‘With Tatarstan’s customary audacity’: number of marketplace sellers rises sevenfold
2-3 years left to relatively easily enter the market of marketplaces. Then stiff competition awaits the players when they will have to know all the details and specifics of sites to stay afloat. The republic’s Business Ombudsman Farid Abdulganiyev warned Tatarstan entrepreneurs about this during AERO. Kazan conference. The forum took place together with representatives of small and mid-size businesses who were organised master classes and workshops on running a business online. Successful sellers shared business secrets and pointed out marketplaces’ imperfections. One of the main tips is to become immediately big, not to resell but deal with their own production and be at least 10% better than their rivals. Read more in Realnoe Vremya’s report.
More entrepreneurs at republic’s marketplaces
The specifics of the rapidly growing e-commerce in Tatarstan and Russia in general were discussed at the AERO. Kazan conference, which was held both online and offline. The republic was not chosen to host the forum accidentally. The number of Tatarstan stores registered at marketplaces rose sevenfold last year, from 3,291 in late 2020 to 23,098 in late 2021.
The republic managed to achieve outstripping growth compared to the average pace in Russia and Volga region: Tatarstan’s share in the number of sellers increased from 1 to 3% over the year, in the Volga region, it did from 25 to 29,5%. Tatarstan Business Ombudsman Farid Abdulganiyev supervising e-commerce development issues in the republic provided this data.
“Tatarstan is such a region that is characterised by digital transformation. And one of its tasks is to stimulate the e-commerce market. We approached this issue not a long time ago, but with Tatarstan’s customary audacity,” he noted.
“The Tatarstan president traditionally met with entrepreneurs. And one of them asked a question: ‘I make felt boots, sell them to Gulf countries, the USA. However, it is tough to enter marketplaces.’ And he asked Mr Minnikhanov to influence this situation. We analysed the petition and understood it wasn’t the question we could quickly answer,” Abdulganiyev admitted.
The creation of a task force designed to help to promote products made in Tatarstan in e-commerce became a result of a big job. An e-com development concept in Tatarstan envisaging a systemic approach to solving the problem was created. Then the government of Tatarstan adopted an e-commerce development programme for 2021-2022, which includes financial assistance measures for Tatarstan sellers and logistic companies when building distributing centres and expanding the network of product collection points. It was the country’s first regional programme of this kind.
2-3 years of growth horizon
“We understood that it was necessary to work in this area, and Marketplace. Legko e-commerce centre was created. By the way, the organisation will be one year these days. It was designed to deal with onboarding at marketplaces, and AliExpress was one of the first to respond. An expect council creating offers for the republic’s power agencies, closely cooperating with marketplaces was created in the E-Commerce Centre. As a result, joint decisions are made, difficult problems are solved, outlooks are made, prospects are considered, analytics is done,” Abdulganiyev enumerated. “We closely work with logistic companies and all market players.”
The business ombudsman admitted that there was a lot of work and reminded the audience of different support measures created in the republic: “The Tatarstan Guarantee Fund has just recently launched a new product line. The republic’s Ministry of Economy elaborated a new package of support measures. But marketplaces themselves that enter Tatarstan, the creation of logistic links is one of the main support measures.” However, Tatarstan isn’t yet happy with those figures coming from the cooperation with some marketplaces.
“Tatarstan producers hold up to 5% of sellers at the biggest marketplaces, a bit less than 2% on AliExpress. On the one hand, it is a big disadvantage. On the other hand, a big leap will obviously be made in the next months. Now we are establishing cooperation with AliExpress so that the E-Commerce Centre deals with onboarding, we will popularise the way one should work at this marketplace. But with the seeming growth prospect, experts say 2-3 years left for one to easily enter this market. Then what we see in the USA or European countries will happen when the competition will be very serious and it will be necessary to learn all the details of operation at this marketplace,” the speaker warned.
He urged Tatarstan producers, sellers to take advantage of establishing business contacts without losing time and start their sales right away.
“To add the babies for 1,4 billion to the sales turnover”
Zelenodolsk District is one of the promising territories of Tatarstan to develop e-commerce. Zelenodolsk Mayor Mikhail Afanasyev presented the territory’s possibilities for the attendees of the conference.
According to the speaker, nowadays the territory the Sviyazhsk Interregional Multimodal Logistic Centre is starting to be actively used. KazanExpress is finishing the construction of the first stage of the logistic centre. Also, another resident — Vybor company — built a plant for a billion rubles. Avgust-Agro is completing the design of its elevator.
