'We need to increase the number of potential buyers from Tatarstan companies to 2 billion'
Online trade turnover in Tatarstan has increased fivefold since the beginning of 2021 — up to 18,5 billion rubles
At the briefing in the Cabinet of Ministers of the Republic of Tatarstan on 7 September, dedicated to the development of electronic commerce in Tatarstan, it became known that by 2024, the authorities of the Republic of Tatarstan planned to increase the number of people employed in the field of SMEs to 730,000 (now about 700,000, but this is together with the self-employed). The coronavirus pandemic revealed the sudden leadership of Tatarstan in online trading, as a result of which many jobs appeared in the logistics centres of the Ozon and Wildberries marketplaces near Zelenodolsk, and entrepreneurs began to enter online platforms en masse, which led to the growth of their businesses — for this, special attention will be paid to the development of electronic channels for promoting Tatarstan goods. According to Rustem Sibgatullin, the first deputy minister of economy of the Republic of Tatarstan and director of the Department of Entrepreneurship and Competition Development, since the beginning of 2021 alone, the turnover of online trade in Tatarstan has increased 5 times, amounting to 18,5 billion rubles. The role of electronic channels is growing, this is obvious, the ministry noted. About how Tatarstan producers will be promoted on marketplaces and help them financially — read in the material of Realnoe Vremya.
Moreover, this trend is global. Buying online has become a familiar way for many residents of the Republic of Tatarstan, the pandemic has only accelerated the pace and has become an impetus for the growth of e-commerce industry in the republic, Rustem Sibgatullin said.
For example, according to the data of the five largest Russian marketplaces, the number of online sellers among entrepreneurs and companies of the Republic of Tatarstan increased 4 times in 8 months of 2021 — up to 12,500.
According to Rustem Sibgatullin, due to the pandemic around the world, the share of e-commerce increased from 13% to 18%, the volume of sales — by 24%, amounting to $4,3 trillion. Russia entered the top 10 countries in terms of e-commerce growth rates, in the Russian Federation, the growth of online commerce was generally 57%, and the market volume increased to 2,7 trillion rubles — this is already 9,6% of total retail. According to analysts, by 2025, the online trade turnover in Russia will grow by another 4 times, amounting to 11 trillion rubles. Online trading is developing even more actively in Tatarstan: here the growth in 2020 amounted to as much as 93% by 2019, and in the first half of 2021 the republic grew by another 40%.
“Among the advantages of online trading: expanding the geography of sales, endless product shelf, and for consumers — competitive prices and virtually round-the-clock operation of the store," said the deputy minister of economy of the Republic of Tatarstan.
“Our bottlenecks are difficulties with delivery for manufacturers in the districts”
But there are also difficulties, including for entrepreneurs of Tatarstan, whose products are not yet presented on marketplaces like Ozon or KazanExpress, not to mention Amazon or Chinese Alibaba. In particular, businesses are faced with the need to choose the online platform they need, think through logistics schemes and generally lack of experience. Business Ombudsman Farid Abdulganiev calls the lack of the necessary personnel and competencies, the lack of necessary amount of warehouse space, the problem of the “last mile” among the factors that are holding back the growth of online commerce in the Republic of Tatarstan. According to him, they need to be solved in order to fix the leadership of the republic in the field of e-commerce in a short time lag of 2-3 years, for which the authorities of the Republic of Tatarstan want to increase the number of sellers from Tatarstan on marketplaces by at least 3 times.
“Our bottlenecks are difficulties with delivery for producers in the districts," said the commissioner for the rights of entrepreneurs. “There was a case when an Almetyevsk manufacturer complained to us that he had to take his goods to one of the logistics centres in Zelenodolsk [KazanExpress, Ozon and Wildberries centres are now located there — editor's note], although then the product after its purchase on the marketplaces is still returned to Almetyevsk. For our part, we have asked the marketplaces to increase the number of product reception points.”
