Ukrainian e-commerce presentation, ukrainian online market entry

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  • E-COMMERCE in Ukraine 2016U k r a i n i a n o n l i n e m a r k e t e n t r y

    Prepared by Jan Rika

    HTTP://MEESTGROUP.

  • E-commerce Volume in Ukraine

    1

    2

    3

    4

    5

    300 mln USD

    80 mln USD

    19 bn UAH

    2014 2015 2016 (forecast) 2017 (forecast)

    25 bn UAH33,7 bn UAH

    44 bn UAH

    50 mln USD

    49,5 mln USD

    36,75 mln USD

    27,75 mln USD

    Clothes, shoes, accessories

    Household goods

    Electronics, household appliances

    Sporting goods

    Health& beauty products

    The best selling product categories The biggest e-commerce market players, volume (2014):

    Total volume in retail 2014

    903,5 bn UAH

    2,1 %Market share of e-commerce in total retail

    (expected growth in 2016 up to 3.2%)

    (According to prom.ua)

    HT TP : / / COMFY.UA

    HT TP : / /WWW.MOB I L LUCK .COM .UA

    HT TP : / /WWW.FOXTROT.COM .UA

    HT TPS : / / F.UA

    HT TP : / /ALLO.UA

    HT TP : / / ROZE TKA .COM .UA

  • The penetration of Internet in Ukraine

    22,8 mlnRegular

    internet users(March 2016)

    42,7 mln

    3,7 EUR

    Population of Ukraine:

    is the monthly cost of high speed internet connection with unlimited data streaming

    (March 2016)

    100.000+

    96%

    62%

    63%

    85%

    The biggest number of Internet users is concentrated in cities

    Internet is used by

    of population has an access to the Internet (the growth of 4% in last six months)

    of population has an access to the Internet at home

    More than

    Over 98% accessibility of high speedInternet in cities

    of Ukraine is covered by 3G service

    of population in age of 16-24

  • Demographics of Ukrainian consumers

    Gender: Income

    Women

    Percentage of women, who do their shopping via mobile devices

    This data might be misleading as many Ukrainians reluctantly speak on their incomes

    No income

    up to 700 UAH

    Higher (University)

    Primary

    700 - 1500 UAH

    1501 - 3000 UAH3001 - 4500 UAH

    4501 - 5500 UAH

    5501 - 6500 UAH

    6501 - 8000 UAH

    8001 - 10 000 UAH

    10 000 UAH and more

    Refused to answer

    Man47,6%

    61,8%

    52,4%

    18-24

    16,4%

    25-34

    51,5%

    Age

    35-44

    17%

    45-54

    8,2%

    55+

    6,9%

    12%

    5%

    17%

    21%11%

    4%

    42%

    Education

    6%Higher without getting degree

    43%Secondary

    9%

    3%2%2%3%

    19%

  • Main Ukrainian players of e-commerce market (Internet stores without cross-border only)

    Marketplaces

    Electronics, household appliances

    Clothes, fashion

    www.evo.company(Prom.ua, Goodini.ua,Bigl.ua, Crasta.ua)

    www.modnakasta.ua

    www.rozetka.ua

    Perfumes / beauty products www.makeup.com.ua Baby/child goods

    www.pampik.com www.kidstaff.com.ua

    www.ihrashky.uawww.garnamama.com

    www.parfums.ua

    www.yves-rocher.ua

    www.mobilluck.uawww.foxtrot.uawww.fotos.uawww.allo.ua

    www.lamoda.ua

    www.fame.ua

    www.privatmarket.ua (project of PrivatBank)

    69 000>

    The total amount of online shops in

    Ukraine:

  • Cross-border players in Ukrainian e-commerce(Online stores that offer payment on delivery and customer support)

    Clothes, fashionwww.lamoda.uawww.bonprix.uawww.next.uawww.stylepit.uawww.astratex.uawww.answear.uawww.leboutique.comwww.astratex.ua

    Perfumes and beauty products

    www.parfumeria.ua

    Electronics

    www.eurobuy.uawww.rozetka.ua (only some of their products are available

    Cross-border e-commerce has a great potential, in spite of weak Ukrainian currency the amount of purchases has been growing. Big Ukrainian online shops start to implement cross-border trade within the expansion of assortment.

  • Payment methods in Ukrainian e-commerce

    80-96%

    share of C.O.D. (cash on delivery)

    4%

    10%

    share of payments by card

    average

    up toshare of clothes,

    health& beauty products

    In the same time significant cash inflow comes due to psychological factor: from the exchange of physical goods for cash.

