Inflight Magazine of Brussels Airlines

Business trends

Our round-up of what’s happening in the business world across Europe

Text Boyd Farrow
Images Getty Images

RADAR

Mobile freedom fighters

The free phone-call battle has moved from computers to mobiles. The UK’s Blyk, an ad-funded pan-European operator, has been buying wireless services from operators and giving them away to 16-24 year olds. Users first answer a questionnaire enabling advertisers to market to specific groups. Blyk says it will have 100,000 users before September and is now eyeing a move into the Netherlands.

Canada’s Talkster also allows consumers to make free international and long-distance calls from their mobiles, landlines or computers in return for listening to ads. Users just specify the numbers they want to call – no registration is required and they won’t need any new software or downloads.

California-based Jaxtr is now used by more than 10 million people in 220 countries to make and receive free international calls. Users link their phones with their online social network. Callers use a local number to make international calls from their mobiles.

Perhaps the most interesting twist on free mobile calls is Brussels-based Pumbby, which pays users to accept ads. Customers choose how many ads they’re willing to receive via SMS and each ad credits their account with €0,44. This can be used to pay their phone bill or to buy DVDs, books or cinema tickets.

DRAWING BOARD

SOVEREIGN WEALTH FUNDS

Sovereign wealth funds – the investment vehicles of oil-enriched states – grew 18% last year as commodity prices soared and the foreign-exchange reserves of some Asian countries rose. The funds now manage assets worth a staggering €2,091bn and will oversee more than €6,339bn of assets by 2015, says International Financial Services London.

Bankers, regulators and sovereign wealth fund representatives gathered in London in March to discuss encouraging investment by the funds outside their countries of origin. Most of the largest funds are controlled by oil-rich nations such as Norway and Gulf states and by Asian countries, such as Singapore and China, which have huge trade surpluses.

SWFs have recently become the focus of suspicion and there have been calls for more transparency by financial watchdogs. Since the start of the US sub-prime lending crisis, SWFs have invested more than €38bn in return for large stakes in predominantly US and Swiss banks. They’ve also taken large stakes in the London Stock Exchange, Sweden’s OMX exchange, Budapest airport and private equity groups such as Carlyle. Morgan Stanley says that, at $100 a barrel, the total proven reserves of oil-exporting countries is about $104 trillion, equivalent to the total value of all the world’s publicly traded equities and bonds combined.

Not really… necessary

Is there anyone not in a coma who isn’t aware that Berlin’s main industries are art, partying and all-round trendiness? In the middle of the exhaustingly long fifth Biennial for Contemporary Art – which runs until 15 June – Germany’s capital has launched a promotional campaign around the slogan “Be Berlin” to entice more tourists and investors.

The new slogan – the city’s first official slogan since unification in 1990 and one that apes the Dutch party capital’s “I Amsterdam” – comes at the hefty price of €9.3m. And who is funding this campaign? The city, of course, whose mayor Klaus Wowereit coined Berlin’s unofficial slogan: “We’re poor, but sexy” five years ago. The Be Berlin slogan, which ensures that the city is even poorer by €9.3m, was reportedly approved in a meeting of a selected panel of 16 prominent residents of the city, including star architect Hans Kollhoff and Catherine Mühlemann, vice president of MTV Germany. It was chosen from more than 300 submitted for consideration.

The campaign, which began on 11 March with TV and radio ads and billboards, will be extended to the rest of Europe and other countries over the next few months.

Growing gains… Rwanda on the up

Investment-focused Rwanda, which launched its stock exchange this month, hopes high-end tourism will augment both its economy and image this year. Approximately 40,000 tourists visited the east-central African country in 2007, spending €26.6m – a leap from 2002 when just 7,000 checked into Rwanda’s crumbling hotels and game lodges. This year, former British prime minister Tony Blair is a roving ambassador for the once genocide-ravaged country and its president Paul Kagame is on the after-dinner speech circuit and the Clinton Foundation board.

Rwandans, however, are more excited by reports that Sultan Ahmed bin Sulayem, the chairman of Dubai World, has taken over three safari parks and lodges to create a new tourist playground. The country’s challenge, says its tourist board, is to ensure that visitors make Rwanda a holiday destination and not simply a stopover for a Ugandan safari. This summer Rwanda plans to put luxury boats on Lake Kivu, launch bird-watching and caving ventures and add several hundred hotel rooms. The government is also promoting the annual gorilla-naming event, Kwita Izina, in June. The endangered species has recently enchanted Hollywood stars Natalie Portman and Ben Affleck, resulting in valuable positive publicity for the country. And in an attempt to improve its hotels, the Rwandan government has done a deal with Geneva’s La Roche to build East Africa’s biggest hospitality training school.

