Udma digest 10th issue

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Udma digest 10th issue

  1. 1. 10th ISSUE November 2012 CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST DEAR COLLEAGUES! It is not just another issue of Digest! This is a I am convinced that such meetings of the striking confirmation of the fact that Ukraine professionals will make Ukraine closer and has a significant potential for market distance- more understandable for European and Russian selling. And it›s not just a random guess: every companies and lay the foundation for the year we experience the evidence of this potential successful development of your business on in practice: the emergence of new players from distance-selling in Ukraine. In turn, service abroad at the Ukrainian market, improving market companies, and above all – logistic partners infrastructure efforts of Ukrainian companies, endeavor to comfort your business development and, of course, consumption culture boost of the in Ukraine. And today, being the head of one Ukrainians. of the leading delivery services in Ukraine I can This can be confirmed by the results of the trade confidently guarantee good quality European mission in Ukraine for distance-selling companies. service of logistics companies. Now on these pages of the Digest, we present I hope that every fact and every trend covered on you with most interesting facts voiced by experts these pages of Digests, will strengthen your faith in Odessa. in Ukraine as worthy of your presence market! Sincerely, Viktor Kuchma, Director General of Financial-Industrial Group ROSAN «Trade mission in Ukraine: 360˚ over distance selling market potential» had a great success. FOR DIGEST We’ve reached our objective and create a new communicational platform which gathered ESPECIALLY people from Germany, Switzerland, Russia, the USA, Kazakhstan and Slovakia interested in distance selling and e-commerce market in Ukraine. We hope that the first meeting with Ukraine in the framework of the Trade Mission made an impression of our country and in future our guests can find the right projects and the right people for their successful implementation. During Trade Mission Days our guests received deep view of our market that gave them an opportunity to understand our country better. Especially for Digest we published the most interesting and bright reports from Trade Mission Days, which you’ll find below. We hope that this information will be useful for you and create an opportunity to join our Trade Mission Team distantly and share our experience! Julia Pavlenko, Chief Executive Officer Ukrainian Direct Marketing Association NEWS Trade Mission in Ukraine for Mail Order and E-commerce companies was successfullyHOT held in Odessa on September 20-21, 2012. Basic information from the presentations about the willingness of the country to new market challenges you can find below on the pages 2-7. And see you soon in January – in Kazakhstan!
  2. 2. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012CURRENT SITUATION AND E-COMMERCE TRENDSIN UKRAINE – UNIQUE MARKET RESEARCHVadim Pilipenko, So far, about a third of payments for online bookings are madeDeputy General Director on Strategic Marketing in cash upon delivery, and more than half of users consider itAukro-Ukraine tone the best way to pay – compared with payment at the offices, by credit card companies, through bank transfers, pay-According to experts, in three years the internet penetration ment services and other means. And at the time when the in-in Ukraine is expected to be 45% and 80% of Internet users habitants of cities, and internet users mostly own bank cards,(about 16 million) shopping online. This would mean a growth about 40% of the first at least once bought with them on thefor remote and distance selling market, since, according to the internet and in the second case, the percentage is more than –speaker, this year Internet penetration is 35% and only half of 70%. But buying experience and a desire to make new acquisi-the users are buying on the net. At the same time, 2012 is char- tions present in both categories – though the vast majority ofacterized as the period of the market formation which in turn urban residents and users.will lead to increased competition. Consumer mentality has changed: compared with 2009 inThe required market demand exists, as a critical mass of buyers 2011, for most buyers, the main incentive to buy was the low-have been formed. Modern logistics covers 50% of the popula- est price on the Internet (it is understood by 54% of consum-tion and 75% of Internet users and the prospective growth in ers in 2011 while 42% – in 2009), fewer consumers think thisthis segment can only be secured by offering improved service way of buying to be risky (here there was a decline from 51%and coverage. As for the payments, the main limiting factor is to 43%), and the consumer is experienced – less Ukrainiansthe lack of confidence, which the entry of safe payment system consider online shopping to be a difficult task (10% in 2011is likely to overcome. vs. 13% in 2009). Allegro Group Ukraine is the Vcene.ua – one of the leading price ModnaKasta.ua – online shopping largest holding company in the field comparison sites for goods. club. of e-commerce of the Ukrainian In- ternet