    Percentage of card payments in cross-border increases, if payment in UAH is available through payment bank interfaces, which are trusted (PrivatBank)

    According to statistics the share of card payments is small, considering the fact that relatively few Ukrainian online stores offer online payment so far.

    The example of online shop with 100% card payment: e-shop www.next.ua offers payment by card only and amount of their orders exceeds 1000 per day. This is based on the fact that e-shop does not implement returns in Ukraine, so therefore customers can only return Next goods by sending them back to the United Kingdom at their own expenses. The advantage of Next is fast delivery service (4 days) and frequent promotion campaign that offer free delivery.

    In case of frequent sales (for example, www.aukro.ua or www.olx.ua) prepayment on the contrary prevails. It is interesting that credibility to prepayment among people is higher than credibility to e-shops. Traditionally confidence to the foreign online shops is higher than to local.

    WWW.NEXT.UA

  • Price comparison websites

    32%

    20%15%

    4,5%

    7,5%

    5,5%2%

    1,5%3,5%

    4,5%

    www.hotline.ua

    www.price.uawww.market.yandex.ua

    www.nadavi.ua

    www.m.ua

    www.ek.ua

    www.hotprice.ua

    www.sravni.uawww.ava.ua

    www.technoportal.ua

    PPrice.ua offers a clear analysis of your competitors prices.

    Hotline.ua and Price.ua offers opportunity to publish customer reviews. The reviews are especially important for hotline.ua

    The price per click depends on the product category and varies from 0.9 up 10UAH. It is usually determined by the auction, which allows you to see the highest price from the competitor and you can set the higher price per click. Promotional positions operate on the top. There is no need to transmit information about the purchases.

    The fee for services of price comparison websites can be done by bankcard from abroad, sometimes you need to have a contract with the Ukrainian legal entity.

    Price comparison can also be found at market places

    HT TPS : / / PR I VATMARKE T.UAHT TP : / / PROM .UA

  • Social networks in UkraineNowadays the most active social network in Ukraine is www.vk.com, which has been losing its leading position to Facebook since 2015. This social network is mostly used by young people (up to age of 24) and it's used mostly for an entertainment. However, it has been losing its dominance due to political situation.

    Facebook is the most popular among office based professionals.

    active users (at least one post per month)

    The number of Facebook users in UkraineThe number of Facebook users increased by 1.2 million in 2015, which were lost to Vkontacte.5 050 000

    5,7 mln active users (at least one post per month)1,2 mln

    Women Man41,7%58,3%

    Women Men41,7%58,3% 18-24

    years oldup to 18years old

    26,5 %38,7 %

    29,5 %

    4,9 %

    25-34years old

    34-44years old

    18-24years old

    18years old

    0,1 %9,5 %

    41 %30,1 %

    25-34years old

    34-44years old

    Facebook is better for advertising campaigns.

    YouTube, advertising videos, which are popular among users, reach a high conversion. Big online shops start to develop their own YouTube channel actively, particularly with video review of products. Rozetka has the most successful channel over 750 000 buyers. There are more than 130 million views.

    Age groups of users:

    Age groups of users:

    HT TPS : / /WWW.FACEBOOK .COM HT TPS : / / VK . COM

  • Features of Ukrainian consumer

    59%

    15%

    26%

    of customers expect the order confirmation by the phone

    of customers would like tto get he order confirmation by phone however they do not consider it to be a necessity

    of customers do not require the order confirmation by phone at all

    The order confirmation by phone:

    Ukrainian consumer expects the order confirmation. Once the order is successfully placed and processed, the customer expects the phone call by operator of online shop to get the confirmation of received order. This tendency begins to decrease and confirmation by SMS increases its popularity (Cost of 1 SMS 0.27 UAH). The order confirmation by email is not effective and it increases the number of undelivered orders. All big online shops sent confirmation SMS after receiving the order and also once the order was dispatched together with tracking number.

    of consumers compare the prices on price comparisons websites and the price of product is one of the main factors of decision making process.

    of consumers search for other customers feedback. Mostly they search directly on price comparison websites or on special pages (for example www.otzyvua.net or www.irecommend.ru). Feedback by other customers displayed on website of online shop has significant impact on decision making (the favourite service of www.safeonlinereputation.ru)

    Ukrainian consumer tends to be loyal. If your client was satisfied with shopping experience, you get the high probability that he will not be looking for another e-shop for the next order. Quality of customer service has significant role. Online shop Rozetka is a good example, which doesnt belong to the cheapest retail platforms; however their customer can access wide range of detailed products descriptions, online tutorials and other customers feedback. The price is not the main fac