Liebe Leserinnen und Leser, immer mehr Unternehmen in

Transcription

Liebe Leserinnen und Leser,
immer mehr Unternehmen in Deutschland
Dies hinderte deutsche Internet-Geschäfte
verkaufen ihre Produkte oder Dienstleistungen
immerhin nicht daran – egal ob Riesen wie
neben den herkömmlichen Vertriebswegen
Otto und KupiVip oder mittlere wie Babyshop –
über das Internet. Der Internet-Handel in
im Russland-Geschäft Gewinne zu machen
Deutschland ist im vergangenen Jahr um
und
beinahe 11% schneller gewachsen als der
veranlasste gleichzeitig die Internet-Händler,
offline-Handel.
Der
grenzüberschreitende
zu
wachsen.
Die
Rubelkrise2014
ihre Vertriebsstrategie zu optimieren, um die
Handel wächst dabei jährlich um mehr als
Situation
zu
25%. Dies ist ein noch viel größerer Anstieg
Profitiert
haben
als beim Onlinehandel innerhalb Deutschlands.
Verbraucher
Immer mehr Internet-Händler liefern also ihre
preiswert einkaufen.
ihren
in
Gunsten
zu
wenden.
z.B. alle Discounter,
den
Krise-Zeiten
da
immer
Waren ins Ausland.
Ungeachtet
Trotz
der
aktuellen
Schwankungen
schwierigen
trauen sich viele deutsche Internet-Händler
geopolitischen Situation spielt Russland im
sich dem russischen Markt anzunähern. Dies
Online-Handelsfluss mit Deutschland immer
ist im Online-Handel leichter zu realisieren, da
noch
dieses Vertriebsmodell flexibler und somit
eine
momentanen
der
bedeutende
Rolle.
Bei
den
Einkäufen aus Europa bleibt Deutschland für
Russland das zweitwichtigste Partnerland nach
Großbritannien. Dies ist umso relevanter beim
Online-Handel, da sich keine Sanktionen auf
den B2C Versand nach Russland beziehen, so
dass dieses Geschäftsmodell viele Vorteile
gegenüber
dem
herkömmlichen
Handel
risikofester ist, als der Offline-Handel.
Wer sich deshalb auf eine langfristige Präsenz
auf den ausländischen Märkten einstellt und
ohnehin den russischen Markt mit über 10 Mio
im
Ausland
einkaufenden
Verbrauchern
abdecken möchte, könnte sein Vertriebsmodell
gerade in der Krisenzeit austesten. Auch der
verspricht.
russische E-Commerce-Markt wächst um etwa
Allerdings hat sich der Konflikt in der Ukraine
30% jährlich, so dass die Gewinne der dort
und die darauf folgende Rubelkriseauf den
ansässigen Internet-Händler noch lange alleine
Handel und auch auf den Online-Handel mit
durch das Markt-Wachstum steigen werden.
Russland negativ ausgewirkt. Abgesehen vom
Vertrauensschaden gegenüber Russland sank
Wir handeln – mit Ihnen gemeinsam.
durch die Rubel-Entwertung auch die Kaufkraft
russischer
Verbraucher.
China
nutzte
daraufhin schnell die Gelegenheit, indem es
Europa
2014
noch
weitere
40%
des
grenzüberschreitenden Internet-Handels mit
Russland nahm.
Gerhard Handke
Hauptgeschäftsführer
Table of content
Cross-border sales to Russia: summary .......................................................................... 3
I. German e-commerce market: overview ....................................................................... 4
II. Cross-border shipments in Germany.......................................................................... 10
III. German cross-border sales to Russia ....................................................................... 16
IV. Reasons for not shipping abroad .............................................................................. 21
Interviews ....................................................................................................................... 25
Cross-border sales to Russia: summary
Russia with about 10 mln online-shoppers is one of the most interesting destinations in
cross-border e-commerce, among other targets, such as US, France or China. However,
entering a Russian market for a newcomer is now connected with higher risks, since a
long-term planning is problematic for geopolitical and economical reasons. Another
alarming factor is a decreasing purchasing power of Russian consumers, since ruble has
lost 50% of its value within 2014.
In spite of the risks, almost all European middle and bigger online stores being on the
Russian market at the moment, are planning to keep selling in spite of the Ruble crisis or
are currently adapting their marketing and sale strategy. As the local Russian ecommerce market is developing in a high tempo and new Russian online shoppers are
coming, it is inevitable that also cross-border sales to Russia will be increasing by any
geopolitical and economical situation. Anyway, the current domination of the Chinese
goods among cross-border sales (70% in 2014 instead of 30% in 2013) shows, that
China is basically ready to follow in the footsteps of European stores, if Europe reduces
its sales or presses a hang-on bottom because of higher risks.
An interesting peculiarity about the German cross-border business is the trend to open a
local sales office in the country of destination. This brings them closer to the final
consumer and provides a good basis for a high service quality. As a consequence, the
most well-known German online-retailers Otto, KupiVip, Adidas or Lamoda are
considered as local and not cross-border players. As local players, they also seem to be
better protected from the ruble crisis, at least at the beginning.
Another interesting feature of German e-commerce is a predominant usage of DHL
logistics provider both for internal and cross-border shipments. On the one hand, there is
consequently a big potential for development of alternative logistics services. On the
other hand, it is slowed down by the high popularity of DHL, which makes it extremely
hard for other international logistics providers to compete.
On the one hand, Russian shoppers highly appreciate German market, including ecommerce, for its reliability, high standards and geographical closeness to Russia, so
that there is a high demand on localized German online-retailers. On the other hand,
there are still numerous technical obstacles keeping German internet shops away from
shipping to Russia. These are customs procedure, language barrier, quality of local
logistics, organization of returns, etc.
Generally, there is a big demand on information among German online-stores on some
basic cross-border questions such as VAP, finding a logistics partner in Russia or on
legal issues. What is more, there is also a big demand among German online retailers on
information about cross-border shipment to third countries in general or even to EU
countries. This study aims to help e-tailers to clear up some business issues of their
interest.
Daria Bobrovskaya, e-commerce analysts
3
I. German e-commerce market: overview
E-commerce in Europe
According to the Austrian Chamber of Commerce, e-commerce sales in Europe are
growing faster than in the US. The European e-commerce turnover made up EUR
112 bln in 2012, which allows to count with up to 191 bln EUR in 20171. In 2013, the
B2C sales in e-commerce in Europe counted 363.1 bln EUR, according to statistics
of the Association "Ecommerce Europe". That was 16.3 % more than last year2.
The biggest and most important e-commerce markets in Europe are Great Britain,
Germany and France. Together they make up 61% of Europe's total sales in ecommerce. The fastest growing e-commerce markets in Europe are located,
however, in Central Europe. These are Germany, Austria, Switzerland, Poland,
Czech Republic, Slovakia and Hungary. The average growth rate of 22.7 % in online
sales here was well above the European average3.
Germany: growth and trends
The German e-commerce market counts the annual increase of 11%. The share of ecommerce in total retail sales is 7% and is expected to increase over the next five
years to 10%4. Counting 63.9 million online shoppers, Germany posesses
quantitatively Europe's largest potential for e-commerce development5. In 2012
around 77% of Internet users in Germany ordered a good in Internet. Consequently,
Germany belongs together with Scandinavia, the United Kingdom or the Netherlands
to online markets, where 60 to 80% of internet users regularly purchase online6.
EMarketer (Statista) offers an overview of the (expected) e-commerce turnover in
Germany from 2011 to 2018 (in bln USD)7:
1
WKO (Chamber of commerce, Austria). Research „E-Commerce. Leitfaden für den online Handel“. Publisher:
WIFI Unternehmensservice der Wirtschaftskammer Österreich. Wien, 2013
2
http://www.ecommerce-europe.eu/press/european-e-commerce-grew-by-16-to-363-billion-in-2013
3
Dr. Katja Flinzner. Market overview of e-commerce in Europe: Leading markets.
http://t3n.de/news/marktueberblick-e-commerce-europa-580228/
4
5
Dr. Katja Flinzner. Market overview of e-commerce in Europe: Leading markets.
http://t3n.de/news/marktueberblick-e-commerce-europa-580228/
6
7
http://de.statista.com/statistik/daten/studie/199790/umfrage/entwicklung-des-b2c-e-commerce-umsatzes-indeutschland
4
Umsatz in Milliarden US-Dollar
120
99,33
100
91,97
82,93
80
60
40
49,52
51,91
2012
2013
73,46
73,46
2014*
2015*
38,08
20
0
2011
2016*
2017*
2018*
The German e-commerce market continues to grow. The rapid growth is driven by
intensive technological developments and young entrepreneurs coming. However,
the high concentration responds to a few top online-shops and online traders. 8
EMarketer (Statista) pictures the annual (expected) growth rate in online sales in
Germany in 2011 to 20189:
25,0%
23,4%
Jährliche Wachstumsrate
21,7%
22,1%
20,0%
17,4%
15,9%
15,0%
12,9%
10,9%
10,0%
8%
5,0%
0,0%
2011
2012
2013
2014*
2015*
2016*
2017*
2018*
German online-retailers
According to the German rates check service shopanbieter.de 388,500 companies
were in the e-commerce environment in 2012 active. This number is made up as
follows: 169,500 affiliated providers, 150,000 online stores and 105,500 commercial
8
9
http://de.statista.com/statistik/daten/studie/324949/umfrage/wachstumsraten-des-b2c-e-commerce-umsatzes-indeutschland
5
Ebay dealers. 48.2% of German online stores also operate regional offline stores and
50.7% are active in marketplaces such as Amazon or Ebay10.
According to Statista.de German Amazon generated a revenue of around EUR 5.8
billion euro in 2013. It is followed by Otto (1.9 billion euro) and Zalando (702 million
euro). Alternate (366.9 million euro) and H & M (303.7 million euro) are new in the top
10 ranking. EBay was not a part of the rankings because of the company's revenue
generated as a pure marketplace exclusively on commissions.