space. As of early 2012, the PayU.ua – Ukraine’s first international All Allegro (GU) projects are fo- holding includes eight large special- processing center that enables online cused primarily on providing the ized projects, each of which is a lead- shopping easy, fast and safe to ac- best possible services and opportu- er in its segment in Uanet: cept payments from their customers nities to the population in making through a variety of payment options. reliable and profitable online pur- Aukro.ua – a number one place to chases. buy and sell on the Internet. Prom.ua – Ukrainian shopping cen­ ter on the Internet. Total Allegro Group Ukraine projects Emarket.ua, Slando.ua – the larg- attendance exceeds 6 million inter- est private boards of Ukrainians’ on- Ria.ua – holding, which includes net users a month! line advertisements. both print and online media.FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 2
  3. 3. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012The total audience of Internet users today amounts to 15 mil- For players in the segment of the general classification, whichlion, 10 million of them are already online buyers or going work in a format c2c are SLANDO.UA, EMARKET.UA (they coverto become one. At the same time, a monthly audience of 3 about 80% of the market), as well as TORG.UA, RIA.UA, OLX.million customers and a monthly reach of any e-commerce is COM.UA. This segment is characterized by the sale of usedabout 85% of Internet users. goods, regional sales and minimum monetization transactions.Most of all online shoppers are interested in consumer elec- Among the most popular online auctions are AUKRO.UA,tronics and household appliances, mobile phones, computers, PROM.UA (taking about 75% of the market), and ABO.UA,equipment, clothing, jewelry, books, music and films, cosmet- TORG.ALKAR.NET, ARBOOZ.UA. The distinctive characteristicsics, various tickets, children accessories and toys, sports equip- of this segment, operating in formats b2c and b2b, is the lowment. average price and the fact that the very business model has not passed the stage of formation yet.Meanwhile, about half of the market, which is estimated at 928million dollars, is occupied by online shopping (49%), as a busi- Among the services group discounts GROUPON.COM.UA,ness model in the segment of consumer goods and services. POKUPON.UA and superdeal.com.ua are ahead, and amongThen there are services for the general classification (general the shopping clubs are such as MODNACASTA.UA, PRESTIGE.classified) (23%), online auctions (20%), services group dis- UA and LEBOUTIQUE.COM.UA. These market players cancounts (5%) and shopping clubs (3%). boast soaring popularity, relatively high marginality and links to off-line market.Online stores work in a format b2c and its market leaders areROZETKA.UA (this seller owns about half of the market), FO- Also important is the fact that most of the market leaders (inTOMAG.UA, ALLO.UA, FOTOS.UA, MOBILLUCK.UA, SOKOL. different models) are owned by foreign investors (AUKRO.UA,UA, BONPRIX.UA. This is a segment of the illegal circulation: PROM.UA, EMARKET.UA, SLANDO.UA, MODNAKASTA.UAphone orders and payment on the order. Most orders of con- (AG), TORG.UA (Kinnevik Investments, AVITO. RU), GROU-sumer electronics and major home appliances, mobile phones, PON.COM.UA, BONPRIX.UA ...) and only one of them belongsclothing, children’s goods, and jewelry. to the Ukrainian private owner – ROZETKA.UA.More and more Ukrainians understand the benefits of online any chance of rapid growth until 2015. Especially if you willshopping: the market has experienced buyer who learned be there to assist in the reform of taxation, interest in offline-through online stores to save money and time to buy. There- business, having good players, the quantitative and qualita-fore, in Ukraine shopping clubs and discount services are tive growth of the user base, and other economic factors,gaining momentum. They, as well as online auctions and tra- which are already present in Ukraine, as well as their hopesditional online shopping, online ticket vendors, games, appli- for a more intense effect.cations and other models of commerce in the network haveFRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 3
  4. 4. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012ANALYSIS OF ONLINE AND OFFLINE MEDIA INUKRAINE. DEVELOPMENT LEVEL. LEADERS. CASESLilya Gorelaya, Although, statistically, every magazine read by an average ofManaging Partner 5 people, a quarter of Ukrainians say that they do not readMarketing Group OS-Direct the paper press, and only 40% regularly buy newspapers, sub- scribe to multiple editions or at least one. The rest buy it fromOff-line media are losing the battle to the internet in Ukraine. time to time.The market growth rate of advertising in the press and on theInternet can not be compared. Though growth is present in If we impose on the data specific figures the average cost ofthe offline and online but the latter is far ahead of his older the tabs in the press, prices unaddressed distribution and per-rival. centage of average it seems to be a fairly dubious picture of the success of advertising in the press.This is accounted for the fact that the Ukrainians read too lit-tle (1.22 books per year), rarely visit cinemas (0.46 