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WORLDWIDE AND RUSSIAN RETAIL MARKETS 2009-2016
MAKING CONCLUSIONS BUILDING PLANS
2
ABOUT CSR ENTER
CENTER OF STRATEGIC RESEARCH OF ENTER (CSR ENTER) has been created in 2011.
One of our ambitious targets is to form trends in the retail industry, mainly market research and analytics. This led to the creation of CSR Enter, the core aim of which is to increase the market transparency.
Public researches can be downloaded for free on www.enter.ru/research
Visit us on Facebook: http://www.facebook.com/research.enter
Center of Strategic Research of Enter (CSR Enter) has been created in 2011. One of our ambitious targets is to form trends in the retail industry, mainly market research and analytics. This led to the creation of CSR Enter, the core aim of which is to increase the market transparency.
ABOUT CSR ENTER
Public researches can be downloaded for free on www.enter.ru/research
2
Market Research by CSR Enter:
Visit us on Facebook: http://www.facebook.com/research.enter
In case of questions & queries, comments and proposals for partnership, e-mail us: [email protected]
«Present Trends in Retail: the New Way of Shopping» 2 April 2012.
«Online Retail Barometer: New Knowledge (2Q 2012)» 27 July 2012
«Business Results of the Retailers for 2011 and 1Q 2012» 3 September 2012
«Present Trends in Online Retail: Facts and Figures» 10 October 2012
«Customer-Centrism: metrics, cases, facts» 28 February 2013
«Business Results of the Retailers for 2011» 8 April 2013
In case of questions & queries, comments and proposals for partnership, e-mail us: [email protected]
3
CONTENTS
WORLDWIDE AND RUSSIAN RETAIL MARKETS USA ...................................................................................................................................................................6
CHINA ................................................................................................................................................................8
RUSSIA .............................................................................................................................................................. 10
SEGMENT ANALYSIS PERFUMES & COSMETICS ................................................................................................................................ 14
JEWELRY & WATCHES .......................................................................................................................................29
FURNITURE .......................................................................................................................................................46
SPECIAL FOCUS: WORLDWIDE BEST-PRACTICES .....................................................................61
4
METHODOLOGY
TERMS AND MEASURES:
CAGR (Compound annual growth rate) — shows average weighted growth rate over several periods.
Offline Retailers – companies which operate only through stationary retail stores.
Online Retailers – companies which operate through their own website, catalogue or (and) call-center.
Multichannel (both online and offline) – companies which operate both though the Internet and other distant channels and through traditional retail outlets.
Mixed Product Range – segment which consists of retailers that are specialized on 2 or more commodity categories.
Weekly Traffic (Unique Weekly Visitors) – average number of weekly unique visitors of an internet retailer’s website. Traffic of retail segments is estimated by top-3 companies in each segment.
WORLDWIDE AND RUSSIAN RETAIL MARKETSSALES VOLUME & GROWTH RATES
EXPANSION OF E-COMMERCE
6
WORLDWIDE MARKETS
RETAIL IN THE US
USA Retail Sales* USD bln
KEY FACTS
During 2012 non-food retail grew up 3 times more than food retail (7.2% vs 2.6%). The total retail market’s CAGR in the USA reached 6.3% in 2009–2012.
* In current prices (including inflation) Sources: US Census, analysis by CSR Enter
Food RetailNon-Food Retail
7
WORLDWIDE MARKETS
E-COMMERCE IN THE US
USAE-commerce Sales USD bln
KEY FACTS
E-commerce market was growing faster than the total retail market in the US during 2009-2012 (with CAGR of 14% vs 6%).
Source: Morgan Stanley analytics
F F F F
8
WORLDWIDE MARKETS
RETAIL IN CHINA
CHINARetail Sales* USD bln
KEY FACTS
In contrast to other developed countries share of food retail in total retail market is still more than share of non-food retail (56.2% vs 43.8% in 2012) but non-food retail is growing much faster than food (28% vs 10%).
* In current prices (including inflation). Exchange rate: 1 RMB = 0,1585 USD
Sources: NBSC, analysis by CSR Enter
Food RetailNon-Food Retail
9
WORLDWIDE MARKETS
E-COMMERCE IN CHINA
CHINAE-commerce Sales USD bln
KEY FACTS
E-commerce market in China is growing rapidly: according to different forecasts the volume of the market is to raise up by 340 bln USD in 2016 and catch up with the US level.
Source: Morgan Stanley analytics
F F F F
10
RETAIL IN RUSSIA
RUSSIARetail Sales* USD bln
KEY FACTS
Non-food retail in Russia is growing faster than food retail: with CAGR of 15% vs 12% in 2009–2012). Share of non-food retail increased from 51.4% in 2009 to 53.5% in 2012.
* In current prices (including inflation). Exchange rate: 1 USD = 31.065 RUR
Sources: Rosstat, analysis by CSR Enter
Food RetailNon-Food Retail
11
E-COMMERCE IN RUSSIA
RUSSIAE-commerce Sales USD bln
KEY FACTS
According to CSR Enter estimation, Russian e-commerce market’s CAGR was approximately 25% in 2009-2012; projected CAGR for the period of 2012-2016 fluctuates from 22% to 35% by different estimations.
* Forecasts made by Fast Lane Ventures and InSales are estimated till 2015.
Sources: analysis by CSR Enter, Morgan Stanley, InSales, Fast Lane Ventures
7 10
13
19
26
36
43
8 11 13
15 19
23 28
2010 2011 2012 2013П 2014П 2015П 2016П
E-COMMERCE IN RUSSIA
* Forecasts made by Fast Lane Ventures and InSales are estimated till 2015.