Talking about the development of e-commerce, Afanasyev provided the following figures: Zelenodolsk District has over 4,500 SMEs, 690 of them are present at marketplaces, while the engagement index was 15% (one of the leading in the republic). The speaker also defined growth points: Zelenodolsk District can receive another 696 SMEs at marketplaces, there is potential for increasing the sales turnover of SMEs (our babies, as Afanasyev called them) at marketplaces for 1,4 billion rubles.
“As a territory, taxes are very important for us. But making sure that people are employed, they have a job is more important,” Afanasyev stressed. “And to make sure their job is as close to their place of residence as possible. Commuting poorly correlates with family life, more divorces appear,” the mayor of Zelenodolsk noted.
“Tatarstan shows surprising results”
Then experts outlined the development prospects of the sector. The COVID-19 pandemic gave a huge impulse to the development of e-commerce. As a result, the share of online orders at marketplaces exceeded 50% in 2020. These sites became one of the main communication channels with the potential buyer. According to AliExpress’s sales volumes, Russian sellers account for 36% of the turnover. It is local sales for 110 billion rubles, more than a twofold rise compared to last year’s data, said Vera Konysheva representing the marketplace’s Business Development Department in Russia. “Tatarstan shows such results we would like all the regions to show. The number of sellers and commodities from Tatarstan tripled in 2021. It is more than 2,000 stores and more than 250,000 goods,” she noted.
This means that the growth of the quantity of warehouses, pickup points whose number is becoming almost bigger than those of pharmacies, but they aren’t yet enough. Legalisation of the market is another tendency:
“Sellers are actively becoming legal because the state started to deal with the illegal market. Those who cannot adapt will find it tougher. Now it will be tougher for those who remain small. They won’t be able to bring legal supplies in containers, supply costs will be higher. While it will be easier for big players.”
An explosive growth sellers entering the marketplace is another problem, as a consequence, there is a shortage of warehouses. “One has to be at least 10% better than one’s rivals,” the experts think.
Vice Director of E-Commerce in Volga Macro-Region at Russian Post Pavel Sergeyev provided numbers: the average delivery time of parcels from Kazan to Russia’s big cities is three days. Every seller from Tatarstan sent 138 parcels via Russian Post on average a year, and this number constantly goes up.
Artyom Kazimir, head of the Regional Development Group at CDEK courier service, expressed their readiness to open pickup points in cities and districts of the republic. The tendency is so that people are ready to pay more but receive a good faster.
Tatarstan sellers’ tips
“Buyers are interested in such a product, it is still unavailable in retail stores. Our production is based in Kazan. We make 15 types of jelly, more than 10 types of rosebay, make gift boxes from our products,” he enumerated.
The entrepreneur recommended future sellers to start with the FBS and sell products made by them, not resell others’ goods. The speaker is convinced that one can start working at the marketplace even with an investment of 5-10,000 rubles to simply feel a businessman.
Co-founder of Yashel Technologies Store online store (solar batteries, generators) Laysan Devyatova selling quite a tough product from a perspective of logistics and packaging said that her husband — a candidate for technical sciences — got the idea of running such a business. She also recommends selling what you can make yourself and keep in mind that everybody wants to buy a quality good but for a low price.
“Our geographic footprint is very big. We have just recently sent a charge controller to Chukotka,” Devyatova said.
Founder of il-ai Store online store (electronics, equipment for cars) Aydar Gabdurakhmanov believes that if one deals with resale, it is important to find a niche and sell a product you are familiar with very well. Only then the business can blossom. The entrepreneur has his own online store first, but he says the orders were not made actively, once a month. As soon as several goods were placed at the marketplace, orders started to be made. The number of purchases grows month after month.
“I was surprised and happy when I saw the first orders and understood that I could sell. It is important to feel the market. Most importantly, a person should be familiar with the product,” he warned.
As for growth prospects and drawbacks of platforms, particularly AliExpress Russia, Gabdurakhmanov noted that there weren’t possibilities of delivering a good to CIS countries. Devyatova thinks the audience of the service is more aggressive than at other sites. Perhaps, because the platform was first represented by Chinese sellers, and the orders were of poor quality. She also pointed out problems with delivery. Many consider it is a prerogative of the seller and complaints about delays are sent to him without understanding the specifics of logistics a transport company carries out.