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  4. > Ulmart: Hybrid retail format beats challenges of Russian market

Introduction

Russia already has the largest online community in Europe and is growing rapidly. Barriers to enter the market are high and include the need to make heavy investment in logistics, marketing and customer service. Ulmart recognized the opportunities in the Russian market and managed to turn its challenges into growth possibilities, becoming the leading internet retailer in Russia.

Features and benefits

* Analyzes threats and opportunities in the Russian e-commerce market
* Analyzes Ulmart's recent financial performance
* Examines the factors influencing the company's performance

Highlights

Russia already has the largest online community in Europe and it is growing rapidly. With a skyrocketing number of Internet users, but a still underdeveloped commercial environment, the opportunity to build a successful online selling business in Russia remains huge
Barriers to enter the market are high, allowing local players to dominate. They include the need to make heavy investment in logistics, marketing and customer service. As Russia is the world’s largest country by landmass, selling online poses quite the logistical challenge
Ulmart recognized the opportunities of the e-commerce market in Russia and managed to turn its challenges into growth possibilities, becoming the leading internet retailer in Russia and the third largest Russian company by online turnover after RZD and Aeroflot.

Your key questions answered

* What is the size of Russian e-commerce market?
* How quickly is the Russian e-commerce market growing?
* Who are the main players in the Russian e-commerce market?
* What are the challenges of the Russian e-commerce market?
* How does Ulmart's business model beat the unique challenges posed by the Russian e-commerce market?

Table Of Contents

Ulmart: Hybrid retail format beats challenges of Russian market
OVERVIEW
Catalyst
Summary
RUSSIA: AN E-COMMERCE SLEEPING GIANT
Russia leads Europe in terms of internet usage
Online sales represent only 2.8% of total Russian retail
Low regional internet penetration creates expansion opportunities
Russian online retail market to continue with double digit growth
Fashion and electronics are online best sellers in Russia
Customer preferences and expectations vary across the country
CHALLENGES OF THE FASTEST GROWING E-COMMERCE MARKET IN EUROPE
Deliveries pose a huge logistical challenge
Cash on delivery is the preferred payment method
Yandex beats Google in Russia
New import laws increased shipping complexity
Russian companies control 90% of the market
ULMART'S HYBRID SALES MODEL TURNS CHALLENGES INTO OPPORTUNITIES
Ulmart became Russia's largest internet business in 2014
Hybrid online/offline sales model increasing market share
Ulmart's “web of fulfillment” facilitates growth in most distant regions
In-house delivery service capable of delivery within two hours
Modern design enhancing shopping experience
Easy cash and credit payments make impulsive purchases difficult to resist
Supplies not based on annual contract give Ulmart a better negotiating position
Ulmart is the third largest Russian company by online turnover after RZD and Aeroflot
Ulmart plans to raise $300m to $400m of growth funding
Russia presents significant business opportunities for Ulmart despite political unrests
CONCLUSIONS
Russian market presents significant business opportunities for those able to overcome its challenges
Ulmart's business model humbles the logistic beast
Development of Russian e-commerce will bring more competition
APPENDIX
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