Morgan Stanley Estimation CSR Enter Estimation
Fast Lane Ventures Estimation InSales Estimation
RUSSIA. E-commerce Sales* USD bln
Sources: analysis by CSR Enter, Morgan Stanley, InSales, Fast Lane Ventures
KEY FACTS
q According to CSR Enter estimation, Russian e-commerce market’s CAGR was approximately 25% in 2009-2012; projected CAGR for the period of 2012-2016 fluctuates from 22% to 35% by different estimations.
2013F 2014F 2015F 2016F
12
RETAIL IN RUSSIANon-Food Retail Segments
RETAIL IN RUSSIA
RUSSIA. Non-Food Retail Segments
Sales, USD bln (estimation)
2011 2012
Electronics & Home Appliances
Household Goods & DIY*
Kids’ goods **
Furniture
Perfumes & Cosmetics
Jewelry & Watches
Pets’ Products
+23%
+24%
+12%
+15%
+13%
+13%
+21%
Segment CAGR
2012-2016
~ 11%
~ 13%
~ 16%
~ 12%
~ 16%
~ 19%
~ 10%
~ 17%
Share of Internet Sales
~ 2%
~ 6%
~ 4%
~ 4%
~ 1%
~ 9%
CSR Enter estimation based on official statistics
* Textiles, household chemical goods, tableware, floor coverings, building materials ** Excluding baby food
Sources: analysis of CSR Enter, Rosstat, GFK
* In current prices (including inflation). Exchange rate: 1 USD = 31.065 RUR
2,9
7,5
11,1
11,3
14,3
22,3
37,7
2,4
6,6
9,8
9,8
12,3
18,0
30,6
13
18% 12%
9%
Товары для красоты и здоровья Парфюмерия и косметика
Одежда и обувь
13.9% 11.3% 12.3%
8.5%
29% 29% 28%
Мебель Товары для дома и DIY
Ювелирные украшения и часы
15.1% 12.9%
20.8% 18.8%
10,7% 7,8%
4,7%
Одежда и обувь Товары для дома и DIY
Парфюмерия и косметика
10.3% 7.4% 7.7% 7.6%
37% 28%
13%
Автозапчасти Спортивные товары
Ювелирные украшения и часы
12.1% 11.6% 16.1%
11.2%
8% 6%
3%
Товары для красоты и здоровья
Товары для спорта и отдыха
Одежда и обувь 7.9%
2.7% 10.8%
5.2%
2.0% -0.5% 0.8% -1.3%
GROWTH RATES OF WORLDWIDE MARKETS
1st QUARTER 2013
* Non-food retail does not include retail sales of automobiles and petrol. ** In all rates considering 1st quarter 2012 the updated data is taken.
WORLDWIDE RETAIL GROWTH RATES SLOW DOWN
Growth rate 1st quarter 2013 to 1st quarter 2012
Growth rate 1st quarter 2012 to 1st quarter 2011
Sources: analysis of CSR Enter, US Census, Eurostat, NBSC, IBGE, Statistics South Africa, Rosstat
Health & Beauty Sports & Outdoor
Apparel & Footwear
Health & Beauty Perfumes & Cosmetics
Apparel & Footwear
Furniture Household Goods & DIY
Jewelry & Watches
Clothing & Footwear Household Goods & DIY Perfumes & Cosmetics
Auto Parts Sports & Outdoor
Jewelry & Watches
0,3% -1,6% -2,8%
Товары для красоты и здоровья Электроника
Одежда и обувь
Health & Beauty Electronics
Apparel & Footwear
Retail Non-Food Retail* Top-3 Segments
USA
European Union**
Brazil
China**
South Africa
Russia**
SEGMENTANALYSIS
PERFUMES & COSMETICS
GET NOWSEGMENT ANALYSIS OF INTERNATIONAL & RUSSIAN RETAIL [email protected]
15
METHODOLOGY
«Worldwide markets» section is based on the data provided by National Statistical Services: US Census («Health & personal care» sales excluding pharmacies and drug stores sales) and National Bureau of Statistics of China («Perfumes & Cosmetics» category). Historical sales are calculated in current prices (including inflation), the forecast sales are calculated according to McKinsey and Euromonitor estimations.
«Online-retailers product range» section is based on the analysis of 5 selected companies of the industry: «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru» — in accordance with the SKU available on the website. Price ranges are calculated according to present classification:
«Worldwide markets» section is based on the data provided by National Statistical Services: US Census («Health & personal care» sales excluding pharmacies and drug stores sales) and National Bureau of Statistics of China («Perfumes & Cosmetics» category). Historical sales are calculated in current prices (including inflation), the forecast sales are calculated according to McKinsey and Euromonitor estimations.
«Online-retailers product range» section is based on the analysis of 5 selected companies of the industry: «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru» - in accordance with the SKU available on the website. Price ranges are calculated according to present classification:
METHODOLOGY
Economy Mid - Mid Mid + Premium
Perfumes Products < 1 000 1 001 - 1 500 1 501 - 2 000 2 001 - 2 500 > 2 501
Gift Sets < 1 000 1 001 - 1 500 1 501 - 2 000 2 001 - 2 500 > 2 501
Skin & Body Care Products < 300 301 - 600 601 - 900 901 - 1 200 > 1 201
Hair Care Products < 300 301 - 600 601 - 900 901 - 1 200 > 1 201
Make-up Products < 300 301 - 600 601 - 900 901 - 1 200 > 1 201
16
WORLDWIDE MARKETS
PERFUMES & COSMETICS MARKET IN THE US
USARetail Sales*, USD bln
Share of Perfumes & Cosmetics in Non-Food Retail
While the projected CAGR of Perfumes & Cosmetics market in the US for 2012-2016 is 5%, Internet sales are to grow almost twice faster (~10%).
