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billion rubles (an increase of almost three times). And this despite the fact that Wildberries’ turnover in 2023 amounted to 2.5 trillion rubles, and Ozon’s turnover amounted to 1.75 trillion rubles.
However, one cannot count on the fact that the Russ group will be able to help the marketplace catch up with its competitors, according to analysts with whom The Bell spoke. Firstly, Russ has enough of its own problems: advertising on billboards is a catastrophically ineffective business, says Ivan Fedyakov, co-founder of Infoline-Analytics. Unlike online advertising, where the effectiveness can be calculated, outdoor advertising serves more of an image function. Secondly, the problem with Wildberries is that the marketplace website is not ready to advertise products that are not presented on it (click out advertising), and this is where Wildberries lags far behind Ozon. But how the Russ group can help solve this problem is a big question. “It’s difficult to understand what kind of synergy there could be here. Previously, an advertiser could buy advertising both here and there. The fact that now it will be in one bottle does not mean at all that it will become more profitable. But rather the opposite,” says the analyst.
“Wildberries is going through a difficult period in general: a large warehouse burned down, the user base is already large and will not grow at the same rate as before, and competitors are eating up market share,” Fedyakov lists. In 2023, Wildberries for the first time lost to Ozon in terms of market share growth, adds Cross Insights partner Boris Ovchinnikov. And there are other competitors: for example, MegaMarket, which is gaining market share at the cost of burning billions of “Thank you” bonuses, the analyst recalls. Plus, Wildberries, compared to competitors, does not have a very good reputation among sellers.
However, it is unlikely that the Russ group can solve the problems with the business of the largest marketplace, experts conclude. But this strange deal could be useful, for example, in protecting against some regulation unfavorable to the marketplace, Ovchinnikov suggests. In the end, the Russ group is associated with the emergence of several bills in its own interests (for example, the scandalous bill on a single operator of digital outdoor advertising, thanks to which Avito’s business could have suffered, or a much less noticeable, but significant for the market (and beneficial to Russ) law on preferential extension of contracts for outdoor advertising). And this influence is also disproportionate to the scale of the group’s business.
Wildberries is one of the largest, if not the largest, private company in Russia, which, as far as is known, is not associated with any of the key influence groups, Ovchinnikov recalls. However, why she had to protect herself from this risk in such a strange way, or why exactly Russ’s offer became the one that WIldberries could not refuse, remains a mystery.
Via The Bell
24 RUSSIA Country Report July 2024 www.intellinews.com