Yelena Stryukova: “It takes decades to make online sales equal to offline sales”

Russian Guild of Managers and Developers Envoy to the Republic of Tatarstan — on the growth of e-commerce, losses in the coronacrisis and the “convergence” of businesses

Yelena Stryukova: “It takes decades to make online sales equal to offline sales”
Photo: courtesy of Yelena Stryukova

Despite that the volume of e-commerce has increased several times during the crisis, it still does not exceed 10% of total sales, so, according to experts, shopping centres that lost from 20% to 40% of revenue in 2020 did not become outdated — they were again in demand at the end of the year. Developers look quite safe against the background of others. The primary market showed a growth of sales in the real estate market by 14%: the reduced mortgage rate and currency jumps played into the hands of companies. It is the hardest for hoteliers, who have almost no opportunity to host major conferences, to recover from the lockdown. However, this will pass, according to the plenipotentiary representative of the Russian Guild of Managers and Developers (RGUD) in the Republic of Tatarstan, Yelena Stryukova, because people need live communication. She told Realnoe Vremya about how different business segments in Tatarstan survived and are recovering, as well as about the next, 10th Christmas summit.

Other cities of the republic join the Guild

Yelena, how did the RGUD survive in Kazan last year? Has its numerical composition changed?

As for our community in Tatarstan, I can say that we have lived through this period together. It so happened that a few years ago I created a networking club for real estate market participants. We met several times a year, talked, played Mafia. Club members had a common group in WhatsApp to solve organisational questions. Mafia is a social game that trains the skills of discussion — for us, it is a kind of release, as well as an occasion for market participants to come together and exchange news. The group collected personal phone numbers of property owners and managers. And somewhere in mid-March, when it became clear that the restrictions would affect commercial facilities, this group had to be urgently reformed, expanded in size and renamed Rental Relations (Arendnye Reshenia).

Only now I can assess how accurate this was in the context. If we talk about the composition of the members of the Guild representation, then thanks to this crisis situation, we can say that my dream came true. We were joined by owners of commercial facilities, shopping centres, and hotel businesses from Naberezhnye Chelny, Nizhnekamsk, and Almetyevsk.

Up to this point, most of the participants were representatives of Kazan facilities. Now the Tatarstan community is represented by managers of office, hotel, retail and industrial facilities, as well as developers and the developers of residential real estate market and large real estate agencies. I consider all those who actively participate in its life, make suggestions, and share information to be members of the representation.

“There was a common position — not to keep quiet”

The situation in mid-March was uncertain: how to act and what to prepare for was unclear. As the authorised representative of the RGUD, I posted useful information to the group. For example, decisions, explanations on them and the experience of colleagues from other regions. Our group members had the opportunity to ask questions and receive answers from colleagues. So, for example, there was a situation in one of the business centres, where a case of coronavirus was confirmed and Rospotrebnadzor demanded to disinfect this building. But how? According to what protocol? We didn't have any instructions on that at the time. And all of a sudden we began to receive very specific help from colleagues from the group who had a similar experience. I was pleasantly surprised then: the representatives of objects that are usually kept apart for certain reasons joined the work (some are restrained by corporate rules, some are generally not very inclined to share information).

Last spring, all the borders associated with positions were erased, group members openly discussed their problems, shared solutions. Thanks to the group, we were always aware of where Rospotrebnadzor checkes took place, what they checked, what they paid attention to. All members of the representative office of the Guild of Managers and Developers merged in one accord! Difficulties bring us closer together, we looked for solutions to problems together, we consulted a lot.

Photo: Maksim Platonov
Last spring, all the borders associated with positions were erased, group members openly discussed their problems, shared solutions. Thanks to the group, we were always aware of where Rospotrebnadzor checks took place, what they checked, what they paid attention to

As for interaction with the authorities, we wrote four group appeals to the president of the republic. First, we asked for help on measures of state support for commercial facilities, then we offered our vision on the list of security measures under which commercial facilities can resume their work, we were asked to open them. On March 27, a decree of the Cabinet of Ministers of the Republic of Tatarstan was issued and shopping centres were closed, and they opened only on July 15.

We have interacted a lot with the Chamber of Commerce and Industry on problematic issues for our industry. Managers of commercial facilities complained about problems related not only to the coronavirus. Many were concerned about the issue of tariffs for trash pickup. The dissatisfaction was related to the tariffs, which were calculated based on the area of the object, and not the actual amount of garbage. Besides, entrepreneurs were billed for 3,5 months when they did not work and actually garbage collection was not carried out.