Drawing board

PRESS FOR SERVICE

Europe’s publishers are becoming more innovative as the public is used to getting more and more stuff for free on the web. Take Copenhagen-based Ventus, which publishes economics, science and engineering books in Denmark, Sweden, Belgium, Germany and the Netherlands. Ventus is giving away course books by inserting ads from companies such as T-Mobile, British Airways and Deutsche Bank every four pages. Now Dutch company Boomerang Media – which pioneered those free postcards on café racks – is rolling out free city travel guides throughout Europe. Created in co-operation with travel guide publisher Mo’Media, they are compact versions of the 100% travel guide series and are distributed through Boomerang’s card racks in cafés, cinemas, universities and gyms throughout the Netherlands. All 100,000 of the first one, 100% Istanbul, were snapped up within two weeks in mid-January.

Boomerang aims to publish 12 new free travel guides each year, covering cities including Berlin, London, Paris, Barcelona and Brussels. Sponsoring a full guide will cost about €45,000, but advertisers can also opt to sponsor individual pages or sections.

RADAR

CHIC & CHEERFUL H&M

Slump, schlump. Hennes & Mauritz (H&M), the Swedish fashion giant that sells T-shirts for as little as €3,75, has bucked the nose dive in retail by reporting a 19% jump in profits and strong sales growth. H&M announced pre-tax group profits of SEK 4.06bn (€432m) for the three months to February, compared with SEK 3.90bn (€415m) a year ago. Now the world’s third-largest clothing retailer, H&M attributed its success to “well composed” collections and more online activity, but has also been investing more in price promotions over the New Year. Analysts suggest that the combination of cheap but trendy clothing was a far bigger factor in H&M’s success than the group’s costly marketing campaigns featuring Kylie Minogue and Madonna. In the next three months, the chain plans to open 54 more stores in the UK, US, Spain, Italy and Germany.

Upgrade your trip

When you get home

Can’t find that perfect souvenir of your trip? Staying at a Hilton? Why not take something from your room. No, seriously. Hilton Hotels has launched an on-line shop called Hilton to Home, which sells all the stuff you enjoyed in your room, including tissue-box covers and wastebaskets (hopefully unused). For $60 (€37,60), there’s also a Hilton Family Exclusive Clock Radio which, because it runs on 110V, only works in the US. Of course, if registering online is too much hassle, you could just steal the stuff when you’re next staying at a Hilton and wait for the hotel to charge it to your credit card. hiltontohome.com

WHY ARE WE HERE?

Building bookcases in Russia and beyond

IKEA, the world’s biggest home furnishings retailer, is racking up its strongest growth in Russia. Last month, sales surged 50% from a year earlier in the country, compared with measly 2% gains in Western Europe. IKEA plans to increase its current 10 Russian stores to 25 there and in former Soviet states within five years.

The Swedish furniture giant says Russia may surpass Germany, Britain and France as its main European market in five to 10 years. IKEA, which opened its first Russian store eight years ago, will add four local outlets over the next year and plans to open its first Ukrainian store in the coastal city of Odessa in about two years. It may also add an outlet in the Belarusian capital of Minsk and stores in Kazakh soon. The company may invest $500m in its first two malls in Kazakhstan, the country’s government said in January.

IKEA has about 240 outlets in 24 countries and has said it plans to open 22 more this year. Sales climbed 14% to €19.8bn in the fiscal year through August. Germany was its main market, generating 16% of sales, followed by the US at 10% and France and the UK at 9% each.

Traffic report

POLES VAULTING

Poland has just launched the Polish Business Chamber for Advanced Technology, or PIGZT, to aid development of the country’s high-tech sector. It is the first business body in Poland which will have members that are scientific institutions, banks and funds specialising in high-risk enterprises. PIGZT was founded by the top 10 largest Polish universities and nearly 100 businesses, including Vigo System, Biocentrum, Celon Pharma and Biochefa. “The time for competing with cheap labour has ended,” proclaimed minister for the economy Waldemar Pawlak at the official opening. He said that these days competition should be through the application of knowledge and, if more Poles participate in the exchange of information, “the greater the results will be for the country”.

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