per year), Everything is totally different with the online market. Accord-but at the same time are very active on the Internet (especially ing to the data, about 20 million people access the networkblogging – 5th place in the world in Entries Account at Live- in Ukraine, including more than 17 million being regular users,journal.com. and almost all of them are regular users of devices.This accounts for the fact that the Ukrainians read too little The majority (over 70%) surf the Internet from home, 14% –(1.22 books per year), rarely visit cinemas (0.46 per year), but from offices, 8% – on mobile devices.at the same time are very active on the Internet (especiallyblogging – 5th place in the world in Entries Account at Live-journal.com.Meanwhile, in Ukraine, there are a lot of publishers thatcan boast some good circulation: UMH – 1398400, Mega-Press – 976 000, Burda – 927 000, Edipress – 690 000, Blitz-inform – 450 000, Independent Media – 365 000, PGL – 201380. The most popular (also by circulation) editions, for ex-ample, for the entertainment of the female audience are:Natalie – 450 000, Yedinstvennaya – 265 000, Horoshyyesovety – 240 000, Otdohni – 200 000, Cosmopolitan – 185000, Lisa – 160 000, Polina – 155000, Caravan – 140 000,Blik – 105 000, S toboy – 100 000. In the case of the male Separate role here belongs to social networks: Profiles inaudience in front of all the publications Maxim – 88,000, Vkontakte has 7,000,000 users, classmates – 5 million, andCool magazine – 70110, Men’s Health – 70,000, Kosmo on Facebook – 2 million. Against this background, the adver-news – 70 000. In the segment of tabloid leaders are the tising market is growing rapidly: in the year it has doubledfollowing ProTV – 451 000, TVweek – 341 600, Teleguide – and this year it will be about 800 million UAH (about $ 100323 000, Telescope – 296 160, TVSeven – 118550, TV Park million, which is about one third of the advertising market in– 117 400, Weekly – 115 000, Serial – 106600, Programka the press).– 105 0000, TV-Screen – 100 000.A vivid example of said above could serve a case of Bon Prix • 1.5 months – 2,500 fans (who found the page themselves);brand and its experience with the audience through a social • mailing to the customer database brought 10,000 fans;network Vkontakte. Here are some facts about the achieve- • natural activity of a growth rate of 1000 fans in 20-25 days;ments of the page, that was launched more than a year ago • today the page has over 31,500 fans.– on the 1st of September 2011: Details of the report can be found here.FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 4
  5. 5. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012WHO AND WHY IS BUYING FROM CATALOGUES,THE INTERNET AND TV SHOPS IN UKRAINEYaroslav Pelykh, As for the use of the Internet by Ukrainians, about half ofmarket analyst the population of large cities use it for selling and buyingConsulting Company NSBK purposes. Other purposes of surfing online can be referred to as multimedia consumption, studying resources search, in-In order to be successful in the market, it is necessary to thor- ternet calls. Also of interest is the steady Internet penetrationoughly examine its potential, including the consumer. This increase into the country, where more than 15 million regularprinciple is true in the case of Ukraine, which population it is users are over 16 years old.important to get to know with, to carefully respond to its re-quests in the field of catalogue and online trading. The consumer online shopping portrait is the following: • man aged 26-41 years old (55-60% chance);Some words about a general portrait of the Ukrainian consumer. • living in Kiev or any other million inhabitant city (probability – 50-55%);Analyzing the structure of the population of Ukraine it is worth • the average bill per order is 30 euros.mentioning: • the majority are women; Basic buying motive in this case is the desire to buy a unique • about two-thirds of Ukrainians – young and working-age product, at a lower price, avoiding visiting traditional store and population; delivery of goods, availability of detailed information about • approximately 70% of Ukrainians live in cities. the product and its properties.Given these data and the steady growth of GDP per capita, it A separate category is TVshopping consumers, which theseems quite favourable to do business in Ukraine. More de- company NSBK sees as:tailed studies led to such results in the individual categories of • woman aged 35-45 years (60-70% chance);consumption: • living in Kiev or any other million inhabitant city (probability – 50-55%);A consumer of distance-selling companies might be: • make repeated purchase (30% probability); • a woman (75-80% chance); • the average bill per order estimates 80-100 Euros. • living in a city with a population of less than 100 thousand people, PGT, village (probability – 50-55%); The main motives for the purchase of goods from TVshopping • on average, make 2 purchases per year; is an impulsive decision to buy a useful thing for the household • the average bill per order is 45 euros. and health care here and now.The main reasons for buying in this segment are inability to More information about this study can be found here.realize their consumer opportunities (due to poorly developedregional