|By PR Newswire||
|March 7, 2014 10:19 AM EST||
MOSCOW, March 7, 2014 /PRNewswire/ --
In an interview last week on the Bloomberg morning news program "Market Makers," Ulmart's Chairman of the Board, Dmitry Kostygin calmly stated that "Amazon does not have a chance in Russia." Ulmart is Russia's number one internet retailer and finished 2013 with sales of over $1.2 billion.
Perhaps this may come to many as a surprise given Amazon's resources, size and aggressive business practices, the Ulmart model, which Kostygin calls the "fourth generation" of retail, is one that is more appropriately geared for the particularities of the Russian market.
The "fourth generation" model, as described by both Kostygin and Sergei Fedorinov, Ulmart's co-founder and CEO, to some in the West almost seems counter-intuitive. Large fulfillment centers located in city centers, just outside city centers and in suburban areas are fronted by small "carry-out areas" at which Russian consumers can purchase the chosen product online.
The shopper in these carry-out areas can use Ulmart's computer terminal to peruse the hundreds of thousands of goods and then send the product into his "shopping cart." Next, he purchases the item either via credit card or in many cases by paying cash at the Ulmart cash window located in the carry-out area.
As explained by Kostygin, "the most popular items are located where the people are and so purchase and receipt of product can take as little as 10 minutes." Amazon's reliance on third-party delivery companies like USPS, FedEx and others only permits them to make delivery in a couple of days. By permitting customers to purchase what they want where they want and when they want, Ulmart has in fact managed to tame the logistics beast that has so often humbled larger multi-nationals in Russia.
In December, Amazon and others were affected when FedEx and DHL mentioned they were halting shipments to Russia. In addition, Germany's leading long-distance retailer, Otto, has also found Russia's logistical hurdles at times to be nearly insurmountable.
Fortifying Ulmart's "web of fulfillment centers" is a fleet of 190 trucks that can service customers over the "last mile". This aspect of the Ulmart approach has been mastered by the company and they are now capable, in cities like Moscow - known for terrible traffic problems - of making deliveries to the home or office within 2 hours. This service is called "delivery 2.0."
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