RBTE 2017 interview: Kupivip.ru on retail challenges in Russia

For the last nine years Kupivip.ru has been selling discounted fashion and homeware ranges to Russian online shoppers, generating approximately half a million visitors a day to its website.

Tumbling oil prices and Western sanctions over Ukraine have hit Russia hard in the last two years, though, and the retail industry has felt the impact during a time of recession.

Kupivip.ru, which also offers online retailing, fulfilment and marketing support to third-party brands via its eCommerce services division, has chosen this challenging period to adapt its proposition.

Dmitry Kholomtsev, managing director of Kupivip.ru eCommerce services, told Essential Retail: “The main challenge the last few years is the tough economic situation in Russia and a major headache has been inventory issues.

“We always had an appropriate assortment but international brands and distributors shortened importing goods to Russia. Consumers in the country love to purchase foreign brands, so it was tough.”

He added: “It became more and more complicated to find the appropriate stock. That’s why we became a distributor and started importing goods from abroad ourselves, bringing items to our Russian distribution centres.”

Kupivip.ru, which today employs around 1,000 staff and has headquarters in Moscow, opened a Berlin office to develop direct relationships with brands and facilitate cross-border activity from Europe to Russia. A presence in Kazakhstan was also established.

Until recently it was a pure-play online retail business but the organisation chose in a tough economic period to open six department stores in Moscow. They have been viewed as a success and more are expected to open, with a focus on locations close to city metro stations to aid shopper convenience.

Click & Collect, pick-up in store and return-to-store facilities are provided by the shops, and the coming year will see the start of in-store inventory being displayed on each of the retailer’s digital platforms as part of an omnichannel strategy.

"Three years ago we positioned ourselves as an eCommerce/IT company," noted Kholomtsev.

"In the course of the last year we have started seeing ourselves as a pure retailer who focuses its efforts on providing the best assortment to the end consumer and one that works promptly to find the best goods."

Kupivip.ru follows a similar model online to Yoox in Italy and it aims to replicate the TK Maxx business in Europe with its multichannel offering, according to the eCommerce services boss. It sells thousands of brands, including globally renowned names such as Levi’s, Converse and Tom Tailor.

The retailer’s story will be explained in Kholomtsev’s presentation at RBTE on Tuesday 9 May. Delegates visiting the event will be able to listen to him at 11:10am in Theatre One at London’s Olympia, where he will also underline the key pillars of the company’s strategy in the year ahead.

Those plans include the opening of a purchasing office in Milan, Italy. The country is viewed by Kupivip as the centre for fashion in Europe, and Kholmtsev explained there is "great demand" among Russian shoppers for Italian fashion products such as Dolce & Gabbana.

Russian consumers are also keen for a bargain, they like to compare prices and they are hungry for international brands, he added.

Changes to the company’s online platform are also in the pipeline for 2017-18, potentially including mobile app upgrades and the addition of a customer credit facility.

But the central strategy for Kupivip is to grow its brand partnerships and concentrate on providing customers with a positive shopping experience.

"We are going to be focused on offering the best assortment to consumers, which is why we strive to be the appropriate partner for brands with over-stocks," said Kholmtsev.

"We want to be the best platform for the end consumer and to work with the most well-known brands. We want to provide our partners with the best solution to eliminate their surplus inventory."

Kupivip.ru will be speaking at RBTE on 8 & 9 May, at 11:10am in Theatre One.