“E-commerce has created more than 33 million jobs in China, plus 50 new professions”
The issue of logistics and cargo transportation has not yet been resolved, Abdulganiyev admits. The cost of delivering goods can eat up the lion's share of the margin for SMEs. Besides, during the pandemic and after it, Tatarstan suddenly felt a sharp shortage of storage facilities: the business ombudsman receives two or three messages a week from major Russian players who would like to but will not be able to enter the Tatarstan market — they simply do not have enough space for rent. This problem, said Farid Abdulganiev, cannot be solved without the involvement of developers from other regions of the Russian Federation. There is also a shortage of special personnel and competencies for working with marketplaces and online promotion — many specialties have appeared only in recent years, most companies, of course, do not have such personnel. The E-Commerce Centre, established in the Republic of Tatarstan in March this year, will try to solve this problem through training and business marathons on short-term courses in all regions of the Republic of Tatarstan. Realnoe Vremya newspaper has recently reported about them. On the basis of resource centres, it is necessary to train different specialists separately, so, online revealed a shortage of storekeepers and account managers.
“E-commerce has created more than 33 million jobs in China, plus 50 new professions. 'Life-streamers', for example, promote products online around the clock. In 2021, according to experts, they will add $312 billion to the Chinese economy. In Russia, the “life-stream” mode has been launched at Ozon and AliExpress. But we don't have specialists yet, although the format already exists," says Yuliana Gordon, the chairman of the expert council of the E-Commerce Centre, founder of iWENGO school of e-commerce.
At the same time, the Ministry of Economy of the Republic of Tatarstan insists that already now many Tatarstan goods can compete even with Russian, even with world brands. To speed up the process of involving thousands of representatives of SMEs and the self-employed, a working group on the development of e-commerce market in the republic was created by the order of the President of the Republic at the end of 2020, and in March, the E-Commerce Centre was launched. The Working Group has already developed an action plan for the development of online commerce in 2022. It also includes the development of the infrastructure of online trade (warehouses, logistics centres, transport, etc.), the expansion of the geography of reception points (see the example with the Almetyevsk businessman) in the Republic of Tatarstan, even more active cooperation with logistics companies.
And, finally, assistance with registration on marketplaces (outside of Tatarstan, this service costs from 25 to 250 thousand rubles — in the Republic of Tatarstan they promise to do it for free), consulting, promotion and support of Tatarstan entrepreneurs and goods in general, providing them with financial and non-financial assistance in placing on online platforms. Speaking about the financial side of the matter, the Ministry of Economy of the Republic of Tatarstan said that they are already working on the possibility of issuing preferential microloans and even subsidising logistics costs. This should return to the budget of the Republic of Tatarstan a hundredfold: for example, for eight months of 2021, 3,000 SME entrepreneurs who started working on online platforms this year received revenue of 68,5 billion rubles-despite the fact that for the whole of 2020, the turnover of their enterprises did not exceed the mark of 60 billion rubles.
“We need to increase the number of potential buyers for Tatarstan companies from 10 thousand to 2 billion”
The new development programme and the E-Commerce Centre itself (Realnoe Vremya newspaper regularly wrote about its opening and operation) set themselves the task: to increase the number of potential buyers of Tatarstan goods from 10 thousand to 2 billion people. Where do these figures come from? According to the business ombudsman Farid Abdulganiev, 10,000 people is the average number of potential buyers at a store in an average district of Tatarstan (such data was obtained by the authorities of the Republic of Tatarstan). If a manufacturer or a store reaches the level of a region, it, of course, receives up to 4 million potential buyers. If Russian — 57 million people. With the expansion of the geography of the marketplace, the number of such buyers is also growing: there are already 90 million in the CIS, 2 billion people on the international market.
“Our task is to increase the number of potential buyers of commodity producers of the Republic of Tatarstan from 10 thousand to 2 billion people," said Abdulganiev.
However, he noted, this task must be solved before 2024-2025, since at today's growth rates in two or three years, competition on marketplaces will become critical, the time lag in order to have time to jump into the “online car” is very limited. Therefore, the employees of the centre began to actively train businessmen in the regions of the Republic of Tatarstan, having already covered 16 MOs, where 3,000 people took courses, another 12,500 representatives of SMEs were consulted by the centre.
“It has happened that in four days an entrepreneur has not only registered on the marketplace, but already goods in his warehouse have run out!” the business ombudsman remembered.