Selling clothes online in Russia Fabric of society

ONLINE as well as offline, imitation is the sincerest form of flattery. Vente-Privée, a firm founded on the strange notion that French women might like fashionable clothes at deep discounts, has been paid this compliment more than most. Companies cut from similar cloth have appeared in one country after another. In 2008 two German men, Damian Doberstein and Oskar Hartmann, spotted that Russian women were missing out. “No one was telling Russian women, ‘You could look good for 70% less',” Mr Hartmann says.

They expect that their company, KupiVIP, will have sales of around $200m this year. Mr Hartmann says it breaks even. Given the fast growth of Russia's internet population and of a middle class eager for nice clothes but mostly a long way from nice shops, the two men think they could turn over $1 billion within five years.

The pair want to fill more than just the smarter end of the female wardrobe. Besides their original business, which is still the biggest part of the group, they have an online full-price shop, ShopTime, aimed at both sexes and all shapes and sizes. They also run online shops on behalf of well-known brands, of which they expect to be servicing 23 by the end of the year.

When he was in an e-commerce business in Germany, Mr Hartmann says, he outsourced “everything”. In Russia, “we have to do everything ourselves”, from the call centre to the photographing of models. To make sure that fashion-conscious Russians get the clothes they ordered, KupiVIP owns a fleet of 100 vans and leases a lot of others. It uses the post office to send clothes by air to the farthest-flung corners of the vast, icy, sparsely populated country.

Online retailers in Russia have to put up with other local traits. Most customers prefer to pay in cash on delivery, and about a quarter of goods are rejected at the door. That, says Mr Hartmann, who is as talkative as Mr Doberstein is taciturn, is just something companies have to deal with. “Never complain about the customer,” says Mr Hartmann. Once a quarter, he makes sure he meets some of them, by making deliveries himself.

http://www.economist.com/node/21555563

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