* In current prices (including inflation). Forecast sales are based on the growth rates at constant prices (Euromonitor) and inflation (US Census).
Sources: US Census, Euromonitor, analysis of CSR Enter
KEY FACTS
2,1%
2012
35.5 3.,4 42.3
46.9 49.1 51.4 53.8 56.3
8.0% 8.2% 7.9% 8.0% 8.5% 8.9% 9.4% 9.9%
2009 2010 2011 2012 2013П 2014П 2015П 2016П
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 10% CAGR 2012-2016 = 5%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
17
WORLDWIDE MARKETS
PERFUMES & COSMETICS MARKET IN CHINA
CHINARetail Sales*, USD bln
KEY FACTS
According to the estimation Perfumes and Cosmetics market share in total retail market in China is to grow up from 6.6% in 2012 to 17.2% in 2016.
* In current prices (including inflation). Exchange rate: 1 RMB = 0,1585 USD
Sources: NBSC, analysis by CSR Enter
Share of Perfumes & Cosmetics in Non-Food Retail
23.5 27.4 30.2 33.2
36.5 40.1
44.2 48.6
2.4% 4.0% 5.1% 6.6% 8.3% 10.6%
13.5% 17.2%
2009 2010 2011 2012 2013П 2014П 2015П 2016П
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 12% CAGR 2012-2016 = 10%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
18
PERFUMES & COSMETICS MARKET IN RUSSIASALES AND GROWTH RATES
KEY FACTS
The economic crisis of 2008-2009 had no significant impact on this segment: CAGR remained high (21%) for the period of 2007-2009.
Projected growth rate (CAGR) of market sales in Russia for 2012-2016 is about 16% thus Perfumes & Cosmetics sales can reach 20 USD bln in 2016.
* In current prices (including inflation). Exchange rate: 1 USD = 31,065 RUR.
Sources: Rosstat, Euromonitor, analysis by CSR Enter
Share of Perfumes & Cosmetics in Non-Food Retail
RUSSIARetail Sales in Current prices*, USD bln
7.3 8.4 9.8
11.1 12.9
14.9 17.3
20.0
2009 2010 2011 2012 2013П 2014П 2015П 2016П
CAGR 2012-2016 = 16%
CAGR 2009-2012 = 15%
2013F 2014F 2015F 2016F
19
Growth in constant prices, %
Growth in current prices, %
MARKET VOLUME AND INFLATION
* The data rate of «Sports & Outdoor» sales in 1Q 2012 is incomparable with 1Q 2011 because of Rosstat methodological change.
1Q 2012 to 1Q 2011 1Q 2013 to 1Q 2012
Sources: Rosstat, analysis by CSR Enter
PERFUMES & COSMETICS MARKET IN RUSSIA
n/a*
20.1%
10.7%
8.8%
3.0%
6.5%
9.6%
5.2%
3.4%
3.0%
37.5%
28.1%
24.4%
13.1%
11.8%
11.7%
11.3%
10.0%
7.4%
9.5%
8.8%
-1.9%
7.3%
14.2%
9.8%
8.3%
3.5%
24.4%
19.8%
14.9%
22.7%
14.0%
17.1%
14.9%
12.6%
Автозапчасти
Спортивные товары
Игры и игрушки
Ювелирные украшения и часы
Товары для дома и DIY
БТиЭ
Косметика и парфюмерия
Мебель
Одежда и обувь
Auto Parts
Sports & Outdoor
Toys & Games
Jewelry & Watches
Household Goods & DIY
Electronics & Home Appliances
Perfumes & Cosmetics
Furniture
Clothes & Footwear
INTERNET ~ 3-5%
DIRECT SALES + MLM* ~ 40-45%
OFFLINE SALES ~ 45-50%
KEY SALES CHANNELS, % KEY FACTS
q The share of direct sales through catalogs is reducing in favor of Internet sales. According to CSR Enter estimation this channel will grow about 2 times faster than the total market with CAGR of about 30% in 2012-2016.
* MLM – Multi-level marketing – is a marketing strategy in which the sales force is generated mainly from the recruited salespeople
SHARE OF DISTANCE SALES
Sources: analysis by CSR Enter
PERFUMES & COSMETICS MARKET IN RUSSIA
KEY FACTS
The share of direct sales through catalogs is reducing in favor of Internet sales. According to CSR Enter estimation this channel will grow about 2 times faster than the total market with CAGR of about 30% in 2012-2016.
20
KEY SALES CHANNELS%
21
KEY FACTS
q Maximum peak of retail sales in Russia within a year has been reached in December (sales are 2.3x of monthly average) and in March (1,4x of monthly average)
q Minimum peaks of retail sales in
Russia within a year have been reached in April and May
SEASONALITY OF RETAIL SALES * 2012
Source: analysis by CSR Enter
SEASONALITY PERFUMES & COSMETICS MARKET IN RUSSIA
0.8 1.1
1.4
0.6 0.6 0.7 0.9 0.9 0.8
1.1 0.9
2.3
* One «unit» stands for the arithmetic mean value of market sales per annum divided into 12 months. Consequently the diagram illustrates real distribution of annual sales by months.
PERFUMES & COSMETICS MARKET IN RUSSIA
SEASONALITY
SEASONALITY OF RETAIL SALES *2012
KEY FACTS
Maximum peak of retail sales in Russia within a year has been reached in December (sales are 2.3x of monthly average) and in March (1,4x of monthly average)
Minimum peaks of retail sales in Russia within a year have been reached in April and May
Source: analysis by CSR Enter* One «unit» stands for the arithmetic mean value of market sales per annum divided into 12 months. Consequently the diagram illustrates real distribution of annual sales by months.
