Eltim has been opening exclusive Beko stores across the country.

Household consumption is rising as Serbs find themselves with more to spend now that the economy is expanding

EU citizens earn almost seven times more than Serbian citizens, but consumer purchasing power is on an upward trend that is expected to continue as average annual salaries rise—and that is good news for retailers.

Per capita GDP has doubled to nearly $3,000 since 2001, resulting in a marked rise in household consumption. According to the Serbian Statistical Office, the turnover of the retail trade was up by 16.6 percent in the first nine months of 2006. Consumer goods now account for 21.5 percent – $1.81 billion – of imports, contributing significantly to Serbia’s rising trade deficit.

In an interesting sign of the times, the Serbian Consumer Association recently published the first issue of a consumer magazine as a supplement to the Danas daily newspaper.

With a population of around 9.3 million, Serbia’s internal market is among the largest in Southeast Europe. The U.S. government export portal, Export.Gov, describes it as “still one of the few unsaturated markets in Europe,” and notes that consumer preferences are highly turned towards products originating from the United States and other developed countries.

JOVAN ILIC General Manager of Eltim

Serbia’s expanding consumer market is also good for local companies like Eltim, which sells white goods, audio and video equipment, and small home appliances. Established in 1990, Eltim has persevered through the bad times. “We have survived, and we have grown despite the circumstances,” reflects the company’s General Manager Jovan Ilic. “Eltim is a brand that consumers have confidence in, and we do very good business.”

Mr. Ilic believes that the market has a lot more potential and that—despite the rising trend—demand is only being checked because purchasing power is still relatively poor. “The need to replace appliances is much greater than the purchasing power of the consumers,” he says.

Eltim is the market leader in the sale of kitchen devices, serving its customers through a network of 25 department stores. In addition to importing a variety of leading brands, the company is the exclusive importer and distributor of the Turkish-based electronics manufacturer Beko, as well as Daewoo and Sharp.

Eltim has been opening a series of 40 exclusive Beko stores. “We believe we have a bright future with Beko,” says Mr. Ilic. “Annual growth of Beko products stand at 137 percent, and it will continue to be the dominant brand for us.”