Ozon.ru hopes regional expansion to help boost 2017 sales by 25%

MOSCOW, Mar 28 (PRIME) -- Russian online retailer Ozon.ru hopes to boost its 2017 sales by at least a quarter as the company expands into provinces, CEO Danny Perekalsky said on Tuesday at a news conference.

“The business is healthy and will improve further. We’ll keep being strongly focused on the customer. There is a crazy potential to go faster,” Perekalsky said.

Ozon.ru will open a 4,000 square meter warehouse in the southern city of Krasnodar in June and expand it with an extra 1,300 square meters in 2018, he said.

Ozon.ru opened a 6,800 square meter warehouse in the Urals city of Yekaterinburg in April 2016 and a 3,500 square meter warehouse in the city of Kazan, on the Volga River, in May 2016. Sales in Yekaterinburg soared 27% in April–December 2016 and 60% in Kazan in May–December 2016.

The company also expanded the capacity of its warehouse in Tver, in central Russia, which now occupies 14,000 square meters.

“The increase in the geographical coverage allowed us to ensure delivery on the day of order or the following day. We expect sales in Yekaterinburg and Kazan to grow 100% in 2017,” Perekalsky said.

Books, the initial category of Ozon.ru, accounted for 25% of the business as of the end of 2016. Electronics accounted for 24% and household goods for 15%. The share of food amounted for 4% of total sales, more than tripling in 2016, and is one of the most promising items, as Perekalsky said.

In 2016, the gross merchandise volume increased 20% to 18 billion rubles, while net sales also rose 20% to 14.2 billion rubles.

“We focus on five things: a wide choice of goods, profitability, convenience, individual approach to the customer and confidence,” Perekalsky said.

The number of orders placed with Ozon.ru jumped 24% in 2016 to 5.8 million.

Ozon.ru’s assortment reached 4.3 million as of the end of 2016 as compared to 3.6 million a year earlier. “Our shelves have no limits…We’ll add everything our customers need,” the company’s head said.

Larisa Lavrova, head for marketing communications at Ozon.ru, said the company is promoting a message of offering lots of goods. “It’s our key challenge to create the perception of Ozon.ru in the mind of the consumer as a competent seller offering goods galore,” she said.

The conversion rate reached 3.3% in December 2016 as compared to 1.3% in January 2014.

(57.0233 rubles – U.S. $1)

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