22
The core sales channel - OFFLINE
Spec
ialis
t Re
taile
rs
Mix
ed P
rodu
ct R
ange
Ret
aile
rs
The core sales channel - ONLINE
Producers practicing direct sales through catalogue and multichannel marketing
* Drogerie retailers - non-food retail chains specialized in day-to-day goods including perfumes, cosmetics, home care etc.
Multichannel retailers Online retailers
Traditional specialist retailers
Selection - 15 companies with revenue more than 300 mln RUR in 2012 disclosed in mass media and Spark Interfax
Drogerie retailers
The size corresponds for total consolidated revenue of each company (without VAT) in 2012. Source: analysis by CSR Enter
KEY TYPES OF THE MARKET PLAYERS PERFUMES & COSMETICS MARKET IN RUSSIA
Avon
Oriflame
L’Etoile Amway
Rive Gauche
Ile De Beaute
Mary Kay
Faberlic
Yves Rocher
Sangi Stil
Magnit Cosmetics
Ulybka Radugi
E5.ru
Ozon.ru
Enter
23
Average number of weekly unique visitors within first 13 weeks in 2013, in thousand
Aver
age
grow
th r
ate
of w
eekl
y tr
affi
c w
ithin
fir
st 1
3 w
eeks
in 2
013,
%
DIY (Do It Yourself)
Furniture
Kids’ Products
Household Goods
Sports & Outdoor
Jewelry
PERFUMES & COSMETICS
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6% Average = 922
200 900 100 2000 3000
Auto Parts
Electronics & Home Appliances
Clothes & Footwear
Mixed Product Range
* Traffic of retail segments is estimated by top-3 companies in each segment.
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
PERFUMES & COSMETICS MARKET IN RUSSIA
Average = 2,4%
Source: monitoring of internet retailers by CSR Enter
GET NOWTOP-66 ONLINE-RETAILERS WEEKLY TRAFFIC [email protected]
PERFUMES & COSMETICS MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1ST QUARTER 2013
24
WEEKLY TRAFFIC OF KEY PLAYERS WEBSITES IN 1st QUARTER 2013 Unique weekly visitors, in thousand
Average growth rate: 1,1%
Average growth rate: 2,0%
Average growth rate: 1,6%
Average growth rate: 6,8%
Source: monitoring of internet retailers by CSR Enter
PERFUMES & COSMETICS MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
121 121 123 121 139
126 130 125 184
195 154 179
154
1 2 3 4 5 6 7 8 9 10 11 12 13 Number of a week
etoya.ru
letu.ru
shop.rivegauche.ru
среднее
Ile De Beaute (etoya.ru)
L’Etoile (letu.ru)
Rive Gauche (shop.rivegauche.ru)
Average
PRODUCT RANGE BREAKDOWN* IN ACCORDANCE WITH THE SKU AVAILABLE ON THE ONLINE RETAILERS WEBSITES
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection – «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru» websites
MAKE-UP PRODUCTS
SKIN & BODY CARE PRODUCTS
PERFUMES PRODUCTS HAIR CARE PRODUCTS
KEY FACTS
q The most significant number of SKU are goods from 3 categories: Make-up Products (34% of the product range*), Body & Facial Care products (34%) and Perfumes products (21%) – in total almost 90% of the online retailers’ product mix
ONLINE RETAILERS PRODUCT RANGE STRUCTURE
21% 2%
9%
34% 34%
GIFT SETS
Source: monitoring of internet retailers by CSR Enter
ONLINE RETAILERS PRODUCT RANGESTRUCTURE
PRODUCT RANGE BREAKDOWN*in accordance with the sku available on the online retailers websites
KEY FACTS
The most significant number of SKU are goods from 3 categories: Make-up Products (34% of the product range*), Body & Facial Care products (34%) and Perfumes products (21%) – in total almost 90% of the online retailers’ product mix
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection — «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru» websites
Source: monitoring of internet retailers by CSR Enter
25
GET NOWINTERNET RETAILERS PRODUCT RANGE [email protected]
26The classification is disclosed on «methodology» slide
Economy 26%
Mid – 15%
Premium 31%
Mid + 14%
Economy 19%
Premium 31%
Economy 5%
Premium 40%
Mid 12%
Economy 21%
L’ETOILE EL DE BEAUTE RIVE GAUCHE OZON.RU
Economy 50%
THE MARKET *
Premium 18%
Mid + 14%
Mid 16%
Mid – 19%
Economy 33%
ENTER.RU
Premium 53%
Mid – 16%
Mid 18%
Mid + 16%
Mid + 18%
Mid 16%
Mid – 8%
Mid + 15%
Mid – 12%
Premium 11%
Mid + 7%
Mid 11%
Mid – 21% Mid
14%
* According to total number of SKU of the following companies: «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru»
ONLINE RETAILERS PRODUCT RANGE PRICE RANGES (ACCORDING TO THE NUMBER OF SKU)
Source: monitoring of internet retailers by CSR Enter
KEY FACTS
§ Consolidated share of top-10 brands (according to the number of SKU*) is just about 20%
Dior 3%
Clarins 3%
Shiseido 3%
Clinique 2%
L'Oreal Paris 2%
Estee Lauder 2%
Collistar 2%
Payot 2%
Givenchy 2%
Guerlain 2%
Other 80%
ONLINE RETAILERS PRODUCT RANGE TOP-10 BRANDS (ACCORDING TO NUMBER OF SKUs)
Source: monitoring of internet retailers by CSR Enter * According to total number of SKU of the following companies: «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru»
KEY FACTS
Consolidated share of top-10 brands (according to the number of SKU*) is just about 20%
* According to total number of SKU of the following companies: «Il de Beaute», «L’Etoile», «Rive Gauche», «Ozon.ru», «Enter.ru»
Source: monitoring of internet retailers by CSR Enter
27
Traditional offline market develops steadily. It’s occupied by federal players competing in quantity and quality of exclusive purchasing contracts and actively promoting private labels.
