Page 12 - RusRPTMar19

on its face.
Launched in December to much fanfare, the Yandex.Phone sold less than 500 units as of January 20, according to the GfK market research company, Vedomosti reported on January 31.
The biggest player in Russia’s online ecosystem
and the most valuable Internet company in
Europe, Yandex was hoping to support its core
business by selling smartphones that came with
a package of Yandex services and aps pre-
installed, including “Alice,” the listening smart assistance and Russia’s answer to “Alexa.”
Real incomes in Russia have been shrinking but the process of people upgrading to better smartphones continues where sales of handsets remain strong.
After investing millions into developing the phone the company reported that it had sold only 450 units through retail chains as of January 20, according to GfK.
The company started offering the phone in its own online stores on December 6 last year and launched it in the major consumer electronic stores the next day at the start of Russia’s busiest shopping month.
The cost of a phone was set at a competitive RUB17,990 ($275).
Yandex also offered other perks such a six-month subscription to its premium services online, discounts on its taxi hailing service Yandex.Taxi, a subscription to its streaming offering Yandex.Music and films in Kinopoisk, free food delivery, and a 10% cashback on purchases paid via Yandex.Money.
Consumers were not impressed. However, sales may have been a bit higher as the GfK statistics does not take into account the main sales channel, which is Yandex’s newly launched Beru.ru that is the first online shop to be launched on Yandex.Checkout, a retail platform the company is developing with Sberbank and will be ramped up this year. Yandex.Checkout is intended to be a Russian amazon.com.
Yandex itself did not comment on the actual number of sales, and the leading consumer electronics stores that carry the phone wouldn't comment either.
Research by Mobile Research Group estimates that some 400 units were sold through Beru.ru and another 1000 units have been sold via the retail outlets by the middle of January, reports Vedomosti.
Experts believe that launching in December was a mistake as other producers typically drop prices at this time of year to catch the New Years shopping rush, whereas Yandex offered its phone at full price. (Orthodox Russia doesn't really celebrate Christmas and New Years Eve is the big winter holiday that includes gift giving.) At the same time the advertising campaign to support the phone ended in January when typically there is a post-holidays wave of smartphone purchases in the annual sales period.
February and March will also be tough months as Chinese manufacturers are due to present their new product lines on the Russian market. To be successful the Yandex phone needed to eithr compete on price or to offer a unique service or feature and the phone does neither.
This was not the first attempt by a Russian firm to break into the
12 RUSSIA Country Report March 2019 www.intellinews.com