E-commerce is a low initial investment business model of the 21st century, when business transactions are often made through the Internet. It has made the on-line business quick, easy and convenient. The benefits of E-commerce are greater flexibility, lower marketing costs, open business 24/7, wide geographical reach and reduced overheads.
E-commerce is also very helpful for building an online market potentiality or to increase an existing market position, by providing a cheaper and more efficient distribution chain for their brands, merchandise or services.
It helps operate business and keep it open for 24/7.
It helps to reach more customers.
It helps to showcase the product in the most effective way.
It helps to provide the customers with the most convenient way to buy the product
It helps to gain edge over the competitors.
It helps to kick start and deal with the business in an easier way.
There is an impressive and long list of benefits of e-commerce for entrepreneurs as well as for consumers.
Of course for a website to be efficient it should have a list of qualities, as the following:
User Friendly Design
Easy Navigation Path
Customized Design that suits the business the best.
CMS (Content Management System)
Custom E-Commerce Shopping Cart
Multiple Payment Options
Multiple Payment Gateway
One Page Checkout
Secured and Cross browser compatibility
E-commerce market in Russia is in it developing stage, but the development is going at a rather fast pace. The domestic e-commerce market in Russia increased from 560 billion roubles in 2014 to 650 roubles in 2015. It now accounts to 2 percent of the total retail industry in Russia, so there is still great growth potential. And while the domestic market is slowing down, cross-border purchases continue to grow rapidly.
About 160 million small packages and parcels were sent to online consumers in Russia in 2015, which is an increase of 10 percent compared to 2014. The domestic online retail market increased by 16 percent to reach 650 billion roubles, or 7.32 billion euros. So everything indicates that e-commerce has been growing rapidly in Russia.
The share of food and drink e-commerce is not that big at the moment and constitutes only 2%, but there is an obvious potential for the growth in this area. There are several indicators for this growth.
First of all, Russia has always traditionally been a tea drinking country and the off-line tea retail figures prove it. Traditionally tea has been an integral part of Russian life since XVII centaury.
The figures show that even of economic conditions fail to blunt Russian appetites for this kind of drink.
Secondly, there is a sufficient presence of on-line Chinese tea shops in Russian internet and a great number of blogs devoted to the product. but sadly that can’t fulfil the demand of the market for the low-quality reasons.
Lastly, judging from the data gathered through Yandex Wordstat the popularity of green tea in Russia is enormous and there is great potential for the on-line trade in this area.
There are several know-hows introduced by the both projects that could be implemented in the Chaaguan project.
One of the most vital and important values for the Chaguan project should be:
offer authentic tea from the exotic region, known for it’s tea culture
provides adequate variety of green, black and Pu-erh teas
offer reliable delivery
provide educational information on the company’s website (information should be arranged clearly and logically for the best customer experience)
made website UX friendly and aesthetically attractive (it would allow establish unique for Russian internet relationships with customers)
not to make it too explicitly commercial
offer variety of reliable payment solutions
to make business profitable retail margin should not be lower than 100%
Scope and Limitations of this Research
Although the research more or less has reached it aims and the main structure of the future business has been created, of course there is a number of limitations.
First of all, statistical data can be interpreted in many ways and does not prove that certain conclusions will actually take place in real future. Planning is a good thing for business, but of course it can’t substitute the real problem solving. The real work and further analysis should not be neglected.
Secondly, the proposed plan is a rough model of the future business that should be adjusted to the changing conditions and new discoveries during the business development. The real world financial or economic situation can increase he structure cost.
Lastly, customers are real people whose behaviour might drastically differ from the proposed model. In this case a number of quick and rational adjustments are vital for the project’s success.
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Figures: 10 million people are currently involved in loyalty programmes.
