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 Růžička
HTTP://MEEST˜GROUP.
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 UAH
33,7 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
в 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%
18-24years old
up to 18years old
26,5 %
38,7 %29,5 %
4,9 %
25-34years old
34-44years old
18-24years old
до 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 doesn’t 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 factor determining the decision by customer to proceed.
Ukrainian consumer is significantly influenced by recommendations by his friends.
E-mail is the best form of communication between the customer andonline shop. Ukrainian customer doesn't mind high frequency of emailsfrom e shops as long as newsletters contain information beneficial to him(such as special offers or discount promotions). Ukrainian consumer maydecide to purchase thanks to small, but interesting gift for his shopping.
Free delivery is the most successful and motivational promotion.
65 %
75 %
61,8 % 38,2 %
00:0023:0022:0021:0020:0019:0018:0017:0016:0015:0014:0013:0012:0011:0010:0009:0008:0007:0006:0005:0004:0003:0002:0001:00
Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday
The most popular days and time for shopping
Online shopping during the day
The ratio of consumers based on gender – purchases via PC
Online shopping during the week via mobile/smart devices
Online shopping during the week via PC
The ratio of consumers based on gender –purchases via mobile/smart devices
Women Men
50,3 %49,7 %
HT TPS : / /WAYFORPAY.COM
Search engines in UkraineThe market in Ukraine is divided between two main search engines – Google and Yandex (www.yandex.ua). Currently Google dominates with almost 70% share of total online searches. Except two main search engines some people also use www.meta.ua , www.mail.ru , www.ukr.net , however the share of
those search engines is not significant. Yandex certainly should be considered in promotional planning consideration.
Usually Yandex has significantly higher price per click than Google.
Yandex has its own system for analytics –
www.metrika.yandex.ua
Yandex enables targeting of each advertisement.
Therefore your advertising campaign can
be focused on Kiev oblast’ and specific advert on Kiev only.
Yandex enables to add URL to every
advert.
38,4% 34,5% 32,9% 52,8% 59,7% 65,7%
Share of search engines:
2013 2014 2015 2013 2014 2015
HTTPS://WWW.GOOGLE.COM.UAHTTPS://WWW.YANDEX.UA
Market of online advertising in Ukraine
1,16%
42,3%
31,6%
8,4%
9,7%
Banners
Nonstandard forms of advertising
In-stream video
In-page video
Sponsorship
Online advertising market shares in Ukraine: Banner advertising:
24 %
76 %8%
Standard banners
Rich Media
Average CTR2,97%Average CTR Rich Media
The affiliated networks in Ukraine
There are several affiliated networks in Ukraine, the most popular is www.salesdoubler.ua , which offers the larger number of participants/partners. Several main e-commerce players cooperate with affiliating site Salesdoubler as it offers reliable customer support. Payment is made based on the account at the beginning of next month. The account includes paid orders only (delivered purchases or payment in advance). The percentage of charge varies from 8 to20% of fully processed orders, the part is kept by the network and the rest is paid to partners. The customer has a choice of a wide range of options to attract traffic, can choose those he takes and those he doesn’t. There are mostly emailing, banner advertising, social networks and also popular underclick. Some affiliated networks offer AdWords and YandexDirekt.
There are other affiliated sites except this network, for example: www.sellaction.net , www.primelead.com.ua, www.admitad.com
Partnership sites in Ukraine usually require an agreement with Ukrainian legal entity, payments from abroad are difficult to arrange.
HTTP://WWW.PRIMELEAD.COM.UAHTTPS://SELLACTION.NET
HTTPS://WWW.SALESDOUBLER.COM.UA
HTTPS://WWW.ADMITAD.COM/RU/
Online purchases made by Ukrainians at e-shops based abroad
19,8%
21,9%
28,1%
34,4%once a month
several times a month
quarterly
The age of respondents:
up to
19
5,8%
19-25
37,2%
26-35
30,7%
36-45
17,5%
45+
8,8%
Gender of respondents:ЧThe frequency of online purchases made abroad:
semi-annually
Women Men41,6%58,4%
Online purchases made by Ukrainians in e-shops based abroad
The type of products purchased by Ukrainians in online stores based abroad:
Clothes
Perfumes/beauty products
Food
Electronics
Shoes
Goods for children
Sporting goods
Home textiles
Household goods
Children shoes
Toys
75,7%
37,9%
8,7%
31,1%
41,7%
24,3%
14,6%
10,7%
12,6%
21,4%
15,5%
The popularity of online shopping abroad amongst Ukrainian customers is growing rapidly. Gradually, the necessity of using middleman services is decreasing and consumers are confident enough to make purchase abroad by themselves. The most popular payment method is to pay either by payment/credit card or by PayPal. The most frequent obstacles include: a lack of information about foreign e-shops, the fact that the majority of foreign online stores do not offer delivery of goods directly to Ukraine, some payment gateways are blocked for payments by Ukrainian payment cards. One the most popular methods of shopping from abroad is MyMest (www.mymeest.com) provided by Meest Group. Most often Ukrainians use MyMeest to purchase from Germany, the USA or China. Motivating factor for Ukrainian buyers is the ability to pay in the national currency or, at least, an accurate calculation of the price in the national currency by the online store (different banks, card issuers have different rates, the customer never knows the exact amount that the bank will deduct in UAH).