retail) and the desire to buy something unique.UKRAINIAN LOGISTICS MARKET IS IMPROVING EVERYYEAR OUTGOING ITS NEIGHBOURSDmitry Seleznev,Strategic Development Director«PGK GROUP»Big leap in world ranking logistics efficiency of the World Bank(Logistics Performance Index) Ukraine has implemented overthe past two years. The country shifted from 102 place in 2010to 66 – in 2012. At the same time, the nearest neighbours ofUkraine, Belarus and Russia fell in the rankings and occupied 91and 95 places respectively.Obviously, in Ukraine this growth is due to the gradual elimina-tion of typical logistics market problems in the FSU. This lack ofdevelopment of the network of roads, lack of modern cargoterminals, a high level of deterioration of road, rail and othertransport component, as well as increasing its obsolescence.At the same time, the turnover of Ukrainian market of e-com-merce increased by an average of 60-80% yearly, and in someproduct categories – by 150-200%. And it is, according toanalysts, more than $ 1 billion. Acceleration of market growthcould contribute to the determination of procedures for han- World ranking of logistics efficiency of the World Bank (Logis-dling electronic money, the availability of cheap credit for the tics Performance Index) is based on the following criteria: ef-development, improvement of tax and customs codes. ficiency of customs clearance procedures, infrastructure, trans- port logistics, the logistics industry expertise, and the ability to* World Bank of logistics efficiency (Logistics Performance Index) control the international supply procedure.FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 5
  6. 6. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012PERSONAL DATA PROTECTION IN UKRAINE.WHAT IS TO BE EXPECTED BY BUSINESS?Dmitrij Yovdij,PartnerLaw Company «Leetas»The Law of Ukraine on personal data protection , which en-tered into force on 1 July this year, and can not but influencethe market distance selling. In the current edition of the docu-ment it is determined as: • formal approach; • strict requirements for processors of personal data; • lack of mechanism to implement the Act; • availability of provisions that are not feasible in the realities of the business processes.The law as amended, requires a written or any documentedform of consent to the processing of personal data. At thesame time, the draft of changes to the law offers any possibleform, which enables to confirm such consent. Under the Act, as amended, personal data check in the publicConsent to the processing of personal data for the conclusion register is required in all the «PDB» and draft amendments toand performance of the contract as amended is required in all the law insists that it is not necessary to register ‹human’ PDB.cases, and in the amendment to the Act it is required for theconclusion or performance of a contract, the party, which is Regarding the possibility for self-regulation in the field of per-the subject of personal data. sonal data protection law, as amended provides for the crea- tion of corporate codes of conduct on the processing of per-It is required that personal data written notification of the sub- sonal data in certain areas. Meanwhile, the draft amendmentject to the inclusion of their personal data (PD) at the base of to the Act provides for the harmonization of codes of conductpersonal data (BAP) under the terms of the law, is amended by by the authorized body, effectively giving the codes of con-PD handler during 10 days in all cases without exception, and duct of official status.it is only in writing. Meanwhile, the draft amendment to the Actprovides that such a need is not required for the conclusion Obviously, these innovations are creating more favourableor performance of a contract which is the subject of personal conditions for work in Ukraine, where both local companiesdata and is carried out in any acceptable form. as well as those who are attracted to this promising market will benefit.TAX ASPECTS OF CORPORATE DISTANCE-SELLINGFOR NON-RESIDENTS IN UKRAINE.THE SEARCH FOR OPTIMAL LEGAL MODELDmitrij Yovdij, of Ukraine;Partner • income tax:Law Company «Leetas» – by 31.12.2012 – 21%; – from 01.01.2013 to 31.12.2013 – 19%;There are several basic options for the distance-selling com- – from 01/01/2014 – 16%;pany’s business for non-residents of Ukraine: • income tax expense for the permanent missions – 15%; • through the registered in the territory of Ukraine legal en- • unified social contribution – 37% of the RFP Fund; tity or representation; • 20% VAT on the sale of goods to consumers. • through the use of business entities being on a simplified system of taxation; Activity with the use of Entrepreneurs group also has its disad- • without business registration in Ukraine. vantages and risks.Meanwhile, there are some disadvantages and risks encoun- Entrepreneur pays single tax flat tax in the amount of:tered by the legal entity with registration in Ukraine: – up to 20% of the minimum s n (1st and 2nd group) – the • a significant tax burden on economic entities of Ukraine; maximum annual amount of revenue – up to 1 million UAH; • fiscal approach of the tax authorities, aimed at filling the – 5% of revenue (third group) – the maximum annual rev state budget; enue of up to 3 million USD; • the litigation tax payer and tax services in 9 of 10 cases of – 10% of revenue (Group 5) – the maximum amount of rev tax benefit; enue up to 20 million USD. • frequent tax audits (usually with additional taxes and pen- alties); Without registration in Ukraine legal entities have their advan- • the complexity of registration (especially for offices). tages.A list of current Ukrainian taxes includes: Prerequisite for this is the import of goods into Ukraine only • 20% import VAT + customs duty under the Customs Tariff through international postal items!FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 6