Ownership: Its co-founders, St. Petersburg entrepreneurs Alex Nikitin and Sergei Fedorinov. In 2008, Nikitin’s company “Kimbrig” bought bankrupt “Ultra Electronics” and opened the first “Ulmart” store. 2 years later, the project raised investment: 60% of the business is now owned by Dmitri Kostigin and Avgust Meyer, who formerly owned “Lenta,” while 40% belongs to Nikitin and Michael Basinkevicha. Fedorinov holds the post of general director.
Business: Sells “everything you can plug in to the mains”. You can order the product on the website, by phone or go to stores themselves.
Last Year: More than 400,000 orders were delivered directly to customers.
#2 - Citilink
Revenue: $868 million
Founded: 2008
Website: Citilink.ru
Employees: 3000
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Figures: CitiLink's website has a daily audience of 277,258.
Ownership: Citilink is the retail distributor of Merlion computer equipment. Merlion’s annual revenue is $3.5 billion, putting it in 40th place in Forbes 2013 list of top Russian companies. Ownership details are not disclosed, but it is known that one of them is the co-owner of Rising Bank, Oleg Karchev. In his only interview with Kazan portal “Business-Online” he admitted that Merlion has 3 shareholders with blocking rights, but that the distribution of shares is classified information.
Business: The company positions itself as a discount electronics provider where you can order online, by phone or in stores.
Last Year: The company opened 90 new points for collecting and ordering products.
#3 - Wildberries
Ownership: English teacher, Tatiana Bakalchuk, decided to make money by reselling clothes from the German catalogue, “Quelle & Otto,” so in 2004 she opened a fashion clothing online-store. Today Wildberries is the largest online clothing and shoe store in the country. According to reports by SPARK, 100% of the company belongs to Bakalchuk, but the company claims that Bakalchuk’s husband Vladislav also holds a stake, as does Sergei Anfriev.
Business: The site holds over 1000 brands and ships for free all over Russia.
Last Year: In July the online retailer expanded into Kazakstan.
#4 - Ozon
Revenue: $350 million
Founded: 1998
Website: Ozon.ru, Sapato.ru, Ozon.travel
Employees: 2270
Figures: 1.7 million air and rail tickets sold by Ozon.travel in a year.
Ownership: The company was established by St Petersburg software company
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“RekSoft” and publishing house “Terra Fantastika;” but now the main shareholders are portfolio investors Baring Vostok Capital Partners, Index Ventures. ru-net, Rakuten, Intel Capital, Holtzbrinck and Cisco. At the end of 2013 it looked like Baring Vostok were looking to sell their blocking stake.
Business: Ozon sells 2 million types of products online, and also acts as an online ticket agency and hotel agency in Russia. The holdings gross turnover increased by 150% in 2013 to $750 million.
Last Year: Ozon completed an integration with online shoe shop Sapato.ru, which has now also started to sell clothing. The company announced that it will invest
$28 million over 2-3 years into a loyalty scheme.
#5 - Biglion
Ownership: The main owners are Vladimir Vinogradov, Oleg Savtsov and his wife Irina. They created the company after leaving their posts as top managers at RBC Media holding. Savtsov was deputy general director and Vinogradov headed the service RBC Money. Minor shareholders include investment fund ru-Net, Leonid Boguslavski and Tiger Global Management.
Business: Biglion were created as a clone of popular voucher service Groupon, where consumers can buy discount coupons and the site receives commissions from service providers. Several years ago Biglion began selling discount electronics and household goods.
Last year: The share of trade in the company’s revenue increased from 30-50%.
Figures: According to experts, $10-15 million of investment was received in 2013.
Ownership: Valeri Kovalev was in charge of the company up until 2013, owning
71% of Holodilnik, with Dmitry Formichev owning the other 29%. Now the whole company belongs to Cypriot offshore company, Gelance Enterprises Ltd.
Business: The company started selling domestic appliances offline in 1993. Now offline only contributes 30% of total revenue. Most of the company’s income now comes from Moscow and St. Petersburg, but in 2013 the company started to actively expand into Russia’s regions.
Last year: On sister-site Superholodilnik.ru, customers can now view 3D images of over 10,000 products.
