Balint Fazekas began working at the electronics retailer Euronics Műszaki Áruházlánc, the business founded by his father in Hungary as Vöröskő Kft, at the age of 13. He dreamed of following in his dad’s footsteps and becoming CEO, and imagined he would do so as he approached middle age.
“Every summer job, and even during school, I was working here,” he remembers. “It was always my number-one goal in life to take this company over. I was expecting it to happen when I was 35 or 40.”
But Balint’s passion and dedication to the company were so strong that, in 2017, the opportunity to take a senior leadership role came much earlier than he expected. “Fortunately, or unfortunately, it happened when I was about 22 or 23,” he says.
“When the request came in, I had the night to sleep on it and make a decision, and the next morning I decided I would 100 per cent do this full-time.”
It’s not like working for a big multinational company where everything is written and you have to follow whatever the shareholders give you.
At the time the business was struggling, but Balint, now CEO, saw it as an opportunity to leave his own mark. “I wanted to revitalise the company, and it was a huge company back then already, but it wasn’t on such stable ground and it wasn’t looking too good,” he recalls. “But I always lived for the challenges.
“It was a huge amount of pressure, but I really believed I could use what my father had created as a foundation and build on it, and use my own personality to build a brand as I would like it. It’s not like working for a big multinational company where everything is written and you have to follow whatever the shareholders give you.”
New value proposition
The first thing he did was acquire one of Hungary’s oldest electronics brands, believing that vertical integration would bolster his firm against tough times and boost revenues. Today, that brand has achieved a 5–10 per cent market share in Hungary, and accounts for three to four per cent of the company’s turnover.
Euronics now has dozens of stores across the country, where it employs about 900 people and forms part of a global chain covering dozens of countries. Balint’s father, Zsolt Fazekas, aligned Vöröskő Kft to the Euronics International Purchasing Association in 2001. In doing so, the company has remained privately owned, and thus retained its independence while benefiting from the use of the well-known Euronics brand name, not to mention its economies of scale in procurement.
Another part of Balint’s mission in taking over the company was to revise its value proposition. He notes that many unicorns don’t break even for a long time because they first serve the customer, then the staff and then the shareholders. Euronics in Hungary, he explains, had spent a long time focusing on profits and putting less emphasis on key elements of the customer experience.
“It was very important for me to turn that around and to make sure that the customer always has the same maximum level of service, the best quality we can ever offer, and to recognise that our colleagues are the most important assets we have in the world,” he says.
One way he brought that vision to life was by getting rid of the cheapest products in the company’s stores in order to focus on offering premium ranges, with highly knowledgeable sales staff offering a level of service to match the higher price tags.
Our unique selling proposition is that we have the best salespeople with the best knowledge in the country within this segment.
“Customers are choosing more and more premium products,” Balint reveals. “And now we are number one. Our unique selling proposition is that we have the best salespeople with the best knowledge in the country within this segment, and to sell a toaster for €8, including 27 per cent VAT, doesn’t make sense.”
Customers who want the lowest price they can get are far more likely to go online for it, he notes, whereas those willing to spend more still place a lot of value on the in-store experience. “If it’s something they will need help with, some advice, they will definitely come into the store,” he suggests.
The reason Balint is so confident in this new business model is that he has already seen it working. “The demand is still there for the personal sales, for the personal help, for having people to trust. This is why you see Amazon and top European ecommerce players entering the offline world and opening stores, because without that it’s not possible to gain enough trust from consumers,” he says.
Always lead
Balint’s leadership style is based on a global outlook he developed while studying abroad in the UK, and on things he learned from some of the world’s top business leaders. His encounters with Noel Lee, the Founder and CEO of Monster, the company behind Beats headphones, would have a profound effect on Balint’s approach to his work.
“He taught me to always lead and never follow, which he actually made the tagline for his company,” he explains. “I think that’s very important. You have to understand what your value is, what your value proposition is, and you have to be the best at it. You have to go and create. You cannot just follow the market. You cannot just follow other companies, because with that strategy you will lag behind at some point.”
This is why you see Amazon and top European ecommerce players entering the offline world and opening stores, because without that it’s not possible to gain enough trust from consumers.
Above all, Balint feels enormously privileged to be able to put that advice into practice at such a young age, in his home country, and in a company where he is free to express his own creativity and bring on board others with the talent and drive needed to succeed.
“I’ve worked with the best-quality managers in the country,” he says. “Having all this decision power here in Budapest, in Hungary, having the best talent come and work with me on a common goal, is just amazing.”
That level of freedom and creativity means that what he does seldom feels like work. “It’s a huge playground here, and we love to play.”
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