Since opening in June 2018, Prague’s Manifesto Market – a pop-up, cashless venue housed in containers – has pulled in the crowds. It boasted 650,000 visitors in its first year and won Mastercard’s 2018 Retailer of the Year award for customer experience.
Following on from this success in the Czech Republic, Manifesto Market recently secured a seven-figure growth equity investment from Rockaway Capital, a multi-stage investment firm with a portfolio that includes e-commerce platform Mall Group and pan-European online travel agency Invia Group. With Rockaway’s support, Manifesto Market plans to augment its business through upgrading its technology, opening another Prague site and expanding into China and Portugal.
An area transformed
Manifesto is the brainchild of Martin Barry, a former landscape architect and founder of reSITE, a global non-profit organisation that is focused on improving the urban environment and runs some of Europe’s largest self-organised conferences on architecture and planning. The business has evolved a ‘pre-development’ model that provides benefits for real estate developers and cities alike.
In the case of Prague, Manifesto’s central location next to a highway was once considered a ‘no-go zone’ known for petty crime, muggings and drug dealers. This has since been transformed into a rejuvenated area and prime piece of real estate due to the success of the temporary 27-merchant market.
“Many investors and tenants that we approached told me that they would not be able to sell food in this site next to the highway as it is dangerous. Now when I tell people where Manifesto is, they say it is successful because it is a great location. You can turn perceptions around,” says Mr Barry.
By taking on derelict spaces, Manifesto helps rejuvenate run-down urban areas, while giving real estate developers the opportunity to use pre-development sites that would otherwise be sitting idle.
“In Prague the typical planning process is seven years, from acquisition to permitting for new builds. We see brownfield sites as huge opportunities – at least cleaned brownfield sites – because in many cities they are lying derelict for many years,” says Mr Barry. Moreover, Manifesto has the potential to bring substantial marketing value to pre-development sites, as was discovered by Penta Real Estate, which lent Manifesto the former brownfield site for the pop-up market while it awaited permanent redevelopment.
“We will bring probably 1.3 million people through our market this year, and a lot of those are high earners. We can’t estimate the real estate value right now, but the interest in its projects have gone up exponentially from our markets,” says Mr Barry.
A brief encounter
Manifesto’s unique short-term pop-up business model ensures its sites maintain their appeal, driving revenues and fast returns for investors. “We are already generating a lot of revenue after only being open for seven or eight months. For an investor there is very little cash risk in the company; we can recover the capital expenditure in about one year,” says Mr Barry.
Fast returns on investment could explain his plan to maintain the short-term focus and shy away from longer term markets.
“We want to be a purely pop-up environment. I don’t want to establish market places for decades; three to five years is the right model for us, and therefore in some European cities it is the perfect relationship with the private sector,” adds Mr Barry.
Shipping them in
While the concept of a shipping container market and retail space is not new, Mr Barry claims that Manifesto offers something unique due to its highly curated customer experience. “We approach it from a 360-degree perspective; we do the curation of the projects, design, leasing, communications, creative strategy, development and financing. We do the whole thing, making us a kind of one-stop shop for developing the marketplace,” says Mr Barry.
Furthermore, the cashless system provides a safe environment for both guests and merchants, who do not have to worry about carrying large sums of money home, and provides an opportunity to analyse consumer and product data, and hence drive innovation.
With 20 high-quality restaurants, Manifesto hopes to bundle its transactions for food delivery companies, offering customers the option to order various cuisines in one go. “We are in the process of analysing whether we want to partner with a logistics company, such as Wolt or Uber Eats, or run them ourselves. We are trying to launch as fast as possible, but likely it will be early 2020,” says Mr Barry.
Slowly does it
With numerous requests to build new markets, Manifesto is not restricted in its ability to scale quickly, as seen by novel companies such as co-working hospitality brand Selina (which featured in fDi’s February/March 2019 issue). Instead, the company wants to take its time to develop its technology, separate in-house teams and maintain its community-based approach.
“The difference between us and Selina, for example, and why we are not looking to build 40 or 50 locations this year, is that we really want to perfect the model, have it be defensible, and then go for a larger expansion,” says Mr Barry.
Nonetheless, following reSITE’s work with city governments in Portugal, Manifesto has been offered three different locations to develop its pop-up activities, and believes the western European country has the perfect climate to extend its concept. “We think the Portuguese economy is interesting because of the level of tourism. This sustains about 40% of the Manifesto business in Prague, and we think that it could be more like 50% to 60% in Portugal,” says Mr Barry.
Further afield, Manifesto has been invited by the government of Suzhou in China to explore five sites in 2020, providing opportunities to scale in the city of 12 million, which is located about 100 kilometres from Shanghai. “I think that is a sustainable amount of growth for us,” says Mr Barry.
Rather than drive innovation through cashless payments in China (which already accounts for almost 40% of worldwide e-wallet transactions, according to the 2018 World Payments Report), Manifesto plans to curate a unique customer experience that brings cuisine from across China with an added European element.
“We want to merge the different styles in a nuanced way, to bring different kinds of Chinese cuisines together, [while] bringing European-level product and quality, like Czech beer, to this kind of curation of local food in China,” says Mr Barry.
It may be young but this fast-moving business model has already had success with a cashless payment environment, which itself has the capacity to boost innovation. With its ability to help transform urban areas, Manifesto's model looks likely to be welcomed by many cities in future.