#7 - Technopoint
Revenue: $260 million
Founded: 2011
Website: Technopoint.ru
Figures: 90,000 daily visitors, according to LiveInternet.
Ownership: Technopoint was created by the owners of electronics retail chain DNS, which was founded in Vladivostok. According to SPARK, the main shareholders in Technopoint are resources director Sergei Meschanyuk and DNS bosses Dmitry Alexeev and Yuri Karptsov.
Business: Technopoint sells digital and household appliances. Orders can be taken online or via stores. Their strategy is to have the lowest prices in town.
Last year: Technopoint opened stores in 22 cities, starting in the Far East.
#8 - Enter
Revenue: $207 million
Founded: 2011
Website: Enter.ru
Employees: 2300
Figures: 3.7 million orders a year; 2.7 times more than 2012.
Ownership: Enter is owned by Svyaznoy president Maksim Nogotkov and
former director of telecoms network MTS Sergei Rumyantsev. Rumantsev is now Enter’s CEO.
Business: Enter sells consumer goods, from household appliances to furniture sets, online and offline. Online orders represent 60% of revenue. 51% of their revenue comes from Russia’s regions. Enter now has 128 offline stores.
Last year: Enter opened a 62,000 square meter warehouse and expanded into the Southern and Volga Federal Districts.
Figures: Around 700 people got a “220 Volt” tattoo at the same time - an event that was entered into the Guinness Book of World Records.
Ownership: 220 Volt is a daughter company of “North-West,” which sells
construction tools in bulk. It is owned by Lyudmila Andreeva and holding company
“Merkuriz World Limited” (registered in the Channel Islands).
Business: Under the brand name 220 Volt, they have a retail chain and online shop. The company claimс that revenue from online selling exceeds offline sales.
The store specialises in the sale of power tools, garden and construction equipment, lighting products and security systems, offering a total of more than 6,000 items.
Figures: 30,000 goods in their catalogue.
Ownership: Utkonos was founded by St. Petersburg entrepreneurs Alex Nikitin and Sergei Fedorinov. In 2008 Nikitin’s company Kimbrig bought bankrupt Ultra Electronics and opened the first Ulmart store. 2 years later, the project raised investment: 60% of the business is now owned by Dmitri Kostigin and August Meyer, the former owners of supermarket chain Lenta, while 40%
belongs to Nikitin and Michael Basinkevicha. Fedorinov holds the post of general director.
Business: Sells “everything you can plug into the mains”. You can order products on the website, by phone or go to physical stores.
Last Year: More than 400,000 orders were delivered directly to customers.
Figures: Founder Oskar Hartmann aims to raise no less than $125 million in case of an IPO.
Ownership: KupiVIP was created by Oskar Hartmann, based on French internet company Vente Privee, which was founded in 2001. KupiVIP has more than 10 portfolio investors including; Intel Capital, Accel Partners, Mangrove Capital Partners, Acton Capital Partners, EBRR and more.
Business: KupiVIP.ru sells clothes, shoes and accessories from famous brands’
past collections at a discount.
Last year: The shopping club introduced direct shipping from Los Angeles and New York.
#12 - Pixel24
Revenue: $150 million
Founded: 2009
Website: Pixel24.ru
Figures: 2218 customer reviews on Yandex.Market, around 7% of which are negative.
Ownership: Pixel24 is an unknown quantity for both investors and experts. On its website it says that it is registered as “F-Stor”. According to SPARK, it is owned by Alexei Frolov and Sergei Chechetkin.
Business: Pixel24 specialises in electronics, in particular products connected with photography and film, along with their accessories. In Moscow Pixel24 offers express delivery.
Last Year: The online shop was connected to the credit system “KypiVcredit”
allowing customers to receive up to $5500 in credit.
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Figures: 145,000 products in 300 categories, available online.
