Gestión de los Recursos Humanos

– Do you intend to open your logistics capacities to third parties in the future, as did Ozon, KupiVip, the Otto Group and some others?1

We haven’t done it so far. Yet this could indeed happen in the future – but only in the form of Ulmart-branded items. We have experimented in this area already with car parts: a large percentage of them come from third parties.

– What proportion of your sales go through the “cybermarkets,” and do you consider these sales online or offline?

Some 25% of all orders are placed via “in-cybermarket” terminals, with the rest coming via tablets, PCs and the increasingly popular mobile option. Around 10% of orders are generated via the call centers ; 60% are picked up in the cybermarkets, with 27% going through classic pickup points and roughly 12% via last-mile delivery.

We consider these sales 100% online, since they are made via a virtual storefront. No matter how the virtual storefront is used – on your personal computer, on your mobile or on the computer screens of our “cybermarkets” – without the Internet there is no way to order anything from our platform. Even the call center dispatchers use the company platform.

– Over the past two years Ulmart has asserted itself as the the number one online retailer in Russia, with $1.3 billion in revenues in 2014 (1). How did you reach such a result?

There have been two main factors. First, our very deep faith in the possibility of reaching any goal by some means – in the sense that we were ready to invent new models, and actually did so.

The second reason lies in the success of our integrated model, which combines the best of online with the best of offline and organizes optimal synergies between them.

Needless to say, building our offline and online capacities in both sales and fulfilment required a huge investment. Please note that I’m saying “investment,” not “expenses.”

– More than others, the consumer electronics segment has been hit hard by the crisis. To what extent has this affected your sales? Do you still hope, in this context, to continue fast growth in 2015?

While consumer electronics is dropping all across the market, the strategic decision we made over a year ago to begin aggressive expansion in new categories like DIY, auto, kid’s stuff and home items is proving to have made our electronics catalogue almost, in a sense, crisis-proof.

Yes, the overall slowdown in the economy will have an effect; but we feel that we will still be able, in dollar terms, to grow the company. By how much – we will have a more accurate prognosis only after our half-year sales figures are in.

– Last year you began significantly diversifying your business with investments in online musicand other digital content, online travel and satellite TV distribution… What’s the strategy behind this? Do you see yourselves becoming a new Amazon?

There is, indeed, a general intention like that. But a key difference with Amazon is that in our marketplace, everything is managed by us and under our brand. The reason for this is that, in our view, loyalty is a key success factor. Loyalty requires quality service – which requires us to control the entire process.

– Many Russian e-commerce sites run losses. Is this the case for Ulmart?

We have lost money so far, but this was part of our strategic plan. This year we’ll turn profitable. Still, we have no intention of displaying maximum profits at the expense of investment.

– Last year you held discussions with western investors. How did they end?

We did receive an offer, but we were not satisfied with the terms. As a matter of fact, we don’t have a critical need for investor money. We’re close to breakeven – and we can reach it by lowering the volume of our investments. In addition, our shareholders have the capacity to support us.

– Now you intend to go public on a Western exchange. Is this the right moment?

The IPO would not take place before 2016. We’re anticipating that the context might change for the better before then – or at least the situation in Russia may become more stable. People will then see that this country is interesting to invest in.

We’re not considering an IPO as a goal in itself. We are willing to raise money to continue developing a great and very attractive company. This money could come from private investors as well – should their terms be acceptable. In that case there would be no IPO.

– Some Russian online retailers have begun selling abroad – or are considering doing so. Do you have any such plans?

We have no international expansion plans. Keeping focused is an important success factor. We haven’t even developed a strong presence in Siberia yet. Instead of geographic expansion, I believe we should continue enlarging our assortment.

– Chinese online retailers – first and foremost AliExpress – are invading the Russian market. Do you have anything to fear from them?

I like healthy competition. Pressure from Chinese players will force many Russian companies – including ours – to improve their processes. And this market is big enough for all! By the way, the notion that we will integrate Chinese players into our system has not been ruled out.

(April 2015)

E-COMMERCE IN RUSSIA

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