The total online sales in Germany, according to the annual reports of the online
retailers, were about 7.8 billion euro in 2013. This also comprises a service revenue
(especially by marketplace sales) as well as all exports of amazon.de. Furthermore,
the sales volume of javari.de, de.buyvip.com, audible.de and lovefilm.de (which is
now Prime Instant Video) was included11. See the illustration below:
10
„Studie zu den Merkmalen und Potenzialen des Online-Handels an Oberrhein“. IT2RHINE-2020E-CommerceKonsortium, 2011
11
Statista: Quelle: Am 21. Oktober veröffentlichen Statista und das EHI die mittlerweile sechste Ausgabe der
Studie „E-Commerce-Markt Deutschland".
6
According to the statistics agency Statista the top 10 retail and e-commerce websites
most intensively used in 2013 - measured by WebValua Index (WVI) - were the
marketplaces ebay.de and amazon, followed by eCoupons service payback.de, elite
shopping club brands4friends.de, TV shopping 1-2-3.tv, generalist kaufland.de,
brands discounter netto-online.de, video provider lovefilm.de, beauty shop qvc.de
and online shop for house and garden tools westfalia.de. See the diagram below12:
0
10
20
30
WebValue Index
40
50
60
ebay.de
amazon
payback.de
brands4friends.de
1-2-3.tv
kaufland.de
netto-online.de
lovefilm.de
qvc.de
westfalia
esprit
vente-privee.com
globus.de
adlermode.com
otto.de
70
80
72
71
65
63
61
61
59
58
58
57
57
57
56
56
56
Accordning to Statista, German online retailers are distributed by regions as
following13:
Anteil der Befragten
Nordrhein-Westfalen
Bayern
Baden-Württemberg
Niedersachsen
Hessen
Sachsen
Rheinland-Pfalz
Brandenburg
Schleswig-Holstein
Thüringen
Sachsen-Anhalt
Mecklenburg-Vorpommern
Saarland
Bremen
Berlin
25,4%
16,7%
13,9%
8,4%
8,1%
5,8%
5,1%
3,6%
3,5%
2,5%
2,1%
2%
1,2%
1%
0,5%
12
http://de.statista.com/statistik/daten/studie/200353/umfrage/nutzungsintensitaet-von-handel-und-e-commercewebsites-nach-webvalue-index-wvi
13
http://de.statista.com/statistik/daten/studie/167039/umfrage/verteilung-der-online-haendler-nachbundeslaendern
7
German logistics services
The Austrian Chamber of commerce claimed 2013 that 59,4% of German internet
retailers used the logistics services of Deutsche Post & DHL for online delivery. 2010
these were 50% and 2009 40,7% of all internet shops in Germany14.
EBay consulted 859 online retailers that use eBay as a sales platform15:
Anteil der Online-Händler
70%
30%
24%
Deutsche Post
DHL
DPD
GLS
13%
11%
10%
Hermes
Andere
UPS
Versanddienstleister
The statistics 2010 to 2014 show, that the majority of German online retailers ship via
Deutsche Post& DHL both throughout Germany and as cross-border. According to
the independent survey of the publisher, the vast usage of DHL among German
online-retailers may be explained by several reasons, e.g.
o reputation and trust intensified by the German low risks mentality;
o wide range of solutions for e-commerce;
o peculiarity and easiness of IT integration.
Here are some examples of motivation for highly usage of DHL in Germany
according to our responders:
"DHL is widely used perhaps because it is just the most well-known logistics provider
known in Germany, so people just trust it. It is the first thing that comes to your mind to send via DHL&Deutsche Post - when you think of shipping something abroad.
Moreover, they offer a regular pickup of goods. Besides that, DHL has a very wide
range of solutions for any business. They have a fully automated process, they have
been on the market for a long time. Some of our clients, by the way, are currently
14
15
http://de.statista.com/statistik/daten/studie/167092/umfrage/genutzte-versanddienstleister-von-onlinehaendlern-in-deutschland
8
sending via DPD. But there is stereotype in Germany that the DPD delivery is of
lower quality." (A German SEO consulting agency Design4you)
"From the technical points of view, it is sometimes better that there is only one
logistics provider, which can take control over the whole process. If there are several
providers at different tracks, the complexity of the system becomes to high, so that it
comes to mistakes more often". (a German freight company and customs service)
"Most German internet shops - also our clients - work with DHL. For this reason we
enable software integration of most common CMS and shop systems used in
Germany with the system of DHL. We also do this for DPD and UPS at the moment.
We do not work with Hermes or FedEx but will probably add them in the future".
(proMO, a German e-commerce software provider)
9
II. Cross-border shipments in Germany
Statistics: German cross-border
According the research "Global cross-border B2C e-commerce" (2014), the
worldwide leaders in B2C E-Commerce exports are the USA, the UK, Germany, the
Nordic nations, the Netherlands and France. Together their online retail cross-border
exports are forecasted to top EUR 100 billion by 2020. Germany was the secondpopular popular destination for cross-border online shopping abroad among
European online shoppers in 2013, situated between the UK and France in the
ranking. Both for import and export in B2C e-commerce Germany is one of the most
active countries worldwide16.
About 50% of German online retailers adapted their online stores to cross-border
sales, according a PayPal research published in Ecommerce-Magazin17. According
to another statistics, almost a third of all German online-retailers internationalizes
their business, offering a localized online shops for foreign clients18. The current epayment barometer, a joint survey of ibi research, the business magazine Commerce
and MasterCard, shows that 54 % of participating online stores in Germany were
selling their goods abroad. Among stores with sales over 500,000 euro there were
about 64% of the participants. Only 7% of surveyed participants do not accept orders
from abroad19.
iBi Research consulted German online stores, which sell abroad, to find out the
distribution of the orders. The inquiry showed, that 82% of orders were given by
German clients, 15% by EU clients and 3% by non-EU clients20.
16
Research GLOBAL CROSS-BORDER B2C E-COMMERCE 2014. April 2014, provided by yStats.com GmbH &
Co.KG, Hamburg, Germany
17
To the survey: As a part of the PayPal eCommerce study German 500 online retailers were interviewed by
telephone about their goods, e-commerce activities as well as the payment methods using a standardized CATI
questionnaire in the period from 25.03.09 to 24.04.09. The PayPal commissioned study was conducted for the
fourth time in a row by EuPD Research.
18
http://www.ecommerce-leitfaden.de/e-payment-barometer-online-haendler-verkaufen-aktiv-ins-ausland.html
19
20
http://de.statista.com/statistik/daten/studie/189743/umfrage/anteil-inlaendischer-und-auslaendischer-kundenbei-online-haendlern
10
90,0%
82%
80,0%
Anteil der Kunden
70,0%
60,0%
50,0%
40,0%
30,0%
20,0%
15%
10,0%
3%
0,0%
Inländische Kunden
Außereuropäische Sonstige europäische
Kunden
Kunden
The E-Commerce Magazin is wondering about the fact, that German online stores, in
spite of technical provision of cross-border shipments, still prefer the inner German
market to ship to. It claims that German online retailers potentially have the best
opportunities of shipping. They are superior to their foreign competitors in many
aspects thanks to the tough competition, low prices, good shipping conditions and a
wide range of products21.
iBusiness also claims a lacking exportation of online goods compare to other
countries. According to a PayPal study German orders of online goods made up of €
263 million in 2013 for suppliers in the US. According to this, the German balance of
online trade is rather modest: Exports exceed the imports only by about € 13 million.
The export nation Germany is still catching up with the UK (€ 869 million) and the US
(€ 132 million) in e-commerce22.
German online shoppers buy abroad
92% of online shoppers in Germany still prefer shopping at domestic online retailers.
German customers try to avoid purchases at online stores where a foreign language
is required for a purchase order or other communication23.
21
http://www.e-commerce-magazin.de/versand-ohne-grenzen-dank-sauberer-adressdaten
http://www.ibusiness.de/aktuell/db/651663jg.html
23
22
11
A report by Ipsos provides slightly different statistics. Therefore 77% of Germans
shopp online and 40% of online shoppers also purchase abroad24.
The most popular intra-European online-markets for German shoppers are Austria
and Switzerland, as well as the USA among non-European markets25. According to
another statistics, the top destinations for cross-border online shoppers in Germany
were the UK, the USA and China in 201326. Regarding cross border shopping
worldwide, this is also confirmed by a Pay-Pal study: the most popular foreign online
shopping destinations worldwide are the United States (45%), the UK (37 %), China
(26 %), Hong Kong (25 %), Canada (18 %), Australia (16 %)27.
Online shoppers worldwide purchase in Germany
Germany is one of the most popular countries in cross-border trade. Worldwide, it is
number four among the most popular destinations in online shopping 28. Global
Cross-Border B2C E-Commerce 2014 says that cross-border online shopping from
the UK, Germany and the USA is popular in France, while also a quarter of online
stores in France shipped internationally, supported by international demand for
French fashion and beauty brands29.
After the Pay-Pal analysis in the E-commerce Magazin, the German B2C export to
other five markets studied amounted 2.9 billion euro in 2013 and is expected to rise
by 2018 to 8.3 billion euro. This makes Germany a leading European online shopping
destination. Here's a look at the German export market:

14% of online shoppers in the United States surveyed by Nielsen indicate to
shop at German sites and buy German products worth up to 1.3 billion euro
totally in 2013.

27% of the Chinese online shoppers buy at German online retailers; their
purchases are worth 863 million euro in total.
24
http://www.e-commerce-magazin.de/studie-deutschland-ist-top-hotspot-fuer-den-internationalen-online-einkauf
26
27
http://www.derhandel.de/news/technik/pages/E-Payment-Onlineshopper-auf-Auslandstour-9888.html
28
29
25
12

19% of the British online shoppers buy on German websites; worth up to 619
million euro totally30.
Also for Scandinavia and Eastern Europe, Germany is an important goal for online
purchases abroad. 19 and 13 % of online consumers in these regions have ever
shopped on a German website. Products from German stores are not only well sold
in Europe, but also in non-EU continents. By all consumers from abroad who shop in
Germany, 19 % come from China, followed by 12% from France and 11% from
Russia31.
