier outside the EU is the United States (4.8)%. The tiny principality has over 4,800 shops -some of them over 100 years old. Nevertheless in recent years department stores, shopping centers and bazaars supplying a wide range of products have increasingly taken over the market share traditionally held by the small stores that still prevail in the principality. "Andorra's commercial offering is one of Europe's most varied," Christian Perez, Vice-president of Pyrenees, the country's leading department store, said. Andorra's commercial sector has evolved as a result of historical influences like the years of Franco's dictatorship in Spain, when customs were permissive and the flow of Spanish tourists looking for novelty products made commerce flourish and expand, becoming the focus of the country's economy. Spain's entry to the European Union (EU) in 1986, however, brought to light the sector's vulnerability -in Europe and elsewhere, competition increased as a result of lower prices and broader availability of products. "During the nineties we have seen a substantial, even transcendental change in the business environment for the commercial sector," Marquet said. "World economic development and above all growing change in the competition offered by the EU, has reduced the traditionally positive effect of our positioning with respect to our neighbors Spain and France."
Representatives of the commercial sector insist that in specific cases, selling prices are still lower than in neighboring countries. Pyrenees General Manager Pedro Monzo said that products offered in the group's department store are up to a 47% less expensive than in Spain, although the average is 26% -this is the result of a recent study comparing 100 products, from perfumes, clothes and electronics to foodstuffs and beverages. They also said Andorra's best advantage over its neighbors is not only in its price but also in its offering. The supply of products often not available in bordering countries is one of its most competitive qualities -as with Viagra, which was available in Andorra long before being approved in France or Spain. "Andorra was born of commerce and lives by commerce. It is a nation of merchants," Perez said. "Some believe that as the differential between our prices and others" decreases, we will cease to be competitive. But people don't just come to ski, they come shopping." He explained that the country needs commerce to complement its banking and tourism sectors. Commerce may be no longer the principal driving force behind the country's economy, but it continues to be important, employing 22.5% of the country's labor force, contributing to state finances by import taxes, and playing an essential part in the country's attraction to tourists. "Andorra offers the tourist the best shopping experience anywhere," Marquet said. Aware of future challenges, since 1994 the Chamber of Commerce has been endeavoring to further develop the sector, giving Andorra's commerce individuality and high quality. "The future of the sector is in specialization, though it has been tending this way for years and now the majority of shops, formerly bazaars selling everything, have become more focussed in their product ranges," Marquet said. He explained that foodstuffs, jewelry, couture, sporting goods, perfumes and electronics are the most competitive sectors, stressing that the legal framework must also be improved by imposing conditions on the opening of new shops, defining taxation on the sector and regularizing leases.
Self-made successes
The international expansion of Andimesa started in 1995, with the opening of Gala's chain in the best and newest commercial centers of Spain -at present they have 20 points of sale for their selective perfumery. The expansion was a result of Gala's success in Andorra and the desire of its holding company to grow. "As Europe further integrates it is important to have a presence in a EU member country," Palmitjavila said. He said they chose Spain because the country is lagging behind in terms of current European perfumery trends. While perfume consumption in France is valued at 800 billion pesetas ($5.3 billion), in Spain is 220 billion ($1.5 billion). "We have started a perfume revolution in Spain," he added. The success of Pyrenees, the country's leading enterprise, relies on similar strengths. "We are a large family company in a small country," the company's Vice-president Christian Perez said. "The same passion that drove the family members to start the company back in 1939, still prevails about seven decades later." Today, the group provides employment for 1,200 people and generates 15% of the country's GDP Ðup until recently, Pyrenees contributed more to Social Security than the Andorran government. General Manager, Pedro Monzo, said the company has been a pioneer in applying more sophisticated management techniques in Andorra's commercial sector, without sacrificing the human dimension. "That is the essence of our business."
Developing with the economy
But merchants worry that economic diversification will be done at the expense of their sector. "The diversification of the Andorra's economy is being forced, not at the people's will. It is necessary to open up innocuous areas, with a global strategy and a defined plan of what Andorra is to be," Perez said. "Andorra cannot turn its back on what is was born, and what it has always been. Commerce is the most important source of wealth and the government should invest in making Andorran shops more competitive."
|
|
Table of Contents (1) A young country with an ancient history |
Andorra is known worldwide for its tradition in commerce. Competitive
prices, a wide array of products and the ongoing specialization of the commercial sector offer first
class quality and service. Millions of tourists visit the country every year searching for
recreation, relaxation and shopping, taking advantage of the wide selection of specialist, designer
and luxury products available.
But Andorra still promotes itself as a shopper's paradise. According to a recent study by
Spain's Organization of Consumers and Users, in most products, the Principality offers Western
Europe's lowest prices. The study compared prices in Paris, Madrid, Lisbon, London and Andorra.
Andorran entepreneur
Enric Palmitjavila agreed the key to success for the country's commercial sector is product
diversification and specialization. "Professionalism and quality of service are becoming more and
more essential as other competitive advantages disappear," he said. "The vendor must be technically,
spiritually, intellectually and humanistically prepared."
In order to compete in a market that is changing to accommodate EU and
customer requirements, Andorra's government is taking steps to ensure that it no longer has to rely
on trade. It has been encouraging the expansion of a non-polluting industry and reinforcing the
services sector by developing quality tourism based on better management of natural resources. "We
have numerous advantages, such as the dynamism of private enterprise, a young population benefiting
from improved training, considerable funds and, especially, the recent modernization of our
institutions, which now provide the country with new means for success," Minister of Economy, Enric
Casadevall, said.
Andorran entrepreneurs believe that economic
diversification will require not only further development of infrastructures to encourage potential
new industries, but also a profound change in mentality, at all levels of society. "We have
accommodated to the international environment, we have modernized our political institutions at a
vertiginous speed" Besol’ said. "We have proven ourselves to be very skillful at adjustment. It is a
daily challenge, to evolve with the country."