  7. 7. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012There is also an opportunity to completely lift the burden of of civil rights and obligations (contract (contracts) on behalf ofthe taxes payment to the country of incorporation. non-residents, maintain (store) stocks of goods belonging to a non-resident , warehouse that supplied the goods on behalf ofThere is no VAT and customs duties on importation of goods non-residents, except for residents with the status of a temporaryby international mail under the conditions: storage warehouse or a customs bonded warehouse) – 14.1.193 • the cost of the goods up to 300 Euro; sub paragraph 14.1 of Article 14 of the Tax Code of Ukraine. • product comes from one sender to one recipient no more than once a day; Fixed place of business solely for the purposes of non-resident • the range and quantity of the goods should not look like a activity of a preparatory or auxiliary character – not represent- «bulk purchases»; ative (paragraph 14.1.193 paragraph 14.1 of Article 14 of the • when goods cost more than 300 euros – 20% VAT and Tax Code of Ukraine. import duty is 10%. In this case, there are more ways of protection. The contrac-Operating without registration in Ukraine entity provides for tual relationship between the company and a non-residentthe formation of the tax credit on export VAT by the export of and the Ukrainian company-contractor (or representative)goods from the country of registration. When using consign- shall be made to perform certain types of work, from thement schemes it is real. content of which is clearly evident that these works are for non-resident subsidiary to the core business of a Russian legalKey terms of customs clearance as follows: entity – trade. • main problem – the rationale that the imported goods are international mail; Opportunities for Russian DS companies to work through the • registration of international mail marked «consignment» is registered legal entity in Ukraine: on the letterhead of the Single Administrative Document • liberalized customs and trade laws between Ukraine and (Cabinet of Ministers Resolution № 450 from 21.05.2012); Russia in connection with the signing of the Treaty «On the • in a single customs declaration form on a single administra- free trade zone» of the year 18.10.2011 (ratified by Ukraine tive document up to 999 products may be declared. and Russia); • introduced duty-free export and import of goods betweenWhen operating without registration in Ukraine there is a risk of states;a legal entity the application of the permanent mission of a for- • zero VAT and no customs duties on the export of goodseign legal entity in Ukraine: a permanent representation – a fixed from the territory of the Russian Federation in relation toplace of business through which all or part of economic activ- goods sent by international mail (paragraph 11 part 1 ofity is non-resident in Ukraine, in particular: a place of manage- Article 131 of the Federal Law of the Russian Federation onment, a branch; office, factory, workshop, and any other place November 27, 2010 N 311-FZ «On Customs Regulation inof extraction of natural resources, warehouse or premises used Russian Federation»);for the delivery of goods. For tax purposes, the term «perma- • ability to minimize income taxes due to costs of advertis-nent establishment» includes residents who have the authority to ing and market research (marketing), as well as pre-sellingact on behalf of non-residents, which gives rise to a non-resident products.MODERN LOGISTICS FOR DISTANCE-SELLINGMARKET IN UKRAINEVasyl Zhuravel, with 45 million people. Especially, recent studies promise theFirst Deputy of General Director market growth of 20-30% per year.JV «ROSAN» In this context, the role of local companies that can help newUkraine is a very promising and interesting market for e-com- partners to be successful in the market of Ukraine. For exam-merce companies. Today we observe a relatively low satura- ple, the joint venture «ROSAN» can offer a ready logistics in-tion of the market of goods offered for sale by postal services. frastructure – both external and internal. The company has suf-The competition remains at a low level compared to the de- ficient resources (transport and human) to serve its customers,veloped markets of Western Europe and the U.S.. And this is and works closely with market players such as Lufthansa anda good starting position to win the trust of buyers in a country Kuehne & Nagel. JV «ROSAN» as a postal operator is actively working with na- tional postal operators of European countries. In particular, we have the existing agreements with the national postal opera- tors in Belarus, Russia, Moldova, Germany. JV «ROSAN» – is the only private postal operator that deliv- ers parcels to Ukraine from the UIS countries. The company also provides postal parcels return, legal return of reclamation goods sent by mail. Existence of its own IT platform makes it easy and fast: • connect to any client server; • provide reliable tracking of items; • simplify the paperwork. At the same time, its own call center ensures effective commu- nication with customers. As individual benefits of working with JV «ROSAN» is the ability to trade without a representative office in Ukraine, without bearing additional costs.FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 7