Ownership: E96 was created by Boris Lepinski and Dmitry Pivovarov from Ekaterinburg. In the Autumn of 2012 51% of the online store was bought by Ulvi Kasimov’s fund IQ One. There is a planned merger for 2014 with “Yutinet.ru”, in which IQ One also owns a controlling interest.
Business: The company relies on sales of large machinery and is based in a few regions; Ekaterinburg, Tyumen, Chelyabinsk, Perm, Ufa, Novosibirsk and Rostov-on-Don.
Figures: The record single spend on the site was over $15,000 for 187 items.
Ownership: In December 2010, German entrepreneurs Nils Tonzen, Florian Yansen, Burkhard Binder and Dominic Piker founded online fashion retailer Lamoda. They are all managers of the company, but their share in it is unknown.
Lamoda has also received investment from Access Industries, JPMorgan Chase and others.
Business: Lamoda specialises in the sale of clothes, shoes and accessories.
Their site includes 1 million products from 1000 brands. Lamoda have their own warehouse in Moscow and a delivery service that includes 25 cities around Russia.
Last Year: In June, Lamoda attracted $130 million of investment from Access Industries followed by a further $10 million from the World Bank’s IFC fund at the start of 2014.
#15 - Vseinstumenti
Revenue: $135 million
Founded: 2006
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Website: Vseinstrumenti.ru
Employees: 850
Figures: 25,000 assorted products.
Ownership: Vseinstrumenti.ru, was created by Alexander Goltsovi, Nikolai Gudovski and Victor Kyzenetsovi, who met while studying at Moscow Physical and Technical Institute (MFTI). They still own the company. Since 2011 several rounds of investment have been received from Zoom Capital.
Business: The online shop specialises in building equipment, air conditioning and garden tools. They have stores in 53 regions in Russia.
Last year: Vseinstrumenti opened a store just outside Moscow selling display, defect or package-less goods at a discount.
#16 - Sotmarket
Revenue: $111 million
Founded: 2005
Website: Sotmarket.ru
Employees: 900
Figures: 10,000 calls dealt with daily
Ownership: Sotmarket was created when 11th grader, Vsevolod Strakh started to sell USB cables through his own site; sending orders via post and using profits to extend his range of products. In 2012 venture fund Ulvi Kasimov’s fund IQ One bought 51% of Sotmarket.
Business: The online store specialises in trading electronics, their accessories and small appliances. 85% of the sales from their 120,000 products come from small regions.
Last year: Kasimov announced plans to merge Sotmarket with his fund’s other e-commerce assets Yutinet.ru and E96.
Figures: VIP delivery takes up to 3 hours.
Ownership: Its co-founders, St. Petersburg entrepreneurs Alex Nikitin and
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Sergei Fedorinov. In 2008, Nikitin’s company “Kimbrig” bought bankrupt “Ultra Electronics” and opened the first “Ulmart” store. 2 years later, the project raised investment: 60% of the business is now owned by Dmitri Kostigin and Avgust Meyer, who formerly owned “Lenta,” while 40% belongs to Nikitin and Michael Basinkevicha. Fedorinov holds the post of general director.
Business: Sells “everything you can plug in to the mains”. You can order the product on the website, by phone or go to stores themselves.
Last Year: More than 400,000 orders were delivered directly to customers.
#18 - Notik
Revenue: $79 million
Founded: 1999
Website: Notik.ru
Employees: 110
Figures: More than 1500 types of laptops, tablets and smartphones in stock.
Ownership: Equally shares are held by CEO Andrei Shatrov and Yuri Zhizhin.
Business: Notik started selling laptops online via Bestnotebook.narod.ru. In 2002, they opened up their current site, Notik.ru. In 2004, they introduced a delivery service. Besides laptops and tablets, Notik sells phones, e-books and related
Business: Notik started selling laptops online via Bestnotebook.narod.ru. In 2002, they opened up their current site, Notik.ru. In 2004, they introduced a delivery service. Besides laptops and tablets, Notik sells phones, e-books and related