Report of the German E-commerce Association BEVH
The biggest German e-commerce association BEVH (Bundesverband E-Commerce
und Versandhandel) has conducted a study in 2014 on cross-border shipments of
their members. (The association counts about 661 members, according the their
website data. BEVH members are among others 1-2-3.tv, Buch.de, Dress-for-less in
Germany, IKEA Deutschland, Kaiser+Kraft, etc). The research showed the following
results.
The cross border activities of the BEVH member reached its highest point in spring
2014. Eight out of ten companies in the current evaluation "already deliver to
consumers abroad" (77 %). The Federal Statistical Office reported that about 62 %
of enterprises engaged in online trade "sold abroad" in 2012 (companies with ten
employees and more, inquiry in May 2014). However, most online and mail order
companies measure their foreign activities as only of a "low interest" (64 %).
Most
payments
are
made
via
payment
systems
(such
as
Paypal
or
Sofortüberweisung.de), by wire transfer or a credit card. See the illustration below:
30
http://wallaby.de/news/epayment/die-neue-gewurzstrase-internationaler-handel-p4561.html
31
13
What is more, most of the respondents not yet operating abroad are planning to do
so in the future (81%). The most interesting shipping destinations of the companies
surveyed were Austria (72 % of responses), followed by Switzerland (48 %) and
France (31 %). However, most online and mail order companies measure their
foreign activities only as of a "minor importance" (64 %). In addition, four out of ten
companies (41 %) have a share of foreign customers up to 20%.
Most cross-border deliveries are currently made by online stores, which sell
technical-oriented products (85 %). The trend is following: the bigger the company, its
turnover, the variety of goods, the number of employees, etc., the more intensively it
is shipping abroad. BEVH also claims, that companies with investment planning and
social media usage (78%) have a slightly above-average amount of cross-border
shipments. Furthermore, currently the companies from North-East and South West of
14
Germany have a stronger international orientation than those from other regions of
Germany.
15
III. German cross-border sales to Russia
Popularity of Russia: the German perspective
Based on the Pay Pal data the E-commerce Magazin (www.e-commercemagazin.de) affirms that Russia is one of the five most interesting export online
markets for the US (41 %), the UK (36 %), Germany (75 %), Australia (67 %), China
(55 percent) and Brazil (168 %)32. The EU is a third-dominating cross-border market
for Russia after China and USA. Within Europe, Germany is taking the leading role
after UK for transit and cross-border internet-sales to Russia.
For the issues of VAT taxation, Russia is quite uncomplicated for shipments from the
EU, including Germany. According to the EU legislation, for all deliveries to a non-EU
country no VAT is foreseen, regardless of whether the consignee in a third-country a
private or a commercial person is. Furthermore, cross-border shipments to private
persons in third countries provide the same legal consequences and conditions of
sales as to enterprises33.
However, according to the ibi research at the University of Regensburg only 3% of
German online stores look for Russian clients34:
0,0%
Österreich
Schweiz
Benelux-Länder
Frankreich
Großbritannien
Italien
Skandinavien
Spanien, Portugal
USA
Osteuropa (ohne Russland)
Griechenland
Russland
Asien
Australien
Afrika
Anteil der befragten Online-Händler
10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% 80,0% 90,0%
82%
54%
24%
21%
20%
16%
15%
15%
9%
8%
6%
3%
3%
3%
%
The independent analysis of BEVH members listed on their website allows the
following statement. 49% of the companies listed in the member list do not ship
32
http://www.ibusiness.de/aktuell/db/651663jg.html
Data Sheet on cross-border sales to private persons, p.8. IHK Berlin. June 25, 2014
34
http://de.statista.com/statistik/daten/studie/4427/umfrage/auslaendische-absatzmaerkte-in-denen-online-shopskunden-werben
33
16
abroad (129 online-stores); 33% of BEVH members ship throughout EU (86 onlinestores); 11% of companies ship to Russia (28 companies) and 7% ship to other nonEuropean countries. See the illustration below:
60%
50%
40%
30%
20%
10%
0%
only
Germany/DACH
EU
others, non-EU
Russia
According to the analysis of the open member list of BEVH, the following online
retailers currently offer a delivery to Russia (28 members):
http://www.calida-shop.de
http://www.landsend.de
http://www.connox.de
http://www.modelcarworld.de
www.backwinkel.de
http://www.nydj.de
http://www.craft-sports.de
http://www.oboy.de
http://www.deerberg.de
http://www.onmyskin.de
https://www.louis.de
http://www.kraemer-pferdesport.de
http://www.dress-for-less.de
http://www.derclub.de
http://www.dt-shop.com
http://www.skatedeluxe.com
https://www.magnetix-wellness.com
http://www.solvino.de
http://www.esmeyer-shop.de
https://www.runnerspoint.com
http://www.fcbayern.de
http://www.schulranzen-onlineshop.de
http://www.hse24.de/
http://www.stylebop.com
http://www.kidoh.de
http://www.tbs-aachen.de
http://www.kraehe.com
http://www.trigema.de
In spite of big affiliation of German e-commerce market to Russia there is still a
limited amount of alternative shippers like DHL, DPD, SPSR or boxberry offering
cross-border delivery from door to door to Russia, including customs clearance. The
biggest flow is still being shipped by the Russian Post on the territory of Russia and
by DHL&Deutsche Post on the German territory.
17
Popularity of Germany: the Russian perspective
The interviews with leading German e-commerce and logistics providers (see the
attachment) allowed partly to give an explanation on why Germany is that attractive
for the Russian customers. Germany takes a leading (after United Kingdom) position
in European cross-border shipments to Russia and CIS due to the following reasons:
-
profitable geographical location in the middle of Europe and still near to
Russia;
-
relatively low costs in comparison to average European standards. Many
internet-retailers and shippers like Kupi.Vip or boxberry have their European
hubs located in Berlin for financial reasons;
-
reliable logistics within Germany;
-
image of German fabricants and suppliers as being of highly quality, stable
and reliable;
-
high development of e-commerce infrastructure and market within Germany.
Nonetheless, following reasons are speaking against purchasing in Germany for
Russian customers:
-
traditionally these are United Kingdom and Italy being associated with fashion
among Russian consumers;
-
a language barrier, as there is a limited amount of German internet-shops
translated into Russian;
-
many German internet-shops still do not offer delivery to Russia. However,
there are consolidators like Posrednik-Shop, RusBid, Eurosell and others
closing this gap;
-
high prices due to ruble devaluation and fluctuations.
Besides that, the most famous German internet-retailers like Otto group, adidas,
Lamoda (the investment product of German investor Rocket Internet), Kupi.Vip or
Kaiser+Kraft have a sales office in Russia and shall be considered as local retailers
for this reason. Some also ship cross-border from Europe parallel to the local
Russian business (e.g. Kupi.Vip: 2012 it has launched a cross-border project from
Germany, Italy, UK and other countries). Consequently, German online-stores acting
as Russian local players can currently offer better prices than their foreign
18
competitors as they were less touched by the rouble crisis in 2014. The major reason
for Germans playing as locals on the Russian market comes partly from the German
business mentality with a high priority of closeness to the Client, reliability, low risks
strategy, stability and sustainability.
Cross-border tendencies in 2014/2015
According to the interviews conducted with German major e-commerce players for
this study, the volume of cross-border sales were growing in 2014 more slowly than
2013 and 2012. The reasons for that are the following:
1. Russian customers are saving up money;
2. The purchasing power of ruble is falling down;
3. The ruble fluctuation is connected with increasing risks, so that several
international internet-retailers prefer to hang on and wait, till the currency is
stable again.
Following categories of retailers have lesser damage from the situation or are even
profiting from it:
1. Local retailers, as they can correct their price policy more easily or offer local
goods and services;
2. Discounters like Kupi.Vip, as they have adapted their business model to crises
periods. Customers are eager to look for discounts if crisis is coming;
3. Retailers using drop-shipping model, as they have shorter logistics cycles and
can adapt their prices smoothly.
The Ruble devaluation and high fluctuation are affecting first of all small and middle
internet retailers like consolidation companies, which operate by shipping
consolidated parcels to CIS regions. Those are mostly either pessimistic about
volumes of shipment in 2015 or are planning to restructure their cross-border
business to Russia.
Big and risk-ape international retailers with a wide net of suppliers are not planning to
close or correct their cross-border strategy to Russia, as they still have some margin
puffer, which allow them to correct their price policy more or less smoothly.
19
Whereas many European Internet-shops are rather careful hanging on or shipping
less since the currency crisis in Russia, China is dominating up to 70-75% on the
cross-border market.
Nevertheless, the interviews showed that China was still a problematic alternative to
European retailers for several reasons. Firstly, the Chinese currency yuan is strongly
going up at the moment, so that Chinese goods are also getting more expensive, for
Russian consumers. Secondly, most Chinese internet-shops still have difficulties with
an IT-integration and preparation of customs documents (e.g. translation of customs
registers) for the Russian customs service. This increases the cost of shipments from
China, as it is necessary for e-commerce shippers to integrate the first shipping mile
in China e.g. through a franchise model. Thirdly, over 95% of cross-border shipments
from China are being shipped via the Russian Post. As Chinese retailers are being
used to this way of shipping, it is complicated for them to switch to alternative
logistics providers.
The reduction of duty-free limit from 1000 euro monthly to 150 euro per parcel
planned to be introduced in the second half of 2015 is going to affect some selected
e-commerce players, but not the cross-border Internet-sales between Germany and
Russia generally. Firstly, the average price check of most cross-border internetretailers is anyway less than 150 euro. Secondly, the mechanism of data and
customs fee collection being worked out at the moment by the Russian Customs in
collaboration with internet-retailers and shippers is going to deliberate shippers from
the obligation to collect customs fee without having a working mechanism to do so.
Most alternative shippers will even profit from the incensement of the amount of
parcels. Generally, this is only a segment of absolutely luxury goods or those
retailers misusing b2c duty free channels of delivery of in fact commercial shipments,
will suffer from the new regulation. For now Russia is the only country with a high
duty free limit of 1000 euro monthly.