  8. 8. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012MARKET NEWSCATALOGUE COMPANIES AND ONLINE SHOPSARE POPULAR AMONG UKRAINIANS Kors (America), HAPPYLON (Russia) are being opened. And in 2013 the first stores of large clothing networks such as H&M, C&A, Deichmann, Peek&Cloppenburg and Debenhams are ex- pected to appear. So the competition will only grow that is unlikely to increase retailers› profits. However, the main threat to boutiques is not even a mass opening of competing outlets. Not wanting to feed the sell- ers and buy models of an economy class for the price of de- sign ones, more and more Ukrainians with the average and high level of income are looking for alternative ways to dress up. Catalogue selling companies (Otto, Bon Prix, and etc.) say that their sales rose by at least 15% in the last year. And this happened due to comparatively lower prices: the difference in comparison with store-bought counterparts can exceed 30%. Even cheaper clothes and shoes actually could be bought at websites of western online shops and catalogues, which have not been officially represented in Ukraine yet. The best selec- tion of shoes and bags is considered in American 6pm, clothes – English George, Italian Matalan, Lasenza, and etc. At theOver the first half of this year a record high amount of cloth- peak of seasonal sales collections are sold at bargain prices –ing and footwear was imported into Ukraine – for nearly $ from $ 3-10 per unit.700 million. But retailers have low chances to sell these goods:store traffic decreases as well as citizens’ desire to overpay Until recently, Ukrainians were restrained by troubles with plac-for second-rate collections. Meanwhile, selling by catalogue ing order: it was necessary to open a special foreign currencycompanies, online boutiques and improvised shopping clubs payment card, to be registered in the database, etc. But todaywhich allow to dress edgy without spending a fortune increase the Internet is replete with declarations of middlemen who areturnovers. ready for a small fee (5-7% of the purchase price) to take over these troubles. Many fashionistas unite in a sort of buying clubsDespite obviously not shopping moods of citizens, Ukrainian and buy large quantities of goods, which helps them save onmarket attracts more and more networks. This year in Ukraine shipping. The number of Internet sites selling stock clothingthe first brand-name stores of such clothing, footwear and of world famous brands has also increased over the past year.accessories TMs as s.Oliver (Germany), Furla (Italy), WeekendMax Mara, Marina Rinaldi (Italy), LC Waikiki (Turkey), Michael BASED ON DEPO.UA REPORTNEW PLAYERS TURNED UP IN THE FIRSTHALF-YEAR IN FASHION-RETAIL SEGMENTOF UKRAINEIn the segment of fashion-retail major operators were mostrapidly developing represented by brands of international net-works (Inditex Group and LPP SA Group), and Russian («Sports-master», «TsentrObuv») and national networks (MTI, ARGO),the press service of the of CBRE informed, says Building.ua.In addition, I half-year of 2012 was marked by the Ukrainianmarket of new brands in the segment of luxury goods such asPrada and Valentino. The first stores of average price segmentwere opened: such as Italian apparel brand OVS, PortugueseW52 Jeans, as well as Russian footwear network operators Kariand department store lady & gentlemen CITY, and Polish shoeretailer Wojas.At the same time, some operators, particularly the world-fa-mous network of fast-food Subway, Burger King, a network ofnatural cosmetics L›Oreal Body Shop, etc., have not reachedthe market in Kiev. First of all, this is due to the complexity forpotential franchisees to meet the exacting requirements of the financial resources of potential local partners.parent company by the number of stores opened each yeardue to lack of quality retail space, and in addition, the limited SOURCE: BUILDING.UAFRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 8
