Is it possible to fall in love with the country in 2 days and not just with the landscape, architecture and people, but also with opportunity to build business here? Yes, it is! Proved by organizers of Trade Mission to Ukraine for Mail Order and E-commerce companies which was held in Odessa on September 20-21, 2012.
The idea to hold the event for distance selling companies, of course, appeared not from scratch. Geographical position, retail unsaturation, ready to purchase consumers, experienced contractors and availability of corresponding infrastructure make Ukraine to be an interesting “option” for business development of European and Russian companies. That is why it was made a decision to show the market from the point of view of “utility” for distance selling and E-commerce companies: from legal / tax / customs possibilities for the market entering, through specifics of Client Service in CC and delivery, to marketing on- and off-line activities. And, of course, all possible statistical and analytical data on volume of the market, on specifics of payments, on characteristics of consumers, postal and printing issues were mentioned. Such a variety of lightened questions allowed participants to receive a complete picture on the possibilities and prospects of doing business in our country, and that the most important thing – to get personally acquainted with potential partners and “in loco” to ensure their competence, knowledge and reliability.
Format of the Mission was originally set to “no ties” and it was underlined from the beginning: the Mission was opened with traditional round loaf and lyrical Ukrainian song performed alive by Svetlana Rubanovich, the leader of the folk ensemble “Kalina”. Then Rainer Shtaltner, General Director of the Ukrainian-Austrian-German terminal “Novolog”, who has been working in Ukraine for more than 20 years, shared his experience of “immersion” into the country and described what foreign businessmen should expect and what they cannot even imagine. Since Mr. Shtaltner rightly considers himself to be Odessa citizen, jokes in his magnificent performance made participants feel positive tonality.
Position of professional associations is always “above” the market. In this case, lack of commercial interests makes it possible to provide information openly and in non-engaged manner. Therefore, the general market overview was presented by representatives of three associations: the Ukrainian Association of Direct Marketing (Julia Pavlenko, Executive Director), the Slovak Distance Selling and Direct Marketing Association (Juraj Sebo, President of the Association) and The National Association of Mail Order and Distance Selling Trade (Alexander Ivanov, President of the Association.) The report showed the market from both inside and outside. And the view from the outside was from two sides – from Europe and Russia. All the speakers agreed that annual growth rate of Ukrainian distance selling/E-commerce market is more than 30% and that its volume for 2012 will be about 1.4 billion Euro.
Topic of market analysts purely in E-commerce sector was continued by Vadim Pilipenko, Deputy Strategic Marketing Director of Aukro-Ukraine. Vadim rightly got the title of speaker who received the highest number of questions, as the variety of analysts on the market, its main players, consumers, their motivations and development perspectives are really due respect!
The second block of the Mission was focused on algorithm of market entrance and was presented by Valentin Kalashnik, Director of OS-Direct Marketing Group, President of the Ukrainian Association of Direct Marketing, a person who has successfully launched business of more than 10 distance selling companies in Ukraine. Valentin examined in details all basic stages of business startup and highlighted key points which need one’s attention in the process of market entering:
- Preparatory works before entering
- Fulfillment and Logistics
- Financial transactions
- Customer service in CC
- Offline marketing
- Online promotion
Reports by Dmitry Seleznev, Strategic Development Director of PGK Groupe, and by Pavel Bogdanov, Marketing and Strategic Development Director of USEP “Ukrposhta”, dealt with logistical aspects market entrance process. Specifically they compared pros and cons of consignment and direct import, key market players and possibilities of high-quality goods delivery to Ukraine as well as to final consumer organization.
Despite the relaxing atmosphere of a dinner at the Black Sea beach under soft rays of mild September sun, all of the participants were well aware of the main purpose of their visit and found strength to return to the conference room and to listen to the reports of the block “Market Entrance”. And it was the right decision! Victoria Sivokon, recognized expert in the distance selling field with many years of practical experience (“Ukrposhta”, “Eshko”, “Family Leisure Club”, Readers Digest Ukraine), Vice President of UDMA on postal issues, focused on all the pitfalls waiting distance selling companies on the Ukrainian market. Victoria’s presentation contained seven subjects and applicable advices – from nuances of outsourcing to drawings performance’ subtleties.
Natalia Vinogradskaya, Strategic Marketing Director of Book Club “Family Leisure Club”, presented the results of marketing strategies comparing of Ukrainian and German colleagues. Despite geographical proximity consumer portrait and perception of creativity in marketing materials, attitude to brand’s reputation, and even qualifications and conditions of marketing specialists performance differ, which undoubtedly must be taken into consideration while entering the market.
Detailed and particular description of Ukrainian consumer was given by Jaroslav Pelykh working for consulting company NSBC. The report gave understanding not only of who and what buys in Ukraine, where he or she lives and which profit has but also why makes a purchase – that is what drives consumers when making a purchase.
