Sergey Rumyantsev, CEO of Enter.ru, told the audience at the Global E-Commerce Summit in Barcelona yesterday, that while the Top 30 of Russian e-commerce operators generate 50% of the total online turnover, the rest is generated by over 30,000 e-commerce players. Those smaller companies, which are often not reliable nor complying with the law, appear and disappear by the hundreds every month.
With a growth rate nearing 30% per year, Russia is one of Europe’s most promising e-commerce markets. Nevertheless, many western companies are reluctant to enter this huge country, that harbors quite some challenges for online retailers.
“The obstacles include the absence of warehousing possibilities, the absence of delivery companies, the absence of good people and the absence of investment”, stated Rumyantsev.
In addition, he explained that market entry is difficult due to strict conditions and restrictions. Due to above mentioned problems, according to Rumyantsev, successful e-commerce players have to rely on their own capacities when it comes to warehousing, logistics and human resource.
His company chose to operate all facets of the business in house, from marketing to the expedition of parcels. Even in the sales catalogue, the models displayed are in fact employees of the company. The catalogue generates 12% of the volume, while the website turns over 35%. Mobile generates only 1 %.
“We believe in the universe of contacts around the customer rather than focusing on separate channels”, said Rumyantsev. Enter’s stores are equipped with large interactive screens which allow the customers to order goods, pay, pick them up directly or another day, or have them delivered to their home address. The company, operating a unique hybrid clicks- and bricks business model, sells over 40,000 SKUs.
Dismissing the widespread cliché of Russians only being capable of cloning existing Western business models, Enter.ru is a hybrid offline/online retailer with no known equivalent in the world. Launched in early 2011, the company recorded 3.1 billion ruble in turnover the next year (approximately $100 million, including VAT), quickly asserting itself as a major player on the Russian e-commerce scene. In an interview with EWDN earlier this spring, Sergey Rumyantsev shared some insights on his Enter.ru’s strategy and operations, from fulfilment, to marketing, to further deployment.
- RUSSIAN E-COMMERCE AND CROSS-BORDER SALES REPORT – The total volume of Russian online retail reached approximately $13 billion in 2012, up 25% at least from the previous year, not including cross border sales. EWDN, in partnership with leading universities and consultancies, has published an in-depth research on this industry. To receive free insights or to order the full version (2013 edition), please contact us at [email protected].