  9. 9. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012UKRAINIAN MARKET IS INTERESTINGFOR ONLINE RETAILER LAMODAUkraine appeared on the list of the countries where Lamodaintends to develop. This was enabled due to one of the big-gest deals on the Russian e-commerce market. JP Morgan in-vestment division has invested in the development of onlineretailer Lamoda from $ 55 million to $ 80 million, becoming theowner of a minority stake on the company.JP Morgan Asset Management, the investment division of JPMorgan Chase & Co, has taken part in the next round of fund-ing online retailer Lamoda, working in Russia and Kazakhstan.The parties refused to disclose the amount of the transaction.According to a source familiar with the negotiations, it couldbe in the range of $ 40 million to $ 80 million. As it is stated bythe co-founder of Lamoda, Nils Tonzen, the total transactionamount «exceeds the investment into similar projects in ourindustry».Attracted investment Lamoda will let to increase the range,add to the portfolio of new products, brands and categories,as well as to expand its presence in other emerging marketsbesides Russia – in Kazakhstan, Ukraine, Azerbaijan and Bela-rus, said Nils Tonzen.Since launching Lamoda (December 2010) such venture capi-tal market participants as AB Kinnevik, Holtzbrinck Ventures,Tengelmann Group have already invested to the project, re-calls Mr. Tonzen.Lamoda project was launched by the German startup incuba-tor Rocket Internet (among startups receiving its support areZalando, eDarling, Groupon (formerly CityDeal), TopTarif, Pay-leven). Lamoda sells clothing, shoes, accessories, householdproducts, cosmetics and perfumes, offering products of 700international brands. Its range is about 500 thousand itemsof clothing, shoes and accessories. Financial results have notbeen disclosed. SOURSE: KOMMERSANT.RURESEARCH: UKRAINIANS ARE INCREASINGLYWILLING TO BUY FOOD ONLINEIn the new study of Nielsen Company is stated that over the addition, 61% of global respondents use the Internet to searchlast two years number of consumers willing to buy food and for information when buying food / non-food items.drinks online increased by 44%. Nielsen global study on the Internet impact on purchasing of food / non-food items showed that growing interest in buying goods via electronic devices is marked in such product categories as: cosmetics and skin care (+3% to 25% compared with 2010), software (+18% to 29%), tickets to entertainment events (+10% to 30%), computer hardware / game consoles (+6% to 25%), video / music – CD, VCD, DVD (+5% to 23%), car / motorcycle and accessories (+4% to 11%) and, finally, clothing / accessories / shoes / jewelry (+1% to 37%). One in five (20%) of respondents is planning to buy an e-book or to purchase online subscription. Trends in Russian and Ukrainian consumers’ behavior are very similar to global ones. Thus, Russians prefer to buy via elec- tronic devices tickets to entertainment events (35%), consum- er products (34%), computer hardware / game consoles (34%) and clothing / accessories / shoes / jewelry (33%). First among Ukrainian consumers preferences are home appliances (49%), then come clothing / accessories / shoes / jewelry (39%) as wellA quarter of global respondents (25%) is going to buy food as mobile phones and accessories (36%).and drinks via electronic devices with Internet access (com-puter, mobile phone, tablet, etc.) in the next 3-6 months. In BASED ON KORRESPONDENT.NET REPORTFRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 9
  10. 10. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012FOREIGN RETAILERS INTEREST IN THE UKRAINIANMARKET IS EXPECTED TO INCREASEIN THE NEAR FUTUREAnd the market will have something to offer, as the number ofquality retail space required for international operators com-ing out, is growing rapidly, not only in Kyiv, but also in theregions of the country.Also, according to E.Loktionovoy, Director of UTG, foreignoperators prefer to work with only those brokers who have agood portfolio of completed projects and has the experienceto bring new players into the Ukrainian market.Head of Strategic Consulting Company UTG Victor Oborskyjnoted that the real estate market in Kiev in the near future willsignificantly increase proposal by entering new areas.The second half of 2012 in Kiev announced the opening ofseven shopping centers with a total leasable area of about 223thousand square meters, which will increase the total marketsupply by 28% to 1026 sq. At 2013 m from nine declared forthe opening of shopping centers only six total area of 292.8thousand square meters will most likely to open.According to V.Oborskyj, the unprecedented new competi-tive and successful supply in the coming years will be the ob-jects corresponding to a number of marketing, architecturaland commercial aspects: location, size commercial facility,professional concept, positioning, modern architecture, setdemanded by the target audience of commercial operators, the votes scored Caves area. Shevchenko and Goloseevskiy –competent management. scored 10%. Podolsky, Obolon and Svyatoshinsky – 9%. Dnipro district got 6% of the votes of site visitors and SolomenskyAt the same time, in a poll on the topic: «The most promising – 4%. In the vote on the «most promising area of Kiev for thearea of Kiev for the construction of shopping mall», conduct- construction of shopping mall» participated 220 people.ed by the portal Building.ua, 15% of visitors have called Desn-yanskiy and Darnitskiy areas as the most promising. 14% of BASED ON RETAILSTUDIO.ORG REPORTLEGISLATION NEWSCUSTOMS CODE STIMULATED ALMOST2000 COMPANIES TO DO BUSINESS From June 1 – the date of entry into force of the Customs Code, customs asked 1,700 new businesses in order to allow the accreditation of foreign economic activity. UNN this to the press service of the State Customs Service. During the same period 1.8 million customs declarations were issued. In addition, the new Code fully resolved the issue of determining the customs value. This is evidenced by the fact that in June, 85% of the goods were issued at the price indicated by the importer. In July and August 2012, the figure is about 90%. The new Customs Code the customs clearance of one import- export operations reduced from 24 hours to 4 hours. But now the time for customs clearance single import transaction is only 1 hour and 25 minutes, and export – up to 43 minutes. SOURCE: UNN.COM.UAFRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 10