Margarita Ormotsadze, Head of Public Relations Department in Webmoney.UA, told about nuances of online payments. In Ukraine, as before, the main “method” of payment for distance purchases is a cash payment to couriers, which is inconsistent with the current stage of market development. Therefore, it is hoped that due to economic, political and even mental factors situation will actively change towards civilized and generally accepted methods of payment.
Evening of the first day of the Mission was bright, fabulous, noisy, energetic, dancing, singing, competing, and tasty – one didn’t need to underline the needed word as it was possible to experience everything!
The second day of the Mission began with legislative issues, without considering which running business in Ukraine, as well as in any other country, is possible but not reliably… Dmitri Yovdy, «Leetas» legal company (Legal & Tax assistance) partner, specified options of distance selling business organization by non-resident company in Ukraine, namely:
- through registered at the territory of Ukraine legal person or representative office
- through usage of business entities which work under simplified tax system
- without business registering in Ukraine
Roman Vavrik, managing partner in “Globex Post”, told in detail about all the “pleasant” surprises which meet shipment at Ukrainian Customs. For example, veterinary and / or phytosanitary certificate, sanitary conclusion of sanitation service, explanatory letters to obvious question, and requirements of filling and submission of all documents in Ukrainian language and so on … One can avoid these marking goods as postal sending which require less documents for customs authorities control passing.
Dmitry Yovdy, «Leetas» and Valentin Kalashnik, OS-Direct, UDMA, shared with those present information on the situation with personal data protection in Ukraine. The current law and existing database registration and validation procedure aren’t perfect. But firstly active work takes place to implement changes which are needed by business structures and secondly even not perfect law is better than its absence, which Ukraine showed up to the last year…
Program’s block devoted to expectations of Ukrainian consumers was opened by Anastasia Gavura, Head of distance selling services department in OS-Direct, who told about specifics of Ukrainian Contact Center market and factors one needs to pay attention at while planning customer support in Ukraine. For example, Ukrainians have “a habit” to recall after making order at Internet and its confirmation receipt. So does 65% (!) of consumers who shop online. European companies, for example, not always take such calls into account while planning CC activities in Ukraine as such behavior is untypical for western consumers…
Evgeny Glazov, Director of POSTMAN (PGK Groupe) focused on specifics of B2C deliveries in Ukraine, and stressed that “habit” to receive good and timely service has already formed in Ukrainian consumers mind and the discrepancy to their expectations cost quite expensive to selling companies. Competition becomes tougher every day, and especially if we talk about consumers living in the capital and big cities, as ones having much choice when buying, thus very “sensitive” to delivery level. That’s why working with a reliable specialized contractor, which is constantly working on its services level improvement, not only guarantees high quality of customer service but also gives a Client an opportunity not to “distract” on non-core functions.
Alexander Vinogradsky, Western division project promotion specialist in Promodo, made comparative analysis of online business promoting in Ukraine and in the USA in terms of search engines, contextual advertising, SEO tools and browsers usage. One of the conclusions Alexander made finishing his report was that Uanet still was very young and this gave good opportunity for entering it as well as for further development.
Lilia Gorelaya, Marketing Group OS-Direct managing partner, continued the theme of Internet, but in comparison with traditional off-line issues and examined in details level of development and specificities of each “group.” Lilia pointed out that Ukrainians love to communicate and this must be taken into account when developing marketing strategy for Ukraine! Proof of this could be found in the case of social networks promotion (VKontakte / FaceBook) and bonprix active users’ community formation. Communications and content creation on the pages are derived by three parties – bonprix, page moderator and group participants. Meanwhile activity of the latter is growing day to day thanks to actions of the moderator as well as initiative of consumers!
The last block was focused on “physical” and virtual promotional materials. Dmitry Legeyda, Sales Director of “Univest Print” typography, answered participants where it is more beneficial to produce printing materials basing on comparative analysis and how with a “help” of little secrets one can significantly reduce cost of printing and distribution. The last speaker, Bogdan Kubenko, Business development Director of Magfashion, as a supporter of all communications transfer to on-line, told and showed possibilities of interactive tools for trading companies. Namely, Magfashion platform for creation, editing and managing of digital publications for professionals of fashion industry, catalogue and e-commerce trade.
That is how eventful, diverse and informative were 2 days of the Trade Mission … And if we consider all contacts, time of direct discussions between participants, and further communication, it is possible to “apply” to the Mission words of the Soviet revolutionary march – “the Mission has a start, the Mission has no end”J Moreover, date and place of the next meeting of the missionaries have been identified during the final cocktail. So – see you soon in January in Kazakhstan!
|Presentations are available at web page of the Mission.Detailed photo report is accessible at UADM Facebook page.|