Photo: Ilya Repin
As for interaction with the authorities, we wrote four group appeals to the president of the republic. First, we asked for help on measures of state support for commercial objects, then we offered their vision on the list of security measures under which commercial objects can resume their work

“Shopping centres have not outlived their usefulness, the question is in the format”

How much have shopping centres and retail trade been affected?

In addition to the public position in the Guild, I manage a large portfolio of shopping centres not only in Tatarstan but also in five other regions of the Russian Federation. If we talk in general about shopping centres, then colleagues report that revenues amounted to from 60% to 80% by the year before last, losses, respectively, are 20-40%, this is very significant.

We work for a low margin, costs require the operation of commercial facilities, security, staff, cleaning. In 2020, there were rampant expenses associated with the purchase of consumables for surface treatment, providing masks and gloves to staff and visitors. Let alone shortfall in revenue over 3,5 months. And after the opening of the shopping centre, we are forced to make significant discounts for tenants until attendance is restored.

Besides, people were often ill, so the owners of shopping facilities were forced to attract temporary staff to serve the area. Most of the objects are overly indebted, and not all owners were met halfway by banks. It is necessary to fulfill obligations to banks — to pay on loans, and to the state — to pay taxes.

When trade goes online, will new large shopping centres such as KazanMall be in demand?

I have not yet seen the final figures for 2020, but according to the forecast of the Association of E-commerce Companies, the turnover of the Russian e-commerce market can reach 2,9 trillion rubles. This is about 10% of the total turnover of retail trade in the country. Despite that e-commerce has grown 11 times in the last 10 years, it will take another decade for online sales to equal offline sales.

And even then, I am convinced, there will be a place for shopping centres. Here it is more appropriate to talk about the current format of commercial real estate. Personally, I see the future for small objects that are located in close proximity to people's places of residence, in residential areas.

As for large shopping centres, the new facilities will have to seriously reconsider the role of anchor tenants and the ratio of retail space to common areas and entertainment. Kazanmall opened at a difficult time. According to the official website of the developer, at the time of opening, the shopping centre was filled by 65%. I think one can call it a success. I remember the year 2014, when new shopping centres opened with a gallery occupancy rate of no more than 30%. I am sure that the shopping centre will eventually find its tenants, and attendance can be estimated no earlier than 6 months from the start of work.

Photo: Maksim Platonov
As for large shopping centres, the new facilities will have to seriously reconsider the role of anchor tenants and the ratio of retail space to common areas and entertainment

Developers break records again

How are developers feeling today?

The Guild publishes an annual guide with brief reviews of various segments of the real estate market. At the end of December, it prepared all the reviews for Kazan. As for residential real estate, in Tatarstan, according to the results of 11 months of last year, the number of transactions under co-investment agreements increased by 14% compared to the same period of 2019. In October 2020, 3,042 such transactions were made. This is an absolute record a month for the last 3 years. It is clear that this is due to a growth of the currency exchange rate, a decrease in mortgage rates, due to the deferred demand: during the restrictive measures, there were few deals. I think most developers are more than satisfied with the results of the year.

We are concerned about the dynamics of issuing construction permits in Kazan. Last year, 47 construction permits were issued, which is by 28% less than in 2019.

In October 2020, 3,042 such transactions were made. This is an absolute record a month for the last 3 years

“There were grandiose plans for the 10th summit”

Hoteliers complain that they can not hold large events in their conference halls, which people from other cities and countries do not go to. Many people appreciated the online format and actively use it. Are you also planning to hold the Christmas summit online?

It is clear that hotels, entertainment complexes, catering have been included in the list of the most affected sectors of the economy. They lost customers, but at the same time, they got at least some support from the government. Over the past year, I have participated in many online seminars. In November, we still took a chance and held a small, chamber offline event, which was attended by 15 guests. The allotted hour and a half stretched to 2,5 hours. Then I felt how much my colleagues missed this format of communication: to discuss, ask questions live. I hope that in the summer, the restrictions will end, and hoteliers will feel what the deferred demand is. But gathering an audience today, for example, of 300 people, and tomorrow someone will find him- or herself in a hospital — no, this is a huge responsibility. It is very sad, of course, that in 2020, there was no opportunity to hold the anniversary summit in Kazan. It was supposed to be the 10th summit in a row, and I had grand plans!

We will probably hold some small press conference at the beginning of the year, but we will definitely not do the 10th summit online. Maybe we will hold it in the summer, when the epidemiological situation will be better.

By Yekaterina Ablaeva
Tatarstan