Prague/Warsaw — Ukrainian businesses that set up or expanded in central Europe after Russia’s 2022 invasion are shifting their focus from mainly refugees to local customers as they become more established, with some now eyeing a move further west.
As the war closed off opportunities at home and to the east, including Russia, Ukrainian-owned businesses sprang up in neighbouring countries, initially targeting their displaced compatriots with food, drink and services.
In Poland, which has a Ukrainian population swollen by the war to more than 1.5-million at current estimates, Ukrainians opened every 10th new business in 2024, according to Polish business associations and economists.
Andrii Halytskyi’s Lviv Croissants now has 12 shops in Poland after opening there two years ago. It opened its first Czech outlet in October, part of what its founder says is a strategy to build a geographically diverse business by expanding westward and beyond the diaspora.
“While the Ukrainian refugee community in Europe is significant, relying solely on this customer base is not a sustainable long-term strategy,” Halytskyi said.
Strong cultural similarities with Ukraine have helped make Poland a natural base for Ukrainian businesses. But many are also looking beyond emerging Europe’s biggest economy to a much bigger pool of customers.
“Companies initially view Poland as a bridge or springboard to EU markets,” said Dariusz Szymczycha, a vice-president of the Polish-Ukrainian Chamber of Commerce.
“They want to learn ... the reality, standards, regulations and rules of operating in the EU.”
The Piana Vyshnia chain of bars is themed around a traditional cherry liqueur from Ukraine but sees local customers as its main target, founder Andriy Khudo said.
Khudo’s !FЕST restaurant group has grown the brand — known as Drunken Cherry in English — to 15 locations in Poland and nine in other Baltic and eastern European countries, ramping up westward expansion since February 2022, he added.
The group plans to open in Germany, Switzerland and France in 2025 and relaunch a venue in London, he said, adding that the bars are attracting new customers and are profitable.
“Before the war we focused on Ukraine because our business was developing there so quickly. But the war kicked us to look more west because of the risk in Ukraine,” Khudo said.
Economic flip
Though Ukraine’s economy grew in 2023 and is likely to have expanded in 2024, economy minister Yulia Svyrydenko said in November it was still only at 78% of its size before Russia’s full-scale invasion in February 2022.
With no end to the conflict in sight, businesses such as Khudo’s have had to look elsewhere — an economic flip for nearby countries which have also seen labour market strains eased by the arrival of Ukrainian workers.
A Deloitte report in March 2024 estimated that refugees from Ukraine would add as much as 1.1% to Poland’s GDP in 2023 and as much as 1.35% in the longer term.
“When they come to Poland, for example, whether to work or set up businesses, this is an additional stimulus from the economic perspective for consumption and improving the supply of labour,” said Andrzej Kubisiak, deputy director of the Polish Economic Institute.
Another Ukrainian restaurateur, Olga Kopylova, said she had no plans before the war to take her Chornomorka brand abroad but now has three outlets in Poland and two apiece in Bratislava and Vienna.
Coffee chain Aroma Kava moved to Poland in 2022 and has since expanded to 10 locations, while Ukrainian ice cream and frozen products maker Three Bears bought Polish company Nordis.
Poland is now the second-most important market for digital entertainment provider MEGOGO which has grown by appealing to local residents, mainly through family programming, co-founder Volodymyr Borovyk said. It entered Poland and Romania — emerging Europe’s two most populous countries — in 2023.
“The healthy Polish market not only motivates us but also encourages other Ukrainian companies to enter this market with products tailored specifically for Polish consumers,” he said.
At the newly opened Lviv Croissants branch in Prague, the staff served a mix of tourists, locals and Ukrainians who sipped coffees and nibbled on sandwiches as they took a break from the holiday rush.
“This was my first time eating here, but for me it is like a feeling of home,” 20-year old Ukrainian student Tatiana Melnyk said.
Reuters
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