“Companies are leaving online shops as storefront and going to marketplaces”
Wildberries and Ozon online retailers are ready to allow self-employed on their sites
The leaders of Wildberries and Ozon online hypermarkets have hold a meeting with Tatarstan entrepreneurs, where they talked about the possibilities of placing goods of local manufacturers on their sites and the advantages of working with marketplaces before the development of their own online store. Besides, the speakers discussed whether modern business is possible without e-commerce and shared plans to launch new services and projects: for example, Ozon is planning to sell logistics separately from the marketplace next year. Read the details in the material of Realnoe Vremya.
“One of the main sales channels now is e-trading”
The business session with the participation of Wildberries founder Tatyana Bakalchuk and Ozon Group’s CEO Alexander Shulgin was organized by the ministry of economy and the Tatarstan Entrepreneurship Support Foundation.
“When we carried out analytics in the ministry, we saw the following figures: the market of e-trading is estimated at 1,7% in Russia, according to the same data, it occupies 1,3% in Tatarstan. This is such a distortion and it is really very strange, since transport and logistics infrastructure in the republic are developed, there are more subscribers for broadband access on the Internet than the number of residents in the republic, and the economy of Tatarstan is the fourth-fifth in the whole country,” Tatarstan Economy Minister Farid Abdulganiev opened the discussion. “We are asking the local business about what can be the reason, and quite often we hear this phrase: ‘We need sales.’ If 10 years ago we set ourselves the task that we need to learn how to produce something, now it is not enough. One of the main channels that is now gaining momentum is, of course, e-trading.”
Developing the topic, the head of the department told the audience that just a few hours before the meeting, the first stone was laid for the construction of two new wholesale and distribution centers of Ozon and Wildberries.
Ozon Group intends to implement the investment project for the construction of a logistics centre with an area of 38,000 square metres (the area of the first stage of the object) on an area of 10,5 hectares. The volume of attracted investments will exceed 2 billion rubles. The distribution centre of the online trading operator is to open in the third quarter of 2020, the project will create more than 1,000 new jobs. In the same year, another logistics hub with an area of 100,000 square metrers will be opened by Wildberries near Zelenodolsk. The project investments are estimated at 5 billion rubles. The social effect of the project will be expressed in the employment of more than 5,000 people.
“The fact that two leading companies in e-commerce today together have laid the first stone of the future distribution centres is a great indicator of the work of the government and the entire republican team,” moderator of the meeting, entrepreneur Aydar Bulatov commented on the statement of Farid Abdulganiev.
“The story with own online store now is not taking off today at all”
According to Alexander Shulgin, CEO of Ozon Group, “e-commerce is an extremely promising industry that transforms the entire Russian economy” and opens up great opportunities for small business development.
“Only e-commerce can stand on an endless shelf and deliver its product on almost equal terms, competing with global brands,” the speaker is sure. “As for whether a business is possible without e-trading, then without it, of course, it is better not to do. This is definitely an additional channel of sale and, most importantly, it is direct contact with the buyer.”
Wildberries founder Tatiana Bakalchuk expressed a similar opinion, saying that the online component will become an integral part of the business. Plus, it gives them the possibility to “sell for millions if you have a really interesting product”. At the same time, the entrepreneur questioned the effectiveness of the development of the own online stores.
“The story with own online store is not taking off today at all, and even giants such as Adidas or Mango, still come to that they need to work with marketplaces as sites because people still prefer to buy where there are more brands, where logistics are better built, where they can actually access a huge shopping centre without leaving home. Large companies and brands leave their online stores, literally as a showcase. With us, they have sales ten times more,” Bakalchuk stated.
In turn, Alexander Shulgin noted that in this case it is not necessary to use “either-or”, and the entrepreneur should try different sales channels and then decide what works more effectively.
Also, the participants of the business session were interested in the threshold of entry to the marketplaces and the size of the minimum investment. The latter, according to the CEO of Wildberries, are comparable to the costs of “entering any store or market”.
“The amounts, I think, may be very small. We are currently working with several banks on a system of lending, not to individual entrepreneurs, but to self-employed, and there we are talking about very small amounts — 30,000-50,000 rubles. I think we will announce the launch of the programme at the end of this year or early next year,” said Bakalchuk.
“If people have such demand, then why not”
During the session, quite an interesting question came from Nefis Cosmetics: the representative of the company was interested in whether manufacturers and entrepreneurs can use exclusively the logistics services of the sites. Shulgin noted that this year — definitely not, but “next year such opportunity may appear”.
“We're already doing things like this,” Bakalchuk said. “Basically, when we hold something together: for example, Vera Foundation and other foundations constantly cooperate with us in this way. For them, we provide logistics for free. We will think about selling these services.”
Also, the event was attended by a Tatarstan entrepreneur engaged in individual tailoring of shoes. He wondered if it was possible to sell customized products on the marketplaces.
“We are thinking about it, but we have not yet come to this. If we talk about the measurements of shoes or clothes, so far it turns out that for the buyer it will be a slight deterioration, because you will have to take a full prepayment from him. But, if people have such demand, then why not,” said the founder of Wildberries.
Also, a local entrepreneur selling seedlings addressed the invited speakers with the question: “Five years ago, my wife and I created a website, and you correctly said that now it is difficult to promote such things yourself. I always wanted to sell our seedlings — apple trees, pears, currants, and other things — to Moscow, but it does not work out. Are you considering this category of goods for placement? We will pack, we will bring to Moscow, in general, we will make everything that is required.”
“We have two models in the marketplace. The first is selling with Ozon, which is, of course, better because there will be fast shipping. The second is the sale from the seller: in this case, slower delivery, but it does not make you associate the range with what is on the site. We are not yet able to deliver such things as seedlings, but I think we will provide logistic options for almost any goods within 3-4 months,” Alexander Shulgin promised.
In turn, Tatyana Bakalchuk suggested to the businessman to meet after session and to discuss the issue in detail.