HT TPS : / /MYMEEST.COM
Online purchases made by Ukrainians in e-shops based abroad
What deters the customer from shopping at online shop based abroad: Payment methods:
Distrust of online payment
Impossibility to pay by card
Lack of information on where to find online shop
It is too long to wait for a delivery
No fears, regular online shopping
Language barrier
Other reasons
Fear that e-shop will not send a product
Inconvenient delivery method
16,1%
11,7%
24,1%
37,2%
10,2%
24,1%
24,6%
5,8%
30,7%
47,4 % Payment by card
24,7 % PayPal
27,4 % C.O.D. (cash on delivery)
20 % Via middleman
5,3 % Through acquaintances who
live abroad
Helpful and tested marketing tools in Ukraine
ВImplementation and automation of customer feedback directly at the online store: www.safeonlinereputation.ru. The module is available in Czech, Russian and Ukrainian. Convenient interface is very easy to use. Practical experience of the implementation of this module increases direct sales. Payments are possible in Czech Republic.
Sending SMS (order confirmation, information on delivery status, promotions): www.turbosms.ua. Service is checked and reliable for sending SMS. Basic charge for 1 SMS within Ukraine is 0.27 UAH (0.01 EUR). It offers a full API. There is an opportunity to pay by credit card from abroad.
Promotional mailings: www.esputnik.com. Competitive charges (for example the database of 50000 contacts, unlimited sending for the price of 3600 UAH per month- approx. 129 EUR ). There is a high percentage of delivery of letters, convenient interface and excellent technical support. Based on own experiences, it is fair to say that it is the best service provider in Ukraine in terms of the delivery of letters.
Analysis of competitors' pricing policies: www.competera.net. There is the best service for the comprehensive monitoring of price policy, promotions and discounts of competing online stores. The tool is used not only in Ukraine but all over the world, for any kind of goods or services.
Chat module for implementing at the online store - www.siteheart.com. It is proved that Ukrainians use the chat as a communication channel with an online store, and the presence of the chat module in the online store increases direct sales. Siteheart chat module is provided by PrivatBank and is completely free, while offering additional features.
HTTPS://WWW.SITEHEART.COM
HTTP://ESPUTNIK.COM
HTTPS://TURBOSMS.UA
HTTP://WWW.SAFEONLINEREPUTATION.RU
HTTP://ESPUTNIK.COM
PrivatBank - the bank for e-commerce
Ukrainian bank Privatbank is the leader in providing the best services for e-commerce. Thanks to its Lithuanian bank subsidiary it offers to foreign online shops an acquiring in UAH.
basic rate for international acquiring
number of branches
number of ATMs and self service payment terminals
Views of payment websites
Transport companies Meest Express and Nova Poshta join postal terminal delivery service
number of postal service terminals
number of issued cards
2,7 %
16 311 000
4164
19 778
>1000
> 450 000 per day
Services for e-commerce:
Payment gateway LiqPay (option to pay by card, through LiqPay account, transfer from internet banking Privat24, invoicing)
Marketplace and price search engine PrivatMarket (www.privatmarket.ua)
Sale of online gift vouchers on website for Internet banking by Privat24
P2P loans for start-ups (https://kub.pb.ua) - Ukrainian Kickstarter.
Magic Checkout – special offers of promotional discounts for clients of Privatbank on the page of online payment confirmation for processed transaction. Wide range of targeting and high conversion ((online shop Next has achieved more than 8000 orders in 14 days of advertising campaign).
HT TPS : / /WWW.L IQPAY.COM
HT TPS : / / PR I VATMARKE T.UA
HT TPS : / / KUB . PB .UA
HT TPS : / /WWW.PR IVAT24 .UA
Solution for acquiring in UAH
The solution suitable for acquiring in UAH is available via Latvian bank Privatbank LV – subsidiary of Ukrainian bank Privatebank.
At the present time it is the ideal solution to eliminate the risk of exchange rate change.
Ukrainian consumer pays for the goods at online shop displayed price in UAH and the retailer receives the payment in EUR as per current
exchange rate.
Very fast payment transfers to the account.
Possibility to update exchanges rates very quickly online with assistance of XML.
The interface allows full or partial refund - the ideal solution of returns for customers.
In the case of delivery of the order to post terminal of PrivatBank, it is possible to transfer payment for goods at terminal to the account in Privatbank LV.
The application is divided in two parts:- Opening an account in EUR in a
Latvian bank PrivatBank LV- Integration of payment gateways in
the online store
HT TPS : / / PR I VATBANK .UA
Sales in Ukraine via Ukrainian marketplace and online stores
Big Ukrainian online stores look for an opportunity to expand the assortment using cross-border drop shipping. For Czech retailers this is the perfect opportunity to begin retail in Ukraine without big investments into the marketing.
Ukrainian online shop integrates your products into their product range and offers them to their customers.
The seller provides Ukrainian online store with photos of goods, description (either seller or Ukrainian e-shop translate descriptions), information on availability of goods in stock and other options (variants, product code, price) with the help of XML file.
Ukrainian online store processes the orders and sends to the seller data on orders (product code, version, quantity, e-mail address of the customer, the customer's mobile phone, delivery address, possible notes). Orders are sent either manually or through the API
Czech seller sends the goods directly to the Ukrainian customers and get from them payment by card or C.O.D. from Ukraine.
Czech seller pays agreed fee to Ukrainian online store at the beginning of next month (usually 8-15 percent of the amount of paid orders).
Online stores that are interested in products from Czech Republic HTTP://EVO.COMPANYHTTPS://F.UAHTTP://ALLO.UAHTTP://ROZETKA.COM.UA
Contacts:
Jan Růžička
Specialist in Ukrainian e-commerce
Meest Group Partner in the Czech Republic and Slovakia
[email protected]+380952830999
Skype: bohemiaconsultwww.bohemiaconsult.comwww.bohemiaconsult.cz
HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14HTTPS://WWW.FACEBOOK.COM/JAN.RUZICKA.14
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