Detailed researches indicate that the premium class perfume is equally demand by customers both in large cities and regions. Regional consumers with lower income are ready to spend for perfumes however they do really save money on care cosmetics and make-up products. During the high season buyers prefer to buy premium class perfumes as a gift (especially in December)
Internet sales of perfumes and cosmetics are developing intensively. Enter’ analytics demonstrate that the conversion of products in this category is 10% higher compared to the other products. Most likely it happens due to the fact that Internet consumer comes for the very particular product: favorite perfume, tested tone or hair-dyes.
Nevertheless the major brands and retailers give preference to the traditional offline retailing, being very watchful to the web-shop window. That definitely stops the development of e-commerce and stimulates shadow market.
OFELIA SAMEDOVADirector of «Jewelry, Watches & Perfumes» Department
ENTER OUTLOOK
28
SEGMENTANALYSIS
JEWELRY & WATCHES
IN PARTNERSHIP WITH«LUCAS ZOLOTO»
GET NOWSEGMENT ANALYSIS OF INTERNATIONAL & RUSSIAN
RETAIL [email protected]
30
METHODOLOGY
«Worldwide markets» section is based on the data provided by National Statistical Services: US Census («Jewelry stores» category) and National Bureau of Statistics of China («Gold and Silver jewelries» category). Historical sales are calculated in current prices (including inflation), forecast sales are calculated according to McKinsey and Euromonitor estimations.
«Online-retailers product range» section is based on the analysis of 5 selected companies: «Sunlight», «Magicgold.ru», «MIUZ.ru», «Almaz-holding.ru», «Enter.ru» – in accordance with the SKU available on the website. Price ranges are calculated according to present classification:
Economy Mid Premium Luxury
Jewelry with precious stones Rings < 6 500 6 501 ₋ 13 000 13 001 ₋ 25 000 > 25 001
Jewelry with precious stones Earrings < 9 500 9 501 ₋ 23 000 23 001 ₋ 30 000 > 30 001
Jewelry with precious stones Neckwear < 3 500 3 501 ₋ 12 000 12 001 ₋ 27 000 > 27 001
Jewelry with semi-precious stones Rings < 4 000 4 001 ₋ 8 500 > 8 501
Jewelry with semi-precious stones Earrings < 8 000 8 001 ₋ 12 500 > 12 501
Jewelry with semi-precious stones Neckwear < 3 000 3 001 ₋ 5 000 > 5 001
Jewelry with artificial gemstones Rings < 3 000 3 001 ₋ 6 000 > 6 001
Jewelry with artificial gemstones Earrings < 5 000 5 001 ₋ 9 000 > 9 001
Jewelry with artificial gemstones Neckwear < 2 000 2 001 ₋ 3 500 > 3 501
Jewelry without stones Rings < 3 000 3 001 ₋ 6 000 > 6 001
Jewelry without stones Earrings < 5 000 5 001 ₋ 9 000 > 9 001
Jewelry without stones Chains < 5 000 5 001 ₋ 8 000 > 8 001
Jewelry without stones Wristwear < 3 500 3 501 ₋ 6 500 > 6 501
Jewelry without stones Neckwear < 2 000 2 001 ₋ 3 500 > 3 501
«Worldwide markets» section is based on the data provided by National Statistical Services: US Census («Jewelry stores» category) and National Bureau of Statistics of China («Gold and Silver jewelries» category). Historical sales are calculated in current prices (including inflation), forecast sales are calculated according to McKinsey and Euromonitor estimations.
«Online-retailers product range» section is based on the analysis of 5 selected companies: «Sunlight», «Magicgold.ru», «MIUZ.ru», «Almaz-holding.ru», «Enter.ru» – in accordance with the SKU available on the website. Price ranges are calculated according to present classification:
METHODOLOGY
31
WORLDWIDE MARKETS
JEWELRY MARKET IN THE US
USARetail Sales*, USD bln
Share of Jewelry in Non-Food Retail
While the projected CAGR of Jewelry sales in the US 2012-2016 is 4%, the same rate for Internet sales is about 10%.
* In current prices (including inflation). Forecast sales are based on the growth rates at constant prices (Euromonitor) and inflation (US Census).
Sources: US Census, Euromonitor, analysis of CSR Enter
KEY FACTS
1,4%
2012
26.0 26.4 29.1 30.7 31.9 33.1 34.4 35.8
5.8% 6.1% 6.1% 6.2% 6.6% 7.0% 7.4% 7.8%
2009 2010 2011 2012 2013 2014 2015 2016
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 6% CAGR 2012-2016 = 4%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
32
WORLDWIDE MARKETS
JEWELRY MARKET IN CHINA
CHINARetail Sales*, USD bln
KEY FACTS
While the projected CAGR of total jewelry sales in China for the period of 2012-2016 is 16%, the same ratio for Internet sales is more than 40%.
The share of Internet sales remains insignificant vs the background of the traditional format, but will double for the further periods.
* In current prices (including inflation). Forecast sales are based on the growth rates at constant prices (Euromonitor) and inflation (NBSC).
Exchange rate: 1 USD = 6,3091 RMB.
