Czech crystal makers use Internet for new markets

After their markets in the former Soviet Union evaporated and with the shelves of up market stores in the West full of competitors' wares, Czech glass makers had to find a way of reaching new customers quickly.

The answer? The Internet.
Nearly 80 percent of the adult Czech population has never surfed the Web and quality computers are still too expensive for many businesses, but Czech crystal exporters say they can't do business without it.
"I don't even deal with manufacturers who don't have the Internet," said Karel Hart, who exports everything from mass-produced machine glass to crystal hand-cut by craftsmen all over the Czech Republic.
"Each customer wants a different design or their logo on the glass, and I have to pass that on to the craftsmen quickly...You just can't do that without the Internet," said Hart, who exports to Spain, America, South Korea and Taiwan.

"The fax and the phone are just too slow. If a glass manufacturer wants to succeed today he needs to use the Internet -- or he just doesn't have a chance," he adds.
Czech glass blowers, cutters and engravers have had ample resources to perfect their craft since the Middle Ages.

The sparkling glass objects they made found their way onto the tables of royalty, such as Edward VII and Elizabeth II of Britain, Norway's King Haakon VII, Pope Pius XI and the last Shah of Iran to name just a few.

Moser is the "Rolls Royce" of the Czech glass industry. Established in 1857, the company still prefers to sell its glassware through stores, but it has come to appreciate the speed and cost-effectiveness of the Internet.
"We use it to transfer data, photos, documents etc. It's faster, and, more important, it's free. You pay (couriers) several thousand crowns and it still takes a day to get there," said Moser's chief executive officer, Antonin Vlk.

DIRECT CUSTOMER CONTACT
The direct customer contact which the Internet allows has been another boon to quality Czech glass makers who were forced for 40 years to sell through the state-controlled glass exporter, Skloexport.
"We were entirely reliant on Skloexport -- completely cut off from the market," said Vlk. "We didn't even know if they were selling our glasses in boutiques or in supermarkets."
All Czech crystal, regardless of the manufacturer, was sold under the generic label "Bohemia Crystal". As a result, names like Moser, which had been exporting worldwide since 1893, disappeared from the market.
But Skloexport fell apart in 1997, leaving the newly-privatized glassworks high and dry.
They had no marketing experience and no contacts. Traditional markets were gone and competitors such as France's Baccarat and Ireland's Waterford maintained a high profile in Western shops.
Czech firms had were forced into the same kind of restructuring normally associated with the heavy industrial concerns of the communist era. They pumped up their sales departments and bought new computers.
"We haven't broken into the top markets in the West, yet, but with globalization, there are markets all over the world," said Jiri Rueckl, of Rueckl Crystal, who bought back his family's glassworks in 1993.
Indeed, Rueckl's glass foundry, located in Nizbor, 45 km (28 miles) west of Prague, has become Europe's prime exporter of cut crystal hookahs to the Middle East.
"One of our Lebanese customers came to us three years ago and asked us if we could make them. We tried it and today we export about 7,000 of them to the Middle East a year," he said.
"This is what comes from direct contact with the customer," Rueckl said.

LONG HAUL TO CONQUER WESTERN MARKETS
Czech manufacturers have not given up on the Western retail market. But they say it is a long haul.
Moreover, quality retailers in the West are just too risky at this point, they say.
"You just can't break into the big chains," Hart said. "They want fees for even carrying it on their shelves (and) they'll only sell on commission."
"On top of that, they want huge volumes because they want to supply their whole chain, and those are million dollar turnovers -- even big makers can't handle those," he added.
Rueckl has taken the "if you can't beat 'em join 'em" approach and does a lively business with Irish Waterford through commissioning.
"It increases our prestige when people hear we get commissions from Waterford," he said, adding that working with Waterford has improved the standards at his own foundry.
"They taught us a few things about quality control. The first time one of their inspectors showed up with industrial-grade calipers my workers almost mutinied, but today they accept the higher standards as normal," he said.
Unlike many other Czech industries, crystal makers say they have nothing to fear when their country joins the European Union.
Employers are not worried about outside competition and an inevitable rise in wages after EU entry.
"The share of wages is about 10 to 11 percent of turnover, right now, so we can afford to raise it," Rueckl said. "And we aren't dependent on the Czech market. We export 85 percent of the products we make."
Rueckl has opted to keep volumes low and concentrate on quality.
"The whole world is going the way of industrialization, raising productivity... we can't and don't want to compete there," he said.
"We want to sell to those people who want something unique on their tables or in their offices, something they can't buy off the local department store shelf... And they're out there."