20
IV. Reasons for not shipping abroad
Whereas German e-commerce market is intensively expending on the EU and nonEU markets, there are still numerous technical, geographical, psychological and other
obstacles both on the side of retailers and consumers, which prevent from shipping
online.
According to the iBi research 45% of respondent German online stores with the
annual turnover of more than 500.000 Euro do not ship abroad because of the legal
insecurity connected to cross-border; other vital reasons are marketing difficulties,
logistics issues, complications by the payment, lack of information about foreign
markets, etc35. See the illustration below:
What is currently your biggest difficulty in selling to customers abroad?
Händler mit einem Umsatz über 500.000 Euro (n=21)
Händler mit einem Umsatz bis 500.000 Euro (n=58)
Anteil der Befragten
0,0% 5,0% 10,0%15,0%20,0%25,0%30,0%35,0%40,0%45,0%50,0%
32%
Schwierigkeiten beim Angebot eines Kundenservices in jeweiliger Sprache
Rechtliche Unsicherheiten
21%
Versandabwicklung ins Ausland sehr aufwendig
45%
33%
26%
Übersetzungen der Website bzw. des Artikelangebots sehr aufwendig
Unsicherheit bei der Zahlungsabwicklung
Fehlende Informationen über ausländische Märkte
22%
31%
29%
28%
26%
18%
19%
Mehrsprachenfähigkeit des Shops nicht gegeben
Zu hoher Aufwand für das Online-Marketing im Ausland
9%
Geltendmachung offener Forderung schwierig
9%
Kulturelle Besonderheiten
5%
Starke ausländische Konkurrenz vor Ort
5%
Fremdwährungsrisiko
40%
36%
29%
29%
11%
8%
8%
3%
5%
5%
Sonstiges
From November 2014 to February 2015 we conducted an independent miniinvestigation among German online retailers as well as logistics, IT and other
services to clear up their obstacles by cross-border shipments to Russia and also
throughout the EU. There were 27 open interviews conducted with CEOs of German
internet shops and e-commerce services (IT services, consulting agencies and
logistics companies). In order not to influence the results, there were no fixed choice
options offered. We could fix the following results.
35
http://de.statista.com/statistik/daten/studie/189735/umfrage/schwierigkeiten-beim-verkauf-ins-ausland-beionline-haendlern
21
Most participants (22%) showed concerns about the procedure of customs clearance
in Russia. A German internet-shops is claiming that “Russian customs is mega time
and money consuming. Despite the fact that we are shipping to Russia since five
years so far, the customs clearance is not getting easier”. Another internet shop is
stating that “there are several categories of products that are just not easy to import
to Russia because of customs conditions. These are mainly about foods and spirits”.
Language barrier, organisation of returns and quality of local logistics in Russia were
pointed out by 19% of participants. The language barrier was mostly mentioned by IT
or logistics services in context of localization of an internet shop or preparation of
customs papers. Organisation of returns from Russia was characterized as time and
money consuming. Conserning the quality of local logistics in Russia our
respondents were claiming low standards in meeting the shipping time because of
the big size of the country, as well as a danger of robbery and fraud.
15% of respondents are worried about the actual geopolitical situation in Russia,
which affected the purchasing power of Russians and the stability of ruble.
Consequently, cross-border shipments to Russia is now related to higher risks and is
based on lesser demand than usual.
15% of respondents are stating that they rather lack of information about the
marketing, logistics and legal aspects of cross-border shipments to Russia. These
are predominantly small and medium businesses. Some are pointing out that they
would never enter the Russian market alone without having a reliable local partner,
e.g. in logistics services.
Some participants (11% each group) were making remarks about data security,
organization of payments or the reduction of duty free limit. One participant
mentioned the fact that according to the new legislation, international retailers are
obligated to use local servers while selling to Russia. Up to him, “this may be
impossible or hard to realize”.
What the local organization of payments is concerned, some respondents observed
that Russian clients use different payment systems, so it costs extra transaction fee
while localizing the sales. Another problem in Russia is, according to them, a high
rate of bar payments, which is hard to organize by cross-border shipments. Another
important aspect was the fact that “a German retailer has no possibility to check the
22
validation of your credit card. It means, the German online-seller doesn’t know, if the
data of a clients credit card is true or not”.
Mostly small and medium-sized businesses like parcels consolidators were stating
that a possible reduction of a duty free limit could affect their sales in Russia. On the
contrary, logistics services were admitting, that they would probably profit from the
technical reduction of a duty free limit. According to them, the same shipping volume
would be split into smaller parcels. As a result, this would increase transaction costs
for small internet shops or parcels consolidators but would rather have no influence
or even a positive influence on shippers.
Two companies were sharing their concerns about a too high competition on the
local e-commerce market in Russia, so that they would rather not dare to compete
with local players.
Such technical issues as integration with a logistics provider or label scanning were
described as problematic by one respondent each.
25%
20%
15%
10%
5%
0%
23
Similar results were shown, if only the voices of internet shops are taken into
account. The answer was very much depending on the certain target group. Small
and medium-sized businesses were mostly speculation about a possible reduction of
the duty free limit or an access to the Russian market generally. At the same time,
bigger internet shops or businesses, which are already integrated into the Russian
market, were rather sharing their concerns about the quality of local logistics, the
danger of high risks and decreasing volumes since 2014, or the practical
organization of returns.
16%
14%
12%
10%
8%
6%
4%
2%
0%
access to the
customs
reduction of decreasing
market/lack clearance in duty free limit
volums
of
Russia
information
local logistics
in Russia
returns
risks
To sum up, the survey shows that customs clearance in Russia and the organization
of local logistics and returns are traditionally vital questions for all kinds of internet
shops and e-commerce services, which are presented on the Russian market.
Decreasing shipment volumes and higher risks are both new subjects, which have
become especially important since the ruble crisis in 2014 (s. chapter III). The
difficulty of access to the Russian e-commerce market is predominantly relevant for
small businesses or those, which are just entering the Russian market. The concerns
about the duty free limit are relevant to all market players, although their attitude to it
is based on their business situation.
24
Interviews
KupiVIP general manager Vladimir Kholyaznikov: “Crossborder now exceeds 25% of our total volumes and we expect
strong growth in 2015″
Launched in 2008 by Oskar Hartmann, a German entrepreneur
born in the former Soviet Union, KupiVIP quickly became Russia’s
leading flash sales site in the field of fashion. When the cross-border e-commerce
market emerged in Russia, the company lobbied against what Hartmann called – with
some justification – “duty-free e-commerce.” But KupiVIP also launched its own
cross-border business as early as 2012, combining domestic and international
shipments in its catalog.
Initially KupiVip was a domestic e-commerce project. Why did you launch
cross-border business a few years ago?
Like any classical domestic player, we understand that geographical borders, the
borders between domestic and international markets, are being blurred in the modern
world. So, at the end of 2011 and beginning of 2012, we actually launched a crossborder delivery project from Europe.
Cross-border now accounts for more than 25% of our total volumes and is likely to
increase in 2015. In the outerwear product category, the cross border share exceeds
domestic flows, especially in the winter and spring seasons.
Which countries are concerned?
With our own international logistics, we deliver to the CIS from ten countries, mainly
from Europe – in particular from Germany, Italy, France and Great Britain. Now we
are integrating Turkey into the delivery system. They have quite high quality linens
and leather goods. We are also entering the Asian countries.
The main producer of fashionable shoes is Italy. About 70% of shoe production
comes from there. Italy is traditionally linked with the world of fashion. But we work a
lot with Germany, which consumers often associate with quality and a high level of
accuracy. Moreover, Germany is the second largest fashion market. The country is in
second place in Europe by retail volume. Since our business is built on liquidating
leftovers from the fashion market, large retail volumes in a country are very important
for us.
The fact that our founder is of German descent also plays a role. He is familiar with
the German market. Plus, the base cost is lower in Germany than in many other
European countries. Renting space, logistics, labor are all cheaper in Berlin than the
25
European average. Plus the convenient central location – close to Russia, and with
dependable logistics.
We will expand the Asian base as well as the European, since it is in Asia where
production of many fashion brands’ textiles and leather goods goes on.
How do you manage the shipment process?
The goods from our foreign suppliers (we work directly with brands and
manufacturers) are sent to our German hub. We pack orders there and then either
use our own delivery system (90%) or third-party suppliers to send the orders to our
customers, depending on the region they are located in.
Logistics prices are rising, especially for air delivery and so on. Therefore, we have to
manoeuver it so that the consumer does not feel the rise in domestic services.
Did your cross-border business grow or fall in 2014?
In 2014, our cross-border volume approximately doubled, in line with the fast growth
of the market. That was mostly tied to strong development of cross border
ecommerce in Russia, desire of Russians to buy goods directly from Europe as well
as attractive product and price offering.
The growth during first three quarters was quite inspiring, but of course following the
ruble’s fall in mid December, the growth isn’t as fast as we would like. However, we
are trying to avoid increasing prices too sharply, even if this means smaller profits. In
the premium segment, prices for Russian consumers increased by 40% on average,
which obviously hasn’t been an advantage for us or for all European sellers. Now
China is winning, occupying 70-75% of the cross-border market because of its
inexpensive goods. We will be working on our cross-border strategy in 2015 and will
adapt to the actual economic environment in Russia and neighboring countries.
How have you prepared for a potential crisis in 2015?
We have certain advantages over other Internet stores. First, we work directly with
brands and producers worldwide, connecting them with consumers through our
platform. This means that we do not have our own inventories but rather sell thirdparty products on our web sites, and organize end-to-end logistics after customers
place orders. Thus our short buying cycle – not 8-12 months like many traditional
Internet stores – allows us to react more flexibly to changing consumer behavior, and
adjust the assortment and pricing on a daily basis. Everyday on KupiVIP.ru one can
find up to 120 sale events (actions) from 50-60 vendors worldwide.
