Ozon to open express food delivery service in Kazan

Who will compete with Samokat and Yandex.Lavka

A new big player — Ozon Express — is entering the express food delivery market in Kazan. Director General of Ozon Alexander Shulgin told Realnoe Vremya about plans for expanding the business in Tatarstan. In an exclusive interview with our newspaper, he noted that in the following two years, according to entrepreneurs and buyers’ demand, Ozon would open logistic infrastructure facilities. After a fulfilment centre on an area of 22,000 square metres, which became the main hub of the company in the Volga region, opened in Zelenodolsk Industrial Park, the task of conquering the market gets a bit simple. Also, in the region, the company has five distribution centres, its own courier service, which is in general a good foundation to set up the express delivery service.

Firstly, the service will be launched in Kazan. And if the service proves to be popular, it will be introduced in other cities of the republic too. Shulgin thinks that the company has a number of edges over its rivals:

“Here the assortment is very big, 15,000-20,000 unique goods. It is foods, everyday goods, books, over-the-counter drugs, goods for children, beauty products and other popular products that are delivered within an hour.”

Big dark stores with a convenient location

Dark stores are necessary to launch the service in Kazan. It is special warehouses where goods are stored and quickly fulfil orders. The company thinks that the dark stores are the main difference of their service from similar ones: the area of such warehouses is about 2,500 square metres, which allows storing tens of thousands of products — from foods to expensive electronics.

The company doesn’t comment on how many dark stores will open in Kazan. The press service just shared information about the format of such warehouses and what they would store. It is usually a leased building with a good location where it is convenient to organise a fast delivery. Such a facility must have areas with different temperatures: frozen zone, ultra fresh, dry storage, bakery.

The representative of the marketplace also told Realnoe Vremya that the company was actively looking for suppliers among local producers, including small and mid-sized business representatives. So they will have a new outlet.

Ozon’s express delivery service appeared in Moscow in late 2019. Large-scale regional expansion has started this year — in June, the project arrived in Saint Petersburg, in September, it did in Tver. Now the total area of the company’s dark stores is over 35,000 square metres.

The Kazan authorities claimed that they were positive about the arrival of big players in the e-grocery market considering that the market has room for everybody.

“Ready food delivery services were spread more. I am sure that other companies that will promote such services will come too. However, I think that firstly they won’t be rivals for each other. Nowadays, given the development level of e-commerce, the market is just developing, and the market is so big that there will be room for everybody. But if others enter the market, and their number is as big as possible, it will be easier to push the culture of the service for the population.”

“Demand for such services is high”

Vice Director of A-Development company Vladimir Shaykhiyev told our newspaper that the company had been holding talks about a desire of launching express delivery in the Tatarstan capital for long and already saw areas for dark stores. He thinks that it is a promising area for business development.

“There is demand for such services, it is high, judging by the number of Samokat couriers in the rosy uniform in the city streets. What will play a role? Competition envisages improvement of some conditions, that’s to say, the company has to win somewhere: in the assortment, prices, the freshness of food, speed of delivery, coverage of the city. For instance, the coverage of Samokat is wider than that of Yandex. Everything will depend on the format and the coverage they plan. But in general it is an absolutely competitive topic. People perfectly remember the pandemic when delivery became very popular. And I think that Ozon will certainly cope with as well as its rivals.”

Shaykhiyev assumes that the new player will take some share of the e-grocery market away from its rivals if it offers Kazan citizens better service.

Authorised representative of the Russian Guild of Managers and Developers in the Republic of Tatarstan Yelena Stryukova noted that much turned on the company’s strategy.

“The distribution of shares of the market of delivery of basic products will depend on the effectiveness of the business’s logistic model. The correct ratio of its own car fleet, couriers, warehouse and distribution centres will mainly determine the development in this segment.”

Director General of Reagency Yury Chikirov is convinced that the growing competition is always good for consumers. Also, the needs for fast delivery services allow using the areas that weren’t very popular earlier. However, to compete with Yandex.Lavka and Samokat, it is necessary to understand what range of products a consumer needs.

“An hour delivery, I think, is 3-4 times worse than the indicators announced by Yandex.Lavka and Samokat, here another peculiarity or uniqueness of the offer are needed. To assess the market share, it is necessary to understand the allowed effectiveness of indicators of a point, much depends on the rent rate. All good cheap offers were already occupied by competitors, and the problem is to either outbid price terms or reduce the economy of Ozon’s product distribution point.”