In a bid to diversify and assert itself on the fast growing Russian e-commerce market, major mobile retailer Svyaznoy is now catering to travelers and selling furniture and jewelry online.
Its most recent project, one the company positions as a ‘travel hypermarket’, Svyaznoy Travel, aims to incorporate both online and offline formats for all travel services, from booking air and train tickets to offering hotel reservation, tours and cruises, car and house rentals.
Visiting the Svyaznoy Travel portal – or any of the company’s nearly 3,000 physical outlets across Russia and Belarus – customers may now expect to find a set of customized travel services at prices that analysts feel are competitive enough for Svyaznoy to outstrip many conventional travel agencies
Earlier this month, the company launched sales of air tickets for a reported 500 international airlines. Train tickets will be available in March, Svyaznoy announced. Other services will reportedly follow, including apartment rentals, hotel reservations, car rentals, flower delivery, etc.
Svyaznoy CEO Denis Lyudkovsky hopes ticket sales will add about $33 million to his firm’s revenue by 2013.
Last year, online sales accounted for more than 25% of Russia’s $10 billion air ticket market.
A bold click-and-mortar initiative
In its hunt for new markets, Svyaznoy has taken a further step beyond its time-tested focus on mobile phones and household electronics. An online and offline concept, Enter.ru offers a broad range of goods including furniture, sports and children’s goods, and even toys and jewelry. Svyaznoy says, however, that Enter.ru will not sell cloths, groceries or medicines.
Customers may place online orders on Enter.ru – the site has already been operating for four months – contact a call center, or drop by an offline Enter.ru outlet.
Some analysts are not sanguine about the prospects of the new initiative, arguing that many people still find it easier and are more accustomed to buying furniture or jewelry at physical outlets.
Others counter, however, that a trailblazer like Enter.ru may carve out a decent market share given the strong pent-up demand for its assortment or products, as well as competing with major offline retailers in finer customization.
Svyaznoy already has a flourishing e-commerce site, Svyaznoy.ru, dedicated to its core mobile retail business. In 2011, the site’s turnover reached 3.51 billion rubles, or $120 million, compared to 1.5 billion rubles, approximately $50 million, in 2010. The site’s audience reached 54 million visits in 2011, with 687,000 orders averaging 5,000 rubles, or $170, Svyaznoy told East-West Digital News.
Sources: Svyaznoy, CNews.ru, Telecom Daily
- RUSSIAN E-COMMERCE REPORT 2012 – The total volume of Russian online retail reached 310 billion rubles, a little more than $10 billion, in 2011, up 25% from the previous year. EWDN’s research study of Russian e-commerce, with an interview of Svyaznoy’s Head of e-commerce Oleg Ryazhenov-Siems, will be available soon. To receive free insights or to order the full version, please contact us at [email protected].