Second, our discounted sales model came out of the crisis of 2008, when the
population saw its real income decrease. In such crisis conditions, consumers tend to
avoid impulsive purchases. They look for bargains to purchase the products they are
accustomed to, which favors discount stores – which is precisely our business model.
26
Even our most pessimistic scenario for 2015 includes growth for both local and crossborder sales volumes. Obviously, we will grow not only due to our strong internal
business performance, but also due to market growth, higher inflation – which raises
the average purchase size – and so on. On average, we are expecting 20-25%
growth in cross-border for 2015, depending on the exchange rate of the ruble. I think
the market itself will growth by an average of 25% for the year.
Will the potential lowering of the duty-free threshold affect you, if it occurs in
2015?
Even if it is lowered to 150 euros per package, it won’t particularly affect us, since we
work in the market price range of less than 150 euros, like most other Western crossborder merchants. Our Chinese colleagues have an average purchase size of about
$25-35. Lowering the duty-free threshold will mainly affect those who use the B2C
channel not for the intended purpose of their own commercial purchases, and this is
quite reasonable and healthy for the Russian economy.
27
Leonid Zondberg, Commercial Director of DPD in Russia:
"The tendencies in cross-border shipments to Russia shall
change in 2015. Otherwise, Europe will just lose the Russian
market."
DPD is a global company. Which countries do you ship
to as cross-border?
Theoretically we are able to deliver to any place, as we are represented worldwide.
Our biggest cross-border stream comes from the United States, Europe takes the
second place. The UK is taking leading positions as this country is traditionally
associated with stylish clothing, and what is more, there are many strong online
retailers there. We also have a cross-border flow to and from Germany, France, and
Italy. Especially the Italian market is interesting for us, as it is traditionally famous for
fashion. But now the structure of the Russian cross-border e-commerce market is
changing radically.
You mean the increasing role of China in it?
Exactly. DPD in Russia is now just beginning to work with China. Although our
European colleagues have already followed this trend to deliver to Europe from
Chinese online stores. This fact is particularly interesting, given that China shares
only 5% share of the European cross-border market. EU hat a relatively low dury
barrier, so that it is not that expensive for consumers to shop in Chinese online
stores.
For Russian online shoppers China plays an even more important role than in
Europe. Why is this direction of cross border sales not that well represented
among Russian delivery services?
There are many technical difficulties related to shipments from China. DPD in Russia
is for example one of the five companies involved in the customs experiment at the
Russian customs service. We can do the customs clearance in Russia applying with
a single register according to the simplified customs procedure. But still, shipments
from China would mean some risks for us. You always need some Chinese company
on the territory of China to take the first mile of delivery to collect passport data
correctly, translate them from Chinese to Russian for the customs register, and so
28
on. So we just do not want to risk our licensed status of a customs representative we
have, the more that we completely work on a legal way. It means, we really need a
partner and a representative in China, so that we are working on this task at the
moment. It is still difficult to tell you the exact deadline for that, as it is a long
process.
Does it actually make sense financially for you to work with China?
Well, the thing is that the average costs of delivery from China are rather low - it is
about $18. It means that if you want your delivery business from China to be efficient
and profitable, you absolutely need a wide network of packstations or pick up points.
Both networks are already very well developed in Europe but as for Russia, the
infrastructure of pick up points is still emerging there. The expending Chinese ecommerce market is forcing us to bring this development in Russia forward.
Would you call delivery from China still a promising work to do, given that a
large amount of parcels from China is coming through illegal channels?
You see, our single competitor in our business with China is the Russian Post, which
daily delivers about 200-250 thousand orders. Therefore, it would be for us a great
success even to obtain 1% of this stream. Competition on the delivery market of
China would be useful for Russian Post, too, to make them optimize their service. A
client needs to have a choice. It is also extremelly important to work with major
Chinese clients such as AliExpress, so that they got used to alternative delivery. In
fact, with regard to China, I do not see much sense in playing grey, since now the
quality of official delivery services is high enough.
Leonid, how do estimate your cross-border volume of DPD Russia in 2014?
Generally, 95% of the business of DPD in Russia is related to inner logistics. The
cross-border segment is considerably smaller, about 200-300 parcels a day or some
tens of thousands per year. Although we are continuously increasing the network of
our European customers and partners, our current number of parcels from Europe
fells. It has happened since around mid-November in connection with the collapse of
the ruble.
29
Now it is a port-New post-New-Year-season, so that that the shipment volume
traditionally increases. The volume has not changed that sharply so far, but still we
have a feeling that the customers started to buy necessary things only.
Are you losing your customers due to the increase of their shipping volume?
Not really, the old customs are not tending to go away and there are even new ones
appearing. Furthermore, many online retailers have begun to localize the business in
Russia, as e.g. Next, which has just started to sale from Russia - we are working with
them in a way as with domestic Russian companies. But in terms of cross-border to
Russia China is of course a more important market for Russia than Europe and USA.
What are your plans in Russia in terms of cross-border for 2015?
Well, we are of course planning to grow and discover new markets. The market
forecast for cross-border in Russia in general also tends to be optimistic: the number
of parcels will continue to grow each year by half, as it was before. In 2012 it was 20
million shipments, in 2013 - 40 million and in 2014 - 80 million shipments. The trend
is going up. In 2015 the growth will continue of course, and I am looking forward to
see the market growing by 25-30% in 2015. The shipping volume in 2015 will maybe
even reach 100-150 million items. If this happens, cross-border will reach 50% of the
total e-commerce flow in Russia, so that 2016 it can overtake the Russian domestic
e-commerce. This means that Russia will be in fact the second Australia, where
consumers shop mainly abroad.
Will it change the situation in your eyes, if the duty-free barrier is reduced to
150€?
According to our information since the last discussion panel of the customs
committee it was decided that the duty free barrier remains the same for another six
months. But in fact, we are interested in the reduction of the duty-free barrier indeed.
But would it not lead to the fact, that cross-border shopping gets more
expensive for consumers, so your shipment volume will decrease?
Actually it is just the opposite. The duty-barrier of 150 € - it is actually calculated per
parcel, not for a monthly order. Now logistics companies are practically forced to
charge a fee themselves, as they need to collect costumers data and send them to
30
the customs. Actually, this shall be done in advance, before the parcel has not yet
reached the customs.
Is this circuit being already practically implemented?
In cooperation with the Customs Service and payment system operators we just
finalizing the mechanism for collecting customs fees. In August 2014 there was a
successfully conducted experiment the online service. As a result, there was no
longer than one hour passed from the moment of customers notification to the
release of goods. The results are really encouraging, so that the service is going to
be convenient for the recipient.
Leonid, since 2014 there are many voices in Europe saying, it is not a good
idea to enter the Russian market at the moment, including e-commerce. What
is your opinion?
From our experience, as I said, we are planning to involve new customers from
Europe and also keep all former clients. I believe that the economic trend will change
in 2015 and cross border e-commerce stream from Europe will increase again.
Otherwise, Europe will lose the Russian market and will give it to China, Turkey, Soth
Korea and other developing countries.
Thank you very much for the interview!
31
Sergey Podkin of Boxberry on cross-border sales:
“The volume of deliveries is falling, but this will not lead our market
to catastrophe”
Over the past few years Boxberry, a relatively new player on the
Russian e-commerce shipment market, has been developing a competitive offer for
deliveries and customs clearance from the USA and Europe to Russia. The company
specializes in express cargo – sending packages worth up to 1,000 euros and
weighing up to 31 kg. Part of the international delivery cycle is run out of the Boxberry
office in Berlin.
With which countries is Boxberry currently working with and which direction is
being prioritized by the company?
At the moment, we strive to cover as much as possible of the European and
American markets. In 2014, we moved about 250,000 items. The great bulk of them –
about 90% – is being sent out by US online stores. European Union countries and,
especially, Germany, represent around 10% of all our international shipments at
present.
Today’s priority is the European Union. Here we carry out ground shipping
from our warehouse in Berlin, engage in order fulfillment and customs
processing.
Of course, we could not ignore the market that is so popular today, China. This
country is in our plans, but talk of getting started there is premature: there are a lot of
nuances of a technical nature. In particular, Chinese online stores do not always
have the opportunity to translate the names of their goods, which makes it difficult for
them to collect data for Russian customs clearance. As Asian sellers prefer the
principle of “cheap, even if it takes a long time,” many are happy to work with the
Russian Post. Whether they are willing to change this principle in favor of “faster and
inexpensive” is not yet clear. Therefore, we are not in a hurry to start delivering Asian
goods.
Are your direct rivals for deliveries from the European Union DPD и DHL?
32
I would not call DPD and DHL the competitors of Boxberry. We have different starting
points, we are in different price segments, offering different methods and conditions
of delivery. DPD and DHL are air-delivery premium operators with the subsequent
tariffs. Boxberry offers ground delivery on a budget: inexpensive, but with predictable
delivery times and the ability to keep track of the cargo on the company’s website.
Speaking of your clients, who is Boxberry betting on: on fully fledged Internet
stores or consolidators like Eurosell?
In Germany and the European Union mediation services are not as strong as in the
USA, so in Europe it is more convenient to work directly with online retailers. This
spring, we plan to connect several major international clients. However, in the current
economic climate it is difficult to predict how things will develop: it is not clear what
will happen to the ruble, but an expensive dollar and euro have a very negative
impact on the purchasing power of Russian consumers. People have started to save
money and, accordingly, the delivery volumes are falling. Whether European online
shops will enter the Russian market in such circumstances and organize a separate
sales channel for Russia is unknown.
What was the trend in cross-border e-commerce deliveries in 2014 — growth,
stagnation or a decrease?
Currently, the most important player in e-commerce in Russia is the government,
which creates a certain political situation. As a result, the economic situation changes
as well. The population starts to save, buy less, both in Russian stores as well as
from abroad, so the volume of international shipping is reduced. The present
indicators are not too frightening: the fall was not one of twofold or threefold, but only
of around 10-15%. However, keep in mind that December is the peak season: many
buy gifts for the New Year, so the decline in international shipping is not so
noticeable. At another time, the effect would be more pronounced.
