Latvia: Uncovering the Shared Hosting Market with Deniss Mazers, CMO, Garmtech

Next up on our list of shared hosting markets we wanted to explore was Latvia, a small, yet interesting market with lots of potential. For this purpose, we’ve met with Deniss Mazers, the Chief Marketing Officer of Garmtech. Garmtech is one of the leading hosting providers in the country. As it turned out, throughout the years the company was at the center of many innovations and continues to do so. In the interview below, Deniss shares with us insights into the Latvian market, as well as the inner workings of the company.

Latvia and Hosting in Europe

Latvian Market in Numbers

Because of its size and population, Latvia is a small market. The total population is around 2 million, with the number of people involved in business standing at around 1 million. Currently, there are approximately 15,000 registered .lv domains, but the number is growing. Many businesses in the country prefer the .com domain, as it’s a more popular and affordable option. According to Deniss, typically, one shared hosting provider has 3-4 domains, but there is a huge segment of people who start with 1 domain. Later, as the business scales, they purchase another one.

Competition in the Latvian Market

When it comes to competition in the hosting market, it’s usually local firms competing with each other. Bigger names like Wix and Weebly mainly offer website builders, when it comes to the Latvian market. 'They don’t target Latvia directly, since they don’t have a separate budget allocated to our country. But because they target Europe in general, they appear in search as paid ads,' mentions Deniss. If people do choose to go with a hosting service outside, it’s usually because of the cheaper price. But usually, customers choose to stay local.

Customer Support

According to Deniss, customer support is one of the main reasons why people choose to stay local.

'With these larger companies, the support process is hard. They usually have a ticket system, where they need to open a ticket, then wait for a few days, which is usually a long process. With local support, on the other hand, it’s much easier.' Most of the people in the country are bilingual, knowing both Latvian and Russian, and many of them also know English. So Garmtech has support services available in all three languages, with Latvian customers using Latvian and Russian equally often.

Money Matters

As everywhere else, people pay attention to the pricing of services they use. Many go with the .com domain because of its affordability, for example. Garmtech tries to stay in the middle of the pricing. The company tries to promote the usage of credit cards among the population.

'Currently, internet banking is what people prefer to use the most, but it has many disadvantages. This payment system charges a transaction fee for both the customer and the company. Additionally, it doesn’t allow renewing subscriptions, so the services can be turned off every billing period. That’s why we try to make credit cards more popular, as all involved parties will benefit from it.'

Website Builders in Latvia

Wix and Weebly are two of the big names who have some presence in the Latvian market.

'Website builders are a great tool, and Wix has been doing a great job advertising them. People have become aware of the existence of such tools, and realise that making a website shouldn’t be very hard.' However, in the words of Deniss, people find some website builders hard to use. Customers look for simplicity when it comes to tools that they need to use themselves; otherwise, they hire professionals.

Storing Data: the Experience of Garmtech

'How the industry evolved started from HDD drives. They were slow but could store a lot of data, and they were relatively cheap. Then, SSD drives came into existence; much faster, but also a lot more expensive. Many companies switched to SSD, but there was a problem for larger companies. Because they had a lot of data, investing in enough SSDs would cost billions.' This is where the journey of Garmtech with Fusion started, which is a mix of HDD and SSD developed by Facebook and Google.

'For large businesses, investing in Fusion makes no sense since it's still very expensive. But for the Latvian market, which is small, and the company has to fight for every customer, investing in servers and drive is important and can become a powerful selling point.'

Successful Shared Hosting Promotion Cases

'When we switched to HDD, we advertised it heavily. The pricing was kept almost the same, with a 1-2 Euro difference. People got interested, and they were ready to invest to get a better service. Through this campaign, we got a lot of local and international customers,' tells Deniss.

The company has been experimenting with online ads continuously. One working strategy they’ve found is the timing of the ads. After careful research on what their target market does at what times, they’ve placed Facebook ads, running them at specific times. 'We’ve set ads during football match breaks, for example, when people are more likely to scroll Facebook. Or in between TV show ads. This way we saved our marketing budget while keeping the performance. We still use this strategy. What we’ve found is that you need to switch up strategies to see how they work. The starting idea is usually not the idea that works.'

Wrapping Up

Although small, the Latvian market is an interesting case to look into. The rising population of the country, adherence to relatively used data laws of the EU, and the preference of the people to stay local make it a great place to start a shared hosting business. People look for simple and affordable solutions, and fast hosting, affordable domains, and easy-to-use website builder tools can put many companies at an advantage.