INTERVIEW: Russia’s Eldorado to focus on online sales, reduces shopping area

Interview with Eldorado’s Vice President for Operational Business Support, Service and Marketing Sonya Dolezhelova

MOSCOW, Jan 9 (PRIME) -- One of Russia’s leading electronics retailers, Eldorado, plans to focus on online sales and is already reducing its shopping space, Sonya Dolezhelova, vice president for operational business support, service and marketing, told PRIME in an interview Thursday.

“We are not planning to open new ‘stone age’ stores. It’s not that we are rejecting this strategy altogether, we consider each proposal in detail,” she said.

“We think that sales in traditional stores will stagnate. Researches show that the market will expand thanks to the internet.”

Dolezhelova said that Eldorado believed that the online segment will expand 26% in 2014. The share of online sales at Eldorado is now 10.6% on average but it is growing every day.

“We forecast the company’s 2013 revenue growth with shrinking shopping area. It is now too early to mention the figures but I can already assume that the revenue growth will lag behind the 2012 growth rates only slightly, the shopping area will be cut,” Dolezhelova said.

The revenue of traditional stores is stagnating partially due to macroeconomic reasons, but also due to a spike in online purchases, she said.

“We are now focusing on the development of internet hypermarkets,” Dolezhelova said.

“This is a fusion between the traditional and online stores. The goods are not shown in the shop window but there is a large warehouse. The client can order a product via a terminal and he or she may order delivery home or take a product straightaway.”

The company will launch 15 stores of this kind in January–July 2014, she said.

“I am frequently told that Eldorado is just a showroom for other online retailers. I will tell you one thing: I am not against this but we will do our best to make these clients order in our online store,” Dolezhelova said.

According to Dolezhelova, online prices went up 35% in 2013, while prices in offline stores will soon begin to decrease because of a falling demand.

Eldorado’s focus on online sales prevented it from merging with its core rival M. Video in August, which caused disagreement during the merger negotiations.

According to Dolezhelova, Eldorado will not change its investment structure in 2014.

“This means that 2013-2014 are the years of development for us. Eldorado invests a lot in technologies because speed is essential for the internet … We want to be number one on our market.”

End