  11. 11. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012ONLINE STORES OF UKRAINE WILL BE CLOSERTO THE INTERNATIONAL STANDARDSOF CUSTOMER SERVICEState Tax Service plans to force all online retailers to introducecash registers, and couriers are obliged to issue the clientchecks. That is how tax personnel want to increase the taxliability of shops to those selling legal products.Vendors have already said that after such innovations no cheapgoods will be seen on the web any longer. The owner of theonline store Bohdan Slatin said the courier service a few storesat a time, so they will have to carry a large amount of cashregisters.If you add to the cost price of the goods themselves to cashregisters, product automatically increases of 10-15%. In SOTsay, that ten items› cost is only a couple of cents.Price certified in Ukraine portable cash registers range from1500 to 3 000 UAH. According to the director of the compa-ny-manufacturer «Excella» Vladimir Krasnov, the demand forcheaper models is bigger. They are often bought for the Park-ing lots and by owners of small shops. The tax office said thatnot everyone will have to purchase them: small entrepreneurswill not. On the other hand, online shopping can turn into siteswith prices for reference only.As tax claim: for the first offense owner paid UAH, for the sec-ond – the full cost of the goods. And every additional penaltywill be 5 times more expensive than goods. «In order to notraise the price too much as the competition at the market ofonline stores is extremely high, the traders will have to partiallyreduce their profitability. «The prices are expected to rise, butnot for 20 or 16 % for all goods – for some it may be only 10-12%», – said the economic expert Andrew Novak. SOURCE: BIZ.LIGA.NETA NATIONAL SYSTEM OF CYBER SECURITYIS TO BE CREATED IN UKRAINE One of the steps in the development of the information society in Ukraine should be a nationwide system of cyber security. Such an amendment, among others, is offered by National Communications Committee to the law on the ba- sic principles of the information society in Ukraine for 2007- 2015. Such changes, according to the Commission, are necessary because rapidly developing internet services, broadband, mobile phones in Ukraine and the legislation is lagging be- hind this growth. Among other amendments proposed, for example, to develop a system for evaluating the develop- ment of the information society in Ukraine and establish the Presidential National Council for Development of the Infor- mation Society. Recalling that early in February some govern- ment websites in Ukraine were attacked by unknown and remained offline, , for example, site of the President, Ministry of Interior, the NBU. These attacks were linked to the closure of file hosting EX.UA. SOURCE: AIN.UAFRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 11
  12. 12. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST November 2012 INTERNET NEWS ON AVERAGE UKRAINIANS SPEND ONLINE ABOUT 27 HOURS PER MONTH In the first half of 2012 Ukrainian Internet users spend online on average about 27 hours per month. This is three times higher than in 2008 (8 hours per month). This information is presented in the study of Mail.ru Group (data by TNS). At the same time Ukrainians spend around 12 hours per month (on average) for printed media, about 22 hours for radio, and in recent years these figures are falling down. As before most of the time Ukrainians spend watching television (about 71 hours per month). SOURCE AIN.UA UKRAINE IS 9 TH IN EUROPE IN TERMS OF INTERNET AUDIENCE VOLUME According to information of consulting company «GRT & C» Ukraine is the ninth in Europe in terms of the Internet audience volume with 15.5 million of Internet users at the beginning of the year. Meanwhile due to online audience correlation to the total population Ukraine has worse position and the figure corre- sponds to 33% (for comparison, in Russia it is 44%). As of early 2012 there were approximately 2.2 billion of Inter- net users and 500 million of them lived in Europe. It is foreseen that within a few years Internet audience will grow to half of the whole world’s population (over 3.5 billion). Let’s recall that according to TNS company research Ukrain- ians spend on average 27 hours per month online. Compared to 2008 (8 hours per month), time spent by citizens of Ukraine in the Internet more than tripled. SOURCE: FINANCE.UA If you want to decline or recommend digest Hot Line +380 (44) 495 7885CONTACT to your colleagues, please feel free to contact us by US distance_selling_in_UA@uadm.com.ua © UDMA, 2012 Follow us on Twitter: @DistanceSell_ua Follow us on Facebook: DistanceSellingInUA FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 12

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