Sources: NBSC, analysis by CSR Enter
Share of Jewelry in Non-Food Retail 2,7%
2012
13.7 20.0
29.1 34.8
40.2 46.5
53.8 62.2
0.3% 0.2% 0.2% 0.3% 0.4% 0.4% 0.5% 0.6%
2009 2010 2011 2012 2013П 2014П 2015П 2016П
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 36% CAGR 2012-2016 = 16%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
33
JEWELRY & WATCHES MARKET IN RUSSIA
SALES AND GROWTH RATES
KEY FACTS
Projected CAGR of total jewelry sales, watches and costume jewelry in Russia is about 17% for the period of 2012-2016. Thus sales of these products are to exceed 14 bln USD by 2016.
* In current prices (including inflation). Exchange rate: 1 USD = 31,065 RUR.
Sources: Rosstat, Euromonitor, analysis by CSR Enter
Share of Jewelry in Non-Food Retail
2012
2,0%
RUSSIARetail Sales in Current Prices*, USD bln
0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.9 1.0 1.2 1.4 1.6 1.9 2.2 2.5 2.9 3.3 4.0
4.6 5.3
6.3
7.4
8.8
10.5
2009 2010 2011 2012 2013П 2014П 2015П 2016П
Часы Бижутерия Ювелирные украшения
CAGR 2009-2012 = 16%
CAGR 2012-2016 = 17%
Watches Costume Jewelry Jewelry
2013F 2014F 2015F 2016F
34
Growth in constant prices, %
Growth in current prices, %
MARKET VOLUME AND INFLATION
* The data rate of «Sports & Outdoor» sales in 1Q 2012 is incomparable with 1Q 2011 because of Rosstat methodological change.
1Q 2012 to 1Q 2011 1Q 2013 to 1Q 2012
Sources: Rosstat, analysis by CSR Enter
JEWELRY & WATCHES MARKET IN RUSSIA
n/a*
20.1%
10.7%
8.8%
3.0%
6.5%
9.6%
5.2%
3.4%
3.0%
37.5%
28.1%
24.4%
13.1%
11.8%
11.7%
11.3%
10.0%
7.4%
9.5%
8.8%
-1.9%
7.3%
14.2%
9.8%
8.3%
3.5%
24.4%
19.8%
14.9%
22.7%
14.0%
17.1%
14.9%
12.6%
Автозапчасти
Спортивные товары
Игры и игрушки
Ювелирные украшения и часы
Товары для дома и DIY
БТиЭ
Косметика и парфюмерия
Мебель
Одежда и обувь
Auto Parts
Sports & Outdoor
Toys & Games
Jewelry & Watches
Household Goods & DIY
Electronics & Home Appliances
Perfumes & Cosmetics
Furniture
Clothes & Footwear
35
JEWELRY & WATCHES MARKET IN RUSSIA
SHARE OF DISTANT SALES
KEY SALES CHANNELS,%
KEY FACTS
The share of Internet sales of jewelry in 2012 is about 1% but the segment remains one of the most promising in e-commerce in general
Sources: analysis by CSR Enter, Euromonitor
INTERNET
OTHER RETAILERS
SPECIALIST JEWELRY RETAILERS ~ 1%
~ 50% ~ 49%
36
JEWELRY & WATCHES MARKET IN RUSSIA
SEASONALITY
SEASONALITY OF RETAIL SALES *2012
KEY FACTS
Maximum peak of retail sales in Russia within a year has been reached in December (sales are 2.3x of monthly average), January (2x of monthly average) and traditionally in March (1,7x of monthly average).
Source: Partner of the research company «Lucas Zoloto»
* One «unit» stands for the arithmetic mean value of market sales per annum divided into 12 months. Consequently the diagram illustrates real distribution of annual sales by months.
2.0
0.7
1.7
0.7 0.6 0.7 0.8 0.6
0.4 0.7
1.0
2.3
Janua
ry
Februa
ry
March
April
May
June
July
Augu
st
Septem
ber
October
Novem
ber
Decem
ber
37
JEWELRY & WATCHES MARKET IN RUSSIA
MARKET STRUCTURE
SALES BREAKDOWN (2012):By material type
KEY FACTS
Sales of gold and silver jewelry makes the largest share of sales of the overall market (about 44%), with 95% of similar products produced in Russia. Also, 80% of products with colored stones are produced in the domestic market. Exactly the opposite situation is in the field of diamond products (only 30% of the products sold were produced in Russia in 2012)
Source: Partner of the research company «Lucas Zoloto»
JEWELRY WITH JEMS JEWELRY WITH DIAMONDS
OTHER JEWELRY GOLD, SILVER etc.
28% 28%
44%
70%-imported goods 30%-domestic goods
5%- imported goods 95%- domestic goods
38
JEWELRY & WATCHES MARKET IN RUSSIA
MARKET STRUCTURE
SALES BREAKDOWN (2012):By product type
KEY FACTS
The key types of products are rings, as well as the neck-accessories, occupying more than 60% of the market in terms of sales.