However, any crisis is a temporary phenomenon, so it makes no sense to radically
change the policy delivery. You just need time to adapt the delivery terms and prices
to fit the demands of buyers and our customers. Of course, we will continue to
cooperate with Europe and the USA, even in times of crisis.
33
In terms of the plans to reduce the customs duty-free limit from 1,000 euros per
month, does Boxberry win or lose from these changes?
It is too early to talk about it: all the changes are under discussion and the real
decision is still pending. I think that in itself the decrease of the duty-free limit is
unlikely to affect the number of items ordered. But if at the time the amount is agreed,
the government had still not adopted a working mechanism for the payment of fees
by the population (this question will be especially acute in the regions), we are faced
with a serious problem. People will stop placing large orders from abroad simply
because they will not understand how to pay the customs duties.
What is your most optimistic and most pessimistic forecast for 2015?
I do not believe in pessimistic scenarios such as the assumptions that “international
shipping will be banned” and in addition to sanctions there will be barriers for
international deliveries for private individuals from abroad. So let’s be optimistic: the
ruble will stop depreciating, the exchange rate stabilizes, people will leave their
saving mode, and therefore by the fall of 2015 we will restore the volume of
international shipping.
34
Erik Bosgoed of Groupon International:
“We may start exporting from Russia instead of importing”
Groupon, which began operating in Russia in 2010, has
asserted itself since then as a leader in the Russian coupon
sales market. The site has also developed a cross-border
business,
selling
virtually
anything
from
smartphones
to
tableware
and
cappuccinators to Russian consumers.
Erik Bosgoed, head of logistics at Groupon International GMBH Switserland,
explained to East-West Digital News how this business was built, why it has been
suspended due to the ruble crisis, and what can be expected next. This interview is
an excerpt from an industry report recently published by EWDN.
How and why did Groupon Russia start a cross-border business?
Groupon has a central DC from where we forward to all EMEA countries, including
Russia, the UAE, etc. There are also some issues peculiar to Russia – for instance,
passport data. We have quite good IT integration in Russia, in fact, so we can collect
passport data on our Russian website even before customs clearance.
Another particularity of business in Russia is that the legal limit for duty-free
purchases is still quite high – 1,000 euro per person and per month. In Europe it’s
mostly 25 euro per parcel, so the Russian market seems very attractive for us on this
point. With our buying power in EU, we can supply our customers in Russia with
products of special interest to local consumers.
What if the duty free limit is reduced to 150 euro per parcel?
That could happen, but the effect would not be that great, since most of the items we
ship to Russia are priced below 150 euro. The ruble’s fall certainly has a greater
impact.
You mean goods are getting too expensive for Russians?
Not exactly. The problem is that we cannot make a reliable forecast for the future with
such volatile currency fluctuations. If the ruble is losing more than 5% of its value
35
daily, we cannot set our pricing policy and we take a loss working with our suppliers –
they are paid in euro. The fall of the ruble was just too fast and steep, so we decided
to stop shipping to Russia for a while until the situation gets a bit more stable.
Don’t you think it may take months or even years for the ruble to get stronger
again? Aren’t you afraid of local competitors taking your niche?
I am not talking about the ruble returning to the same position it occupied at the
beginning of 2014. [Editor’s note: the Russian currency fell from around 30 rubles to
more than 60 rubles per USD in one year.] But the current instability, which was
caused by political factors, will not last forever. Once the “storm” is over, we can
review the situation and adapt. We are waiting for these extreme currency
fluctuations to stop so that we can define a proper pricing policy. It might also be that
we start exporting from Russia instead of importing. Any situation offers
opportunities, and Russia is interesting to work with in all cases.
Recently we opened a new warehouse in Belgium with about 30,000 usable sq.
meters. We’ve already shipped more than a million parcels from there. Such
infrastructure makes international shipments, including those to Russia, much more
flexible. We have thousands of suppliers from the EMEA region who can thus be
connected to Russia. They are just one click away from starting business again with
Russian consumers.
Should the situation take a long time to stabilize, what kind of loss would this
represent for Groupon?
Actually, the loss would not be that great. If we do not sell to Russia, it’s just one
market less; we already cover many others. The loss is difficult to estimate, as we
had just started in Russia and we are still growing everywhere. Russia could be a big
growth market, but since we have not yet reached its potential, the potential damage
is rather small.
Should we resume operations soon with a more stable currency, we could ship
about 10,000 parcels per month to Russia this year.
36
Vitaliy
Malykin,
CEO
of
SEO
consulting
company
Design4you: Most German online stores are blocked by their
own fears and risk aversion. That's why they do not go to
Russia.
Since
2006
Design4you
offers
consulting
about
SEO
optimization in e-commerce including cross-border business. The main office is in
Cologne, Germany.
Vitaly, your company offers SEO-optimization and consulting in entering the
Russian market. From which source do you have such a huge database for ecommerce analytics?
We offer analytics in addition to our main business, consulting and SEOOptimization. We translate news, statistics and others from Russian sites, give them
an interpretation and our own assessments. We use many sources - Oborot, RBC,
and so on. And we also conduct our own research - mainly on the German market of
e-commerce. Recently e.g. we have tested the 15 largest German online stores to
make up, how they can "catch up" the users that have gone. We have published a lot
of materiel on, for example, how to reduce the duty-free barrier. We have been
tracking this topic for about a year so far.
Are you using publicly available information or do you have insider sources?
In general, of course, we are using publicly available information. Sometimes we
order paid research - e.g., RBC, especially for our customers. We mostly have firsthand information from the Ukraine, as I grew up there and still have a lot of friends
business contacts there.
So are there many clients planning to enter the Ukrainian market at the
moment?
Now we have frozen this direction of work. Our last case was not very successful. I
will not tell any names, just get a brief summery. Some big German business was
planning to open an online store with delivery to the CIS. We have decided to test the
37
market in late 2013 in the Ukraine, as it is the closest one to Germany and it is more
convenient to deliver. They have made contracts with suppliers, logistics companies,
hired employees, fixed ERP and CRM systems and launched an advertising
campaign on the Ukrainian television. And they plans have just collapsed with the
start of the Maidan protest. The project was closed, the company has suffered huge
losses.
And this has happened despite the fact, that it is basically quite easy to enter the
Russian or Ukrainian market.
"Basically easy" - it is about how much money?
Well, I do not want to generalize, because it all depends on your strategy, indeed. It
depends on whether you will set an advertising or not, and which one; How flexible
your IT-system is; how much staff you are recruiting; what are your logistics costs,
whether you have a representation office in Russia or not, and so on. In principle, it
may be enough to have a five- or six-digit sum of money - this is just nothing for a
large Internet shop. Small businesses can even afford less. The practical advantage
of cross-border to CIS is that you do not need to pay any bribes to anyone - there are
only substantial costs, and they are all very manageable.
What exactly should a German online shop do to start shipping to Russia?
First, you need to organize your delivery and parcels pick up. Most internet shops in
Germany are doing it via DHL. Second, you organize your returns, which is
considerably more difficult. Third, you connect your website with Russian payment
systems. Then, preparing customs documents (it can be done electronically). Finally,
you translate at least the most popular goods into Russian and run advertisement
(mostly through yandex direct and google adwards).
To enter Russia you do not obligatory need a Russian customer base, any new
software, and so on. You can just start with basic investments and find our all
necessary point by doing test shipments.
The things is that most large online retailers in Germany do not work this way. They
have a long-term budget planning and they carefully calculate all risks. In other
words, they will not go to any new market just to see, if it brings money, and leave it
after a couple of months. This would be an image loss for them.
38
Basically, most of the German online stores are stopped in their plans by their own
fears and risk aversion. That's why they do not go to Russia - although they were
able to do so.
But do not you think their fears are often justified? After all, there are dozens of
technical difficulties coming up in a practice - e.g. when they start shipping
returns from Russia or make integration with a Russian logistics provider?
It really depends on a product category. It depends on whether your product will be
accepted by the Russian market or not. As a rule, luxury goods are success,
especially discount ones.
What logistics is concerned, basically, you can send any parcel, especially if the
amount is small. But if you ship via DHL, you need to compete at least a pallet. Not
all online stores ship that much to Russia, so that they would be able to complete a
pallet.
So the best way is to sale something of a smaller size or directly large amounts of
anything. In contrast, heavy bulky goods are pretty expensive to ship. It's also much
more work on customs documents and so on.
Then, as I said, be sure to consider refunds. Certain categories of goods cannot be
forwarded from the Russian Federation - we also dealt with such cases from our
experience.
By the way, why does the majority of online stores in Germany send to Russia
via DHL? Isn't it practically a monopoly of DHL on the cross-border market?
Yes, indeed. Perhaps it is because DHL is quite well known in Germany, so people
trust it. To send via DHL & Deutsche Post is the first thing that comes to your mind,
when you think about sending abroad. In addition, they offer a picking up service.
Well, picking up is a standard service, which is being offered by practically
every delivery company. Why do internet shops not think of e.g. DPD or
Russian delivery companies like boxberry?
Generally, DHL has a very wide range of solutions for any business. They have a
fully automated process, as they have long been on the market. Some of our clients,
by the way, are currently shipping via DPD. But there is a prejudice in Germany that
39
DPD offers a lower quality. Well, I'll tell you about my personal experience (I also
have my own online store, and we ship throughout Germany). So, it is true that some
customers have complained that if they have known the parcel would be shipped via
DPD, they would not have ordered it. There are no particular reasons for it, indeed,
but people just believe that DHL is better.
Do you think it is technically easy to organize shipments to Russia?
Well, yes, surely they are easy enough to organize. Of course there are some
objective problems - quite a traditional list of them. It takes long to ship throughout
Russia - but the local online stores face up to the same problem. What is more,
people in most regions are ready to wait for several weeks for their parcel. Besides
that, Russians are used to pay the courier in cash - and you also have to take it into
account. What theft parcels losses is concerned - from my personal experience I can
assure you, it has never happened to me yet, there was not a single parcel lost.
