X5 wants to compete with Amazon in Russia
Posted on September 23, 2009
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Russia’s largest retailer X5 said that a universal online store is going to be opened, a prototype of which is the world’s online resource Amazon.com, told Reuters CEO Lev Khasis.
The company plans – are market leadership in electronic commerce. “If we are going to do this, we want to become number one in the country, not just the Internet-subunit of our company”, – stressed Khasis. According to him, X5 plans to launch not later than in 2010.
Currently, the largest in terms of sales, Russian retailer copes with the crisis, lowering prices, expanding the network of stores, discounters, but at the same time experimenting with formats, including a small network of media stores.
Now competition between online stores is very low and fragmented. In Russia there is only one known online shopping resource – Ozon.ru, run more than ten years ago with ambitions to become the second Amazon.com. Turnover of the resource was $ 102.4 million in 2008, told Reuters.
Few retailers, such as Russia’s network of “The Seventh Continent, have a possibility to order the delivery of products to your home via Internet. Russian discounter “Utkonos” is also expanding its network over the Internet.
“We are not in negotiations with “Utkonos”, but we will look at their experience,” – said Khasis. According to him, it is likely that the X5 will trade books and electronics. “We will not sell foodstuffs items with short shelf-life, it’s an emotional purchase. The buyer wants to see those tomatoes, which he gets: he wants to be able to touch them, smell them. All must be sold fresh in stores,”- said Khasis. In the end, through an internet resource will be sold “all rationals when the buyer knows exactly what he wants, knows the brands and does not want to hang with his purchase – that’s what we need him to offer”, – explained the Khasis.
Consulting company AC & M has estimated that in Russia 9.7 million households had access to the wired Internet. However, limited access – is not the only problem in the country with 140 million people. Online trading is skidding because of the underdevelopment of credit cards among the population, and also because people do not believe in electronic payments, for fear of fraud.
The main problem of the project – is the delivery of goods to Russia. Sometimes it is the most expensive purchase.
“In general, there is very positive news for the company and the market. Demand for online shopping grows with the penetration of the Internet. Taking into account the fact that the X5 – is the largest retailer in Russia, it has every opportunity to occupy the same place in the internet “- the analyst for consumer markets “Renaissance Capital” Uliana Trypsina believes. However, according to her, the projections for the new project X5 are early to be made: there is neither a plan for the company’s revenues, nor the exact timing of launch.
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