Source: Euromonitor
NECKWEAR
RINGS
EARRINGS
WRISTWEAR
OTHER
36%
27% 14%
16%
7%
39
Ozon.ru
ENTER
585
Yashma
Adamas
MIUZ
Russkie Samotsvety
Jenavi Accessorize Selena
Krastsvetmet
Alltime.ru
Bestwatch.ru
Bronnitskiy uvelir
Sunlight
Specialist online-retailers Costume jewelry manufacturers with
multichannel retail network
Manufacturers with retail stores
JEWELRY & WATCHES MARKET IN RUSSIA
KEY TYPES OF THE MARKET PLAYERS
The core sales channel - OFFLINE
Spec
ialis
t Re
taile
rs
Mix
ed P
rodu
ct R
ange
Ret
aile
rs
The core sales channel - ONLINE
Selection - 15 companies with revenue more than 300 mln RUR in 2012 disclosed in mass media and Spark Interfax
The size corresponds for total consolidated revenue of each company (without VAT) in 2012. Source: analysis by CSR Enter
Multichannel retailers
Online retailers
40
DIY (Do It Yourself)
Furniture
Kids’ Products
Household Goods
Sports & Outdoor
JEWELRY
Perfumes & Cosmetics
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6% Average = 922
200 900 100 2000 3000
JEWELRY & WATCHES MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
Average number of weekly unique visitors within first 13 weeks in 2013, in thousand
Aver
age
grow
th r
ate
of w
eekl
y tr
affi
c w
ithin
fir
st 1
3 w
eeks
in 2
013,
%
* Traffic of retail segments is estimated by top-3 companies in each segment. Source: monitoring of internet retailers by CSR Enter
Auto Parts
Electronics & Home Appliances
Clothes & Footwear
Mixed Product Range
Average = 2,4%
JEWELRY & WATCHES MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1ST QUARTER 2013
GET NOWTOP-66 ONLINE-RETAILERS WEEKLY TRAFFIC [email protected]
41
85 105
128 147 144 147 146 147
166 187
156
109
135
1 2 3 4 5 6 7 8 9 10 11 12 13
Number of a week
AllTime.ru
bestwatch.ru
miuz.ru
среднее
Average Growth Rate: 7,5%
Average Growth Rate: 2,0%
Average Growth Rate: -3,1%
Average Growth Rate: 3,9%
AllTime.ru
Bestwatch.ru
Miuz.ru
Average
JEWELRY & WATCHES MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
WEEKLY TRAFFIC OF KEY PLAYERS WEBSITES IN 1st QUARTER 2013 Unique weekly visitors, in thousand
Source: monitoring of internet retailers by CSR Enter
ONLINE RETAILERS PRODUCT RANGE PRODUCT MIX
PRODUCT RANGE BREAKDOWN * BY MATERIAL TYPEin accordance with the sku available on the online retailers websites
KEY FACTS
The largest amount of commodity categories by type of material takes Products with precious stones (63% of the product range *)
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection – «Sunlight», «Almaz-holding.ru», «Magicgold.ru», «Miuz.ru» websites
Source: monitoring of internet retailers by CSR Enter
42
JEWELRY WITHOUT STONES
JEWELRY WITH ARTIFICIAL GEMSTONES
13%
13%
11% 63%
JEWELRY WITH SEMI-PRECIOUS STONES
JEWELRY WITH PRECIOUS STONES
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection – «Sunlight», «Almaz-holding.ru», «Magicgold.ru», «Miuz.ru» websites
GET NOWINTERNET RETAILERS PRODUCT RANGE [email protected]
KEY FACTS
The majority of products (among available for purchase SKU on the selected websites) are rings (44% of the product range*), earrings (34%) and neckwear (15%), which together account for 93% of the product mix
43
ONLINE RETAILERS PRODUCT RANGE PRODUCT MIX
PRODUCT RANGE BREAKDOWN * BY PRODUCT TYPEin accordance with the sku available on the online retailers websites
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection – «Sunlight», «Almaz-holding.ru», «Magicgold.ru», «Miuz.ru» websites
Source: monitoring of internet retailers by CSR Enter
34% 44%
15%
3% 4%
NECKWEAR
EARRINGS
CHAINS WRISTWEAR
RINGS
44
ECONOMY 9%
MID 37%
PREMIUM 33%
LUXURY 21%
Economy 6%
Mid 34%
Luxury 8%
Premium 43%
Mid 44%
Premium 31%
Mid 36%
Luxury 35%
Premium 25%
Economy 3%
SUNLIGHT MAGICGOLD MIUZ ALMAZ
HOLDING
Economy 19%
Premium 33%
Luxury 18%
THE MARKET* Luxury 2%
Mid 25%
Economy 38%
ENTER.RU
Luxury 22%
Premium 35%
Economy 4%
Mid 31%
ONLINE RETAILERS PRODUCT RANGE PRICE RANGES (ACCORDING TO THE NUMBER OF SKU)
The classification is disclosed on «methodology» slide
* According to total number of SKU of the following companies: «Enter.ru», «Sunlight», «Almaz-holding.ru», «Magicgold.ru», «Miuz.ru»
Source: monitoring of internet retailers by CSR Enter
ENTER OUTLOOK
Conservatism is the major feature of the Russian jewelry industry and its players. JUNWEX, the main industry exhibition, demonstrates it perfectly. The key Russian producers are not keen to make any design experiments, price making experiments and year by year the produce the same best-selling SKUs, which are actually sold in the very same stores for the very same target audience. It’s obvious that the Tiffany-style ring will always stay up-to-date as little black dress by Chanel. Nevertheless I’m sure that those players who could «gain the time» will win. As the jewelry purchase is not an investment anymore. It’s proved by active growth of 17-sided diamonds sales share in comparison to the traditional 57-sided diamonds; sales of 375 standard jewelry, and silver jewelry with diamonds.
In contrast to the most Russian producers, Hong Kong manufacturers optimize the self-cost of jewelry using computer modeling, the latest technology in the
production, and reducing «manual» work. The Italian companies do make experiments with the design without increasing the weight of products (and therefore its price), and using tricks such as, for example, less weighted gold.
I think that the future of the jewelry industry in Russia belongs to the manufacturers which could take into account jewelry production cost-optimizing technologies, change the design and involve young and talented designers, working with the latest promotion channels.
By now the major sales are made offline. However, based on 2012 results consumers can and are ready to purchase jewelry online in case of: a) Trusted website b) Interesting in and convenient offer (lack of time for offline shopping). Time, correct product range, professional e-marketing will drive the online segment.