So you think that the fears of some German online stores have no basis?
Of course they do, especially if the internet store has not enough tested its delivery
and immediately invests a large sum of money into a project. I have already
described such a bad case to you ...
But the highlights are the following: Russia has - at least for now - a negative image
in Europe. Moreover, it is always changing the rules of the business game. So
making business in Russia is just too unpredictable.
However, do not you think that cross border loses its competitive advantages
in comparison to the domestic players? As Russians say, if you do not risk,
you never drink champagne.
Well, I would not say that domestic companies in Russia ever have any competitive
advantages towards the cross-border model. In my eyes, it is not cheaper to sell
directly from Russia or Ukraine as to sell from abroad. You can judge yourself: you
are forced to constantly pay bribes to any institution - to a fire inspection, tax
inspection, customs service and so on. So I think that even despite the current
difficulties, it is easier to ship as B2C from abroad than to organize a domestic
business from Russian or Ukraine.
40
Nevertheless, the majority of big German internet businesses are playing on
the Russian domestic market. Remember adidas, Otto or KupiVip.
That's true, think of LaModa - the brainchild of Zalando and Rocket Internet. German
online stores that can afford it, sell indeed from Russia and not engaged into the
cross-border business.
Is it such a German strategy to minimize the risks?
Maybe. There are many factors that count, but if you just calculate the expenses,
cross border is cheaper than local sales. As for me, for the sake of minimizing costs
and increase a profit, you can take any risks. Frankly speaking, I do not see much
sense in opening a representative office in Russia - is causes unnecessary costs and
outlay.
Do you think it is actually possible now, regarding the situation in the Ukraine
and in Russia, to organize a profitable model of shipments to these countries?
Sure it is. But it all depends on the niche, in which your goods are sold. There are
some best-sellers which are well-sold any time, like baby products, auto parts or
luxury goods.
Most customers prefer now to hang on and not to enter the Russian or Ukrainian
markets right now to avoid risks. I'll give you an example. One client of ours, a seller
of industrial tubes in the B2C segment - has already prepared all the infrastructure,
has translated all the positions into Russian and so on. But he has still not risked to
enter the Russian market for its high risks at the moment. This mainly happens due
to a decrease of purchasing power: it is not known, whether there will be a demand
on German goods, if they are not "luxury".
Thank you for the conversation!
41
Gordon Charles Thompson, CEO of Wummelkiste.de:
The Russian online market is hyper competitive, which
makes it difficult to enter the market without having your
lunch eaten. But, Russia has many awesome programmers!
Wummelkiste is an Educational company which focuses on
making educational crafting kits which have a learning effect. They sell their kits on a
subscription model, so parents and kids get a new box delivered each month to there
mail box. Their head quarters are located in Berlin.
Gordon, Wummelkiste is actually quite well-known in Germany. Do you also
ship abroad?
Our core business is selling educational crafting kits, which we sell online as a
monthly subscription. These products are only available in Germany and Austria, due
to language restrictions. We have had cooperation partners like Sony and Henkel.
With these partners we have made educational products that have been sold all over
the world, but Russia has not been one of the markets that we have shipped to.
Have you got any other online projects?
Yes! We have a very exiting project, which my team and I have been working on for
the past 6 months. We are building games, which will help teach children the skills
needed for reading, writing and math comprehension. We will sell our educational
games all over the world. The fun thing about digital projects is that they scale very
well, so you can get global distribution and relatively low cost.
Also going to Eastern Europe, e.g. Russia?
Russia is a very interesting market as it has a large population with lots of kids. This
would be very applicable for us, but the problem is that competition in the digital
space is very intense in Russia. There are many good programmers there, so when
there is a good business idea that gains a little traction in Russia, the idea is cloned
very quickly. There is also a lot of risk capital flouting around Russia. So your
competitors can get good funding rather fast. This makes it a very hard environment
42
to compete in. Russia has the situation of too many chiefs and not enough Indians.
Were as Western Europe tends to have too many Indians and not enough chiefs.
What we do like a lot about Russia is its programmer and Angel Investors. The
quality of the programmers that come out of Russia is excellent. The investors are
able to make investment decisions very quickly, which is great when you have a fast
moving business, which needs fast moving capital.
So you do not take Russian market in account at all?
We would not enter Russia alone. We would need the right partner to work with in
order to enter the Russian market. We would also need to find a Russian language
specialist to help us convert our games over to the Russian language, as our games
are very strongly language based. Russia has many good programmers, so we often
look for IT specialists there, so we will always have a little to do with Russia.
Thank you for your comments!
43
Francesco
D'Avella,
CEO
of
the
Platform
Storeden:
Russia is just a too huge country to ship there
Storeden is a multichannel platform to built e-commerce with a native
marketplace. The project was launched in Italy in September 2014
and was realized by the Italian company Projectmoon. Apart from providing a
multichannel integration service for online stores, Storeden operates its own Internetshop on the same platform and is planning to ship abroad while expanding.
Francesco, you've launched your marketplace not so long ago. How many
online store are now in?
Three hundred. But you are right, we are a very young project, we've started in
September 2014, so we've just celebrated our fifth month' birthday. As we've
launched our project in Italy, all our clients are Italian online stores so far. Most of
them are of middle size, but there are also some big ones. We have e.g. such fashion
brands as Versace, Red Valentino, Aquilano Rimondi, Elisabetta Franchi, Dolly and
others.
What is special about your business model?
It's no usual marketplace, in fact. We do not only offer our Internet-platform to built
ecommerce we have also a marketplace but is also allow integration of online-stores
with other platforms like Facebook, Amazon, eBay and others. Some clients use
storeden just as an integration service.
Do you know how many of your clients ship outside Italy?
It should be around 20%. Most of them ship to Europe, I mean throughout the EU.
Mostly to Germany or UK, shipping mainly by DHL or UPS. We also have six or
seven shops that deliver to Asia.
Besides that, we have our own online-store on the Storeden platform and also
thinking of going abroad. You know, we are like a little Amazon - a generalist
but just smaller.
44
Do you also consider Eastern Europe for your expansion? Russia and Ukraine are
huge markets in fact.
Well, perhaps we'll do it later - for now it's just too early for us to think of going to
Eastern Europe. Russia could be an important market for our production, that's for
sure. But Russia is also very big, so it may come to difficulties with logistics there. We
also need to localize our service, if we want to go to the Russian market, and it takes
time. And it's time consuming to find a good logistics partner there, too. After all, I just
feel like needing more information about the Russian market, for instance about
customs, taxation, logistics, etc.
Thank you very much and enjoy your sales!
45
Johannes
Nielsen,
Co-Founder
of
brandnooz:
If the political situation stays like it is now, we won’t enter
the Russian market.
Johannes, how does brandnooz work?
We help people discover new consumer products by shipping so called surprise
boxes, mostly with new products, which are not being sold in local supermarkets yet.
You can make a single order or subscribe to a monthly delivery.
It's an interesting business model, because we also give corporate clients an
opportunity to build awareness and trial as they introduce new products. Consumer
good companies are willing to pay for this marketing support. Therefore we have two
major revenue streams and a lot of fun with brandnooz.
How big are you at the moment?
We ship about 20.000 parcels per month, and it's just the beginning. We have our
subscriber community in Germany, there are hundreds of comments for each new
product on our web site, and so on. brandnooz is well established in Germany - try to
google "new food" or "food box" in German and you will see our status.
Do you ship only throughout Germany?
For the time being we also ship to the Czech Republic. But we are considering other
markets, as well.
What about Russia, e.g.?
Well, we were thinking about the Russian market, indeed. We do cooperate with
Burda, and Burda is extremely active in Russia. Russia is a huge market, it's quite
attractive in many ways.
If so, are you planning to ship to Russia one day?
Let's call it like this: if the political situation stays like it is now, not. It is too risky for
us. We are a commercial project, which is to 100% financed by ourselves. So if we
make a wrong investment, we'll fail. And each new foreign market is a huge
46
investment. It's for sure that we'll make losses during the whole first year, wherever
we go. But if it turns out to be a wrong investment, these losses will never repay.
Apart from this, we already had a negative experience while going to two new
markets at the same time. While shipping to Germany and to the Czech Republic, we
also tried to enter Poland. But we decided to stop the Polish operation for now to
focus on the two existing markets.
Does it mean, you've stopped your expansion to Eastern Europe?
Well, we still have a sales agent in Poland, so that we can restart, if we want. But
we've put the Polish project on hold to not overextend ourselves at a time where
we’re still owner-financed. However, Eastern Europe is extremely attractive for us,
because it represents our target group of brand-minded consumers who like to enjoy
the good things in life. So we still see a big potential there.
Thank you very much and good luck!
Martin Wolthusen, CEO of Brillibrum: Asian region is not really priority. All textile is
being produced in Vietnam and India anyway, so it's easier for locals to sell it.
German internet store Brillibrum sells furniture and house accessories. They have
just launched a new version of their online store and are also planning to expand
abroad.
Martin, how are things going at the moment?
Quite well, actually. In 2014 we had 33% increase in our sales compared to 2013. So
it's quite a good result, I think. We are on Amazon since 2014, so it's influenced our
sales a lot.
Brillibrum is German-speaking at the moment. Are you focused on the German
market so much?
Basically, not. It is true that we ship up to 70% throughout Germany, but 30% of our
business is cross-border. We already ship to more than 50 countries all over the
world. You said our internet store is basically in German. But we also sell through
marketplaces, such as eBay, Amazon or a Japanese marketplace Rakuten. In fact,
we do ship to every continent.
47
To which countries do you ship more?
Apart from Germany, these are America, Australia, France, Italy and many others.
Actually, Asian region is not really our priority, because the competition towards
Chinese internet shops is enormous there. All textile items are produced in Asia - for
instance in Vietnam and India - anyway, so it's much cheaper for Asia to sell it in their
own region or to ship anywhere else.
How do you ship abroad?
As usual, we use DHL, DPD, German Post or other international postal services. In
fact, if it's less than 2 kilo, we ship it as a letter.
