Home business Return to the West: what is the Russian Amazon Basin & #...

Return to the West: what is the Russian Amazon Basin & # 39; to do

Marketplace with foreign suppliers, created by Sberbank and Yandex, will be launched in October. Although most supplies now come from China, the new project will be reoriented to more expensive products from other countries

Photo: Natalia Seliverstova / RIA Novosti

"Yandex.Market" and Sberbank have developed a concept of their market, focused on cross-border trade. It is launched in October. "The basis for the logistics model lies in the experience of Amazon," says Alex Vasiliev, director of international development at Yandex.Market. This means that the company "takes full responsibility for the logistics and delivery of the goods, for the adaptation of the content to Russian and its marketing." And although 90% of all cross-border parcels to Russia come from China, Yandex.Market decided to focus on suppliers from other countries.

The emergence of a new marketplace of Yandex.Market is in parallel with the creation of another large e-commerce player, AliExpress Russia, a joint venture of the Chinese Alibaba Group, the Russian Direct Investment Fund, MegaFon and Mail.Ru Group. The parties announced the start of the new company at the beginning of the week.

What will be different for the new Yandex platform of the Russian-Chinese conglomerate and how the two competing systems will distribute the internet trade market in Russia, was understood by RBC.

«Russian Amazon region»

In August 2017, Sberbank and Yandex announced the creation of a joint venture, the purpose of which, as explained by the head of the German Gref bank, is "to build the Russian Amazon on the basis of Yandex.Market." The possession of internet received 30 billion rubles. investments, both sides – minority interests (10% of the shares transferred to the formation of an optional fund for the team "Yandex.Market"). For the new company, three work areas were identified:

  • creating a marketplace for domestic market suppliers (the project was called "Beru" and was launched in May of this year);
  • further development of the Yandex.Market itself, which now functions as a platform for selecting goods and comparing prices;
  • the development of the cross-border online trading segment.

Turn to the west

With the name of the new marketplace, despite the early launch, Yandex.Market has not yet decided. However, as Vasiliev says, the company chose a working model and decided which niche it will take.

According to the Association of Internet Trade Companies (ACIT), in quantitative terms, after the results of 2017, 90% of foreign Internet purchases fell on China, the proportion of goods from EU countries – 3%, the US – 2%. But in money, Chinese purchases account for a much smaller share of the market – only 53%, the European Union – 22%, the United States – 12%. The total volume of the cross-border trade market amounted to 374.3 billion rubles, or 24% of all internet purchases of Russians.

It is not intended to focus on China Yandex.Market. According to Vasilyev, the company has already made arrangements with partners from India, Japan, Korea, Turkey, Israel, England, the United States. "There are many strong players in local markets who produce high-quality goods, but they do not go out to Russia with him, it is on them that we will concentrate, this is a company with a turnover of $ 1 billion a year. partnership options directly with brands, with retailers and, in the long term, with foreign markets, "said Vasiliev.

From the point of view of the delivery system, "Russian Amazon" intends to use the model of this Amazon. The schedule "fulfillment on the platform" (from the English version – execution, execution) stipulates that the seller delivers his goods to the secret (customs) warehouse of the market in Europe (from "Yandeks.Market" he is in Latvia) or to logistics hubs, from where the goods are sent to the buyer. Logistics organizes the market completely: if something happens on the way with the departure, the buyer will not complain to the seller, but to the intermediate site.

"Not all vendors are ready to organize the delivery to Russia, especially the European market, the market is not very well known to them, moreover, entering a new player is risky enough." We give the opportunity to enter the Russian brands. enter without any investment from them, with our marketing, logistics and other support that we offer them, "Vasiliev said, adding that the sellers would in principle not be able to ship the goods. For these services the site takes a commission from the sellers, as a rule this is 5-10% of the check. But what exactly the assignment in this case will be, Alex Vasiliev has not indicated.

For buyers such a scheme is advantageous because they can receive goods more quickly than in cases where the seller deals with logistics. "Our warehouses store the most popular products and the delivery to the buyer takes about two days, now the delivery time for cross-border purchases is at least 15 days," Vasiliev said.

In the case of conflict situations, many buyers communicate more easily with representatives of the market than with sellers, who often do not speak Russian. "The fact that the owners of the market are" Yandex "and Sberbank, also inspires confidence," – said Vasilyev.

In mid-2017, the managing director of Yandex.Market had already informed Maxim Grishakov that the service plans to transform into an online version of the traditional hypermarket and negotiates with warehouse staff to have its stock of goods.

