Wildberries, the Russian e-commerce giant looking to compete with Amazon in Europe

Thanks to an original business model, Wildberries has established itself as an e-commerce juggernaut in Russia… and Europe is in its sights. Kristina shows a code on her phone, disappears behind purple curtains, before coming out in a little black dress which she looks closely at in the mirror. This 42-year-old stay-at-home mom isn’t in a clothing store, but in a take-out point with fitting rooms, an idea that has made the success of Russian e-commerce giant Wildberries, which lands in Europe.

“I haven’t decided yet what I’m going to keep,” said the dark-haired young woman, “I’m ordering here not only for myself, but also for my husband and my kids, we come to try the business all together”. On this site of the Taganka district of Moscow, Wildberries’ customers – but especially customers – try or examine their online purchases, leaving behind what does not suit them without explanation, a system that has contributed to the staggering success of the company creation since its inception in 2004. Another innovative idea to overcome the mistrust of Russians who are used to all kinds of scams: you pay at the reception. However, a practice that was suspended in 2020 to reduce physical contact in times of pandemic and replace it with online payment.

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Today the group is the first in Russia in terms of total sales. In 2020, they grew 74% year-over-year to $6 billion, boosted by the pandemic, or about 1.6 million products per day. In an otherwise slow economy, the growth of e-commerce is an exception. The market is still fragmented, with many players and low population penetration, suggesting that there will be another boom in this huge country with many isolated areas and no commercial supply. In 2020, Wildberries’ competitor Ozon also made a stunning IPO on Wall Street, raising more than $1 billion.

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Rarely has Wildberries’ success in the countries of the former USSR led it to Western Europe (Germany, Poland, Italy, France, Spain…). “The customer gets a quality product at an affordable price and fairly quickly. We are now in 13 countries and plan to continue,” Vyacheslav Ivashtchenko, director of development, told AFP at its premises. In Moscow, delivery takes place in 1 or 2 days thanks to a dense network of warehouses. In Europe it takes another week and is done at pick-up points or at home, the cabins are currently only available in the post-Soviet space. But the products are the same: Specializing in mid-range clothing, the site’s range also includes cosmetics and home appliances, including sex toys. “We offer both major international brands and Russian brands. Such as homemade mittens, felt boots… It will be of interest to Europeans as well as emigrants from Russia,” said Mr. Ivachchenko.

In the Russian e-commerce landscape, Wildberries stands out with its purple logo, its 70% female clientele and its boss, founder Tatiana Bakaltchouk. Russia’s richest woman according to Forbes, with $12.6 billion, began ordering products from the “3 Suisses” and Otto catalogs to resell in Russia. Today it has 40,000 employees. This self-made mother of four, once an English teacher, launched the group while on maternity leave, frustrated by the difficulty of combining her ambitions with the logistics of running a home. “We had a one month old baby, I wanted to go back to work, not just feel like a mother,” said this very discreet businesswoman in an interview in 2018.

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Lioudmila, a 36-year-old customer, seems to be on the same page and emerges from a pick-up point near her work, her arms full of cleaning supplies and toys. “What’s very practical is that you can order everything in the same place. You can even buy coffee!” she exclaims, claiming to shop this way up to twice a week to escape the wasted time shopping.

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