And you never have any problems shipping abroad? I mean customs, logistics,
and so on.
Not really, it goes quite well. I mean, if you aware of how it works, you just watch out
at right places.
You said you do ship to Russia. Were you touched by the ruble crisis anyhow?
I wouldn't say that. We do not have such a big sales volume in Russia to be able to
tell you the dynamics. It's all about some five parcels per month, maybe. So we didn't
really start selling less to Russia, no.
Does it mean, Russia is not your strategic priority?
Not really. China is anyway a much huger market as Russia, so China may be rather
attractive for many online retailers - however, not for us. At the moment we sell
approx. the same amount to China as to Russia. And apart from this, it's the
countries I've told you about.
Yes, thank you a lot!
48
Vladislav
Zaykin,
cofounder
of
RusBid:
"Cross border business was growing in Russia so rapidly in the
recent years, that it seemed, it would always be like this"
Vladislav, how does the RusBid model work?
RusBid is a parcels consolidating service. Recipients from Russia and Ukraine make
an order in a European internet shop stating our address. It is because many
European online stores have no delivery to Russia and other CIS countries, we
consolidate parcels in packages of 20-30 kg and send them to the destination
address.
Which European online stores do you work with?
Well, we do not work with them directly, we just receive their orders. Usually it is
about well-known fashion brands, baby goods or electronics. The Chinese and the
American office of RusBid do the same.
Russian customers are ordering more and more from Chinese online stores.
Do you also see this trend?
Well, not really. As for our Chinese colleagues, their shipping volumes are also falling
since the ruble crisis. The Chinese currency is going up at the moment, so the goods
are getting more and more expensive for Russians.
And what about your German office?
We have recently moved, so we now have a more spacious warehouse near
Potsdam. However, our shipping volumes are falling, as you see. They have
dramatically reduced
since the middle of November, when the ruble devaluated
rapidly. After that, the volume has fallen down sharply by 4-5 times. So now, despite
the New Year boom, the number of parcels has not really increased.
You also ship to Ukraine? Do you have the same situation there?
The situation is similar there, indeed. In Ukraine the number of orders was falling
since the beginning of 2014, which means after the Maidan demonstration. Now the
amount of parcels is pretty the same for Russia and Ukraine.
49
Are you hoping for a correction of this trend?
It would be desirable, of course, to have good news soon, but most likely is that there
are no big changes expected in 2015. Our business is rather small, so if the current
trends continues, our business will start to die off. Therefore, in the coming year we
are planning to launch a new project - another online store, but this time just for the
inner German market.
Does it mean you take into account to stop working with Russia?
No, I am not talking about the interruption of our business. Of course we will continue
to ship to Russia and to Ukraine. But the current situation is unstable, so we cannot
accurately predict it. That is why we need to minimize the risks and to redistribute our
business.
You see, the current situation is of course not catastrophic but still unpleasant. Crossborder business with Russia was growing that rapidly in the last few years, that it
seemed, it would always be like this. It has a certain similarity with the oil price,
where no one has expected the recession. Nevertheless, Russia is still a huge
market for Europe, so we are planning to stay there.
Thank you very much!
50
Giovanni
Cappellotto,
e-commerce
strategist:
Many other markets are no better than Russia. Brazil is the
same, just with a high customs duty.
Giovanni Cappellotto is one of best known e-commerce
bloggers and consultants in Italy. Since 2008 he is regularly
blogging on e-commerce including cross-border issues.
Giovanni, which countries are especially attractive for Italian online stores?
Well, I am strongly convinced that Europe is the most attractive place for shipping
there at the moment. It touches especially Germany and UK, although there are
many cons as well. Germany is easy to ship to, but there are just too many local
player there, so the competition is just too high. The same is true for UK. If we speak
about Eastern Europe, many Italian online stores ship to Czech Republic or Slovenia,
as the situation is quite advantageous there.
Which are the most crucial points to prevent Italians from shipping to Russia?
Obviously the country is just too big, so that it obligatory comes to frictions in
logistics. Another obstacle is customs. I spoke to many online stores - it is also true
that sometimes some items get lost or stolen while shipping to Russia. Besides that,
we should consider the political situation at the moment, which makes it too risky to
enter the Russian market at the moment.
What do you mean exactly by risky?
There are many factors. The most significant one is the value of ruble, which leads to
the decrease of cross-border volume. High inflation is also important. But apart from
that risks, there are several categories of products that are just not easy to import to
Russia because of customs conditions. I'm talking mainly about foods and spirits,
which are quite typical for Italian exportation. It is as important for Italy as fashion
articles.
You say you regularly talk to Italian online stores shipping to Russia. What is
your feeling - are they planning to stay on the Russian market and hang on, or
are they leaving?
51
Most just stay and hang on or adapt their strategy. For I must say, many other
markets are no better than Russia.
Which markets are most important for Italy?
Apart from the EU countries, which are obviously the most important ones, I would
range it like this. China is extremely important, as it is a huge market, just by the
number of consumers. America is important, too, which means US and Canada.
Brazil and its Sao Paolo with 20 Mln people is also an important destination.
Although Brazil is much worse than Russia. Duty is too high there and it comes to
similar problems with local logistics and customs in Brazil.
What about US?
America is easier to import goods, indeed. Well, if you ask me, I would range it like
this: UK, Germany, rest of EU and US follows.
Thank you for your estimation!
52
Malcolm
Lowry,
Founder
and
CEO
of
"SouthWestFoods.co": When going abroad, we have
to consider our margin and extra costs.
SouthWestFoods (www.btjerky.com) is an example of
a good business idea. This food service is taking profit
of an empty market niche in Europe. The one-product online store was successfully
launched on the German market in 2014. Now it is ready to go abroad.
Malcolm, you are a one-product online-store. What do you sell?
Well, SouthWestFoods is based in Berlin and we've launched our shop about half a
year ago. The product we sell is quite new for Germany - it's beef jerky. We've taken
this concept from the US, where it was already widely spread.
So, how well have you been doing in Germany so far?
As we've just launched our online-store, we are still having some difficulties with
delivery at the moment, it still comes to delays sometimes. But the rest works ok, and
we're planning to standardize the whole process in a couple of months.
Why are you actually based in Germany? Wouldn't it be cheaper to ship crossborder from the US?
No, it wouldn't. The reason is the high duty level, it's 19% while shipping from the US
to Germany. And it's also quicker and smarter to organize the whole process in
Germany. I know many internet-shops that refuse from shipping cross-border to
Germany just because of a high duty barrier.
In fact, we are quite successful with our product in Germany at the moment. There is
no direct competition and Germany is also a big country with many potential clients.
Are you planning to go abroad with your product?
Sure. We've already started shipping to other EU countries. To begin with, UK is
especcially interesting for us, but also other EU countries. You know, beef jerky is
quite well known as a product in the US - but here in Europe it is just the beginning.
Of course we also take non-EU countries into account to ship to.
53
Russia, too?
Sure, why not. Until now we've never had Russian clients, but probably if we
organize our sales to Russia well, it could work. However, I just need more
information about several points. Taxation, customs, logistics, clients orientation, etc.
- we just need to study all these fields, as we know too little about Russian
customers. Besides that, I have no idea if B2C importation of meat is actually legal in
Russia. You see, we've got quite a special product, so there are many points to be
taken into account. But of course, if we decide to ship to Russia, we'll start with a
test.
What is going to influence your final decision on whether shipping to Russia
and other countries, or not?
There are many factors, but finally, it is all about our margins. There are a lot of extra
costs coming for shipping abroad. There are e.g. costs for local payment providers,
freight company, etc. So we have to consider all the costs and our final margin, when
going abroad.
Thank you a lot!
54
Andreas Stängle, software producer for e-commerce "proMO": Cross border is
technically no big difference to internal shipments. It just costs more.
ProMOis a German windows-based business standard software for small and
medium online shops and Multi-Chanel-Companies aimed for controlling of the
internal processes.
Andreas, how can proMO help by cross-border shipments into non-EU
countries, e.g. to Russia?
Well, cross border as a process has technically no big difference from internal
shipments in Germany. The biggest difference is the preparation of customs papers.
Basically, our clients can prepare all necessary customs papers for shipment to any
third country - like a customs declaration or other item-specific customs documents.
For the rest of the process, it makes technically no difference if its local shipments or
cross-border. Cross-border just costs more. But technically as I said, it makes no
difference which label you print out with our software - an international one or for EU.
The parcels just join your Russia-flow and are being taken by international DHL
shipment - or it joins your German flow and is shipped to Germany.
Does it make a difference in this case, which logistics provider an internet
shop uses?
Not really. Most German internet shops - also our clients - work with DHL. For this
reason we enable software integration of most common CMS and shop systems
used in Germany with the system of DHL. We also do this for DPD, UPS,GLS, UPS
and many haulage contractorat the moment.
You've mentioned that you choose the most common CMS shop systems for
your software. Which are they in Germany?
At the moment we use ten of them. These are Shopware, Magento, Xt:commerce,
Websale, Oxid and some others. We can enable direct communication of a shipper
with the internet-shop through our module or data transmission. Basically, we do not
care which system our client really has - as far as our module is being used, we can
technically enable their communication with the shipping service.
55
Is it possible to enable communication between the shippers and online-sellers
system directly, without using your module?
Yes it is, but in this case there will be no relation to the warehousing systems of the
online-shop. It works like this: as soon as you have an consignees address in your
system, you can automatically check where exactly it is stored in the your
warehouse. So it allows an internet shop to keep all information in one place and
have control over it.
You do have some clients that ship abroad. Where do you see the biggest
expenditures in cross-border?
Well, generally shipping abroad is of course much more expensive than internal
shipments. You should consider a shipping fee, insurance, internationalization costs,
customs costs, etc. EU is also a big market, so many our clients ship only to EU, as it
is in fact much easier and cheaper. As for me, the most difficult aspects about crossborder are localization of your business in the wide sense, and accounting.
Thank you for sharing your ideas!
56

Liebe Leserinnen und Leser, immer mehr Unternehmen in

Transcription

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