How real Amazon works

  • Amazon is the world's largest online seller. The seller can act as a store and a third person who rents a trading platform.
  • According to Morgan Stanley, on average for the year, an Amazon user leaves $ 544 on the site, and the subscriber of the Amazon Prime premium service spends nearly $ 2.5 thousand.
  • Due to turnover, the company is second only to Walmart in retailers and remains the leader in online retail.
  • Amazon today is one of the most expensive companies in the world: in September 2018 the principal amount exceeded $ 1 trillion for a short time and became the second US company after Apple to overcome this brand.
  • Amazon's revenue in 2017 was almost $ 178 billion, nearly 60% of which went to North America. In 2016 and 2017, sales increased by 27% and 31% respectively. The net profit of the company in 2017 was more than $ 3 billion. In the first half of 2018, Amazon revenue reached almost $ 104 billion, net profit – $ 4.2 billion.

Cheap offer

The company also chose those categories of products that will be given priority. "Actually, it's clothing and shoes, but also smartphones and similar gadgets, and at the same time we understand that the average check on our site will be higher than on market places aimed at Chinese sellers, now the average purchase check is $ 3. about $ 30 for the category & # 39; clothing & shoes & # 39 ;, $ 100 for gadgets, & # 39; explains Vasiliev.Although the share of orders in such a price category is low: according to the ACIT data, it is the largest share (61.4%) of internet purchases in foreign stores does not exceed € 22. In the range of € 22-50 there are 22.2% of the packages, 11.6% – € 50-150, 3.1 % – € 150-500, 1.2% – € 0.5-1 thousand, more than € 1 Thousands cost only 0.5% of the purchases.

Photo: Richard B. Levine / imago / Levine-Roberts / TASS

Vasiliev does not deny that in the initial phase of the assortment there will be goods from China that will even prevail, but in quantitative and not in monetary terms.

The chairman of the National Association of Distance Trade Alexander Ivanov believes that such a strategy is justified. "In Russia there are almost no sites that could offer the buyer a huge, but high-quality product from Europe, because there will be virtually no competition in this direction," he said. As a potential competitor of the new marketplace, Ivanov could only mention the website Farfetch.com, which offers luxury clothing and accessories from Europe. But the expert is certain that the new site will not be able to relinquish Chinese goods: "In order to attract a buyer, we need cheaper goods from China and if the buyer is already getting used to the new store, he will start looking proposals from other countries. "

Redistribution market

According to Alexei Petrovsky, an expert in the online commerce market, Sberbank and Yandex will not compete with AliExpress Russia: on the contrary, they will complement each other, because they may take different niches, both in terms of geographical location of suppliers, and in terms of check assortment and average quantity.

The top management of Yandex.Market is somewhat delayed with the development and implementation of the strategy in the market segment, according to the head of INFOLINE-Analytica Mikhail Burmistrov. Half a year ago, when the competitive field was free, the joint venture between Yandex and Sberbank has serious opportunities to lose in the battle for leadership on the Russian market, he says. Such an interpretation of the interlocutor RBC explains the emergence of a large number of projects, in particular:

  • VTB and the "Post of Russia" invest more than 20 billion rubles. start testing new delivery services when building logistics centers and working with Magnit;
  • Alibaba Group has agreed to establish a joint venture;
  • Wildberries and Ozon.ru extend the range and network of issue points;
  • X5 Retail Group intends to become the leader in the postal networks.

"The idea to focus on the products of Western companies, not yet presented in Russia, sounds somewhat humorous against the background of news about the founding of Alibaba Russia," Burmistrov argues. "Today, the most popular Internet sites among the Russians are AliExpress for those who want a wide choice at a low price, as well as eBay and Amazon, who are chosen by more sophisticated and Western-oriented customers." According to him, it will be difficult for Yandex's new market game to compete with them in terms of freedom of choice and pricing. "Despite the fact that such a market in Russia does not have such a focus, the idea of ​​competing at the expense of specific suppliers sounds rather utopian, because it is a very limited niche that can be a sub-project" Beru ", but it is not self-evident that the focus on this will not damage the ambitious plans of the main site, "he said. An inadequately articulated strategy and delay in the development and testing periods endanger long-term guaranteed growth and may lead to Sberbank's demand, and if it was not a mistake to invest such funds, and the need to have other options for partnership on the online market. trade market, believes Burmistrov.

Must Read

Military announces agreement with protest movement | TIME ONLINE

in the sudan The ruling military council claims to have reached a broad agreement with the protest movement and at the same time announced...

Avengers: Endgame – usually a satisfying conclusion to a 10-year epic

By AJ Fitzwater * Avenger: Endgame There are a variety of threads that you can pull together in a...

Cenovus reports on voting results in the election of board members – Nasdaq

Cenovus reports on voting results of the election of directors NasdaqCALGARY, Alberta, April 24, 2019 - Cenovus Energy Inc. announced that at its Annual...