OFELIA SAMEDOVADirector of «Jewelry, Watches & Perfumes» Department
45
SEGMENTANALYSIS
FURNITURE
GET NOWSEGMENT ANALYSIS OF INTERNATIONAL & RUSSIAN RETAIL [email protected]
47
METHODOLOGY
«Worldwide markets» section is based on the data provided by National Statistical Services: US Census («Furniture stores» category) and National Bureau of Statistics of China («Furniture» category). Historical sales are calculated in current prices (including inflation), the forecast sales are calculated according to Euromonitor estimations.
«Online-retailers product range» section is based on the analysis of 12 selected companies: «Hoff», «HomeMe.ru», «Mebelrama.ru», «Mnogomeb.ru», «Toris.ru», «Aquaton», «Dyatkovo», «Ormatek», «Stolline», «Stolplit», «Shature.com», «Enter.ru» – in accordance with the SKU available on the website. Price ranges are calculated according to present classification:
Economy Mid - Mid Mid+ Premium
Mattresses < 7 000 7 001 - 12 000 12 001 - 20 000 20 001 - 30 000 > 30 001
Furniture set for bathroom < 10 000 10 001 - 18 000 18 001 - 36 000 36 001 - 50 000 > 50 001
Furniture set for living room < 10 000 10 001 - 20 000 20 001 - 40 000 40 001 - 80 000 > 80 001
Furniture set for children room < 10 000 10 001 - 20 000 20 001 - 30 000 30 001 - 50 000 > 50 001
Office chairs < 3 000 3 001 - 8 000 8 001 - 15 000 15 001 - 25 000 > 25 001
Computer desk < 1 000 1 001 - 3 000 3 001 - 8 000 8 001 - 15 000 > 15 001
Furniture set for kitchen < 8 000 8 001 - 15 000 15 001 - 35 000 35 001 - 60 000 > 60 001
Soft furniture (Sofas) < 15 000 15 001 - 25 000 25 001 - 45 000 45 001 - 70 000 > 70 001
Furniture set for dining room (table+ 4 chairs) < 5 000 5 001 - 10 000 10 001 - 20 000 20 001 - 40 000 > 40 001
Bedrooms (bed + 2 bedside tables, wardrobe, bureau, mirror)
< 20 000 20 001 - 40 000 40 001 - 70 000 70 001 - 100 000 > 100 001
48
WORLDWIDE MARKETS
FURNITURE MARKET IN THE US
USARetail Sales*, USD bln
Share of Furniture in Non-Food Retail
While the projected CAGR of total furniture sales in the USs is 3% in 2012-2016, the same rate for Internet sales is almost twice higher (6%).
* In current prices (including inflation). Forecast sales are based on the growth rates at constant prices (Euromonitor) and inflation (US Census).
Источники: US Census, Euromonitor, analysis of CSR Enter
KEY FACTS
4,2%
2012
86.1 87.2 88.8 95.6 98.7 101.9 105.2 108.6
2.8% 2.9% 3.0% 3.0% 3.1% 3.2% 3.3% 3.4%
2009 2010 2011 2012 2013 2014 2015 2016
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 4% CAGR 2012-2016 = 3%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
49
WORLDWIDE MARKETS
FURNITURE MARKET IN CHINA
CHINARetail Sales*, USD bln
KEY FACTS
The projected CAGR of total furniture sales in China is 16% for the period of 2012-2016, meanwhile the same ratio for Internet sales is about 42%, which indicated that online segment of this market in China is growing 2.5 times faster than the whole market.
* In current prices (including inflation). Forecast sales are based on the growth rates at constant prices (Euromonitor) and inflation (NBSC).
Exchange rate: 1 USD = 6,3091 RMB.
Sources: NBSC, analysis by CSR Enter
Share of Furniture in Non-Food Retail 5,8%
2012
47.5 55.0 63.8
73.7 85.3
98.6 114.0
131.8
0.2% 0.6% 1.1% 1.2% 1.5% 1.9% 2.3%
2.8%
2009 2010 2011 2012 2013 2014 2015 2016
Продажи, млрд. долл. Доля онлайн-ритейла, %
CAGR 2009-2012 = 16% CAGR 2012-2016 = 16%
Retail Sales, USD bln Share of Internet Sales, %
2013F 2014F 2015F 2016F
FURNITURE MARKET IN RUSSIA
SALES AND GROWTH RATES
KEY FACTS
The projected CAGR of total furniture sales in Russia is about 12% for the period of 2012-2016, while Internet sales are to grow by 20% per year.
* In current prices (including inflation). Exchange rate: 1 USD = 31,065 RUR.
Sources: Rosstat, Euromonitor, analysis by CSR Enter
Share of Furniture in Non-Food Retail 3,1%
2012
RUSSIARetail Sales in current prices*, USD bln
50
7.9 8.6 9.8
11.3 12.7
14.3 16.1
18.1
2009 2010 2011 2012П 2013П 2014П 2015П 2016П
CAGR 2009-2012 = 13% CAGR 2012-2016 = 12%
2013F 2014F 2015F 2016F
51
Growth in constant prices, %
Growth in current prices, %
MARKET VOLUME AND INFLATION
* The data rate of «Sports & Outdoor» sales in 1Q 2012 is incomparable with 1Q 2011 because of Rosstat methodological change.
1Q 2012 to 1Q 2011 1Q 2013 to 1Q 2012
Sources: Rosstat, analysis by CSR Enter
PERFUMES & COSMETICS MARKET IN RUSSIA
n/a*
20.1%
10.7%
8.8%
3.0%
6.5%
9.6%
5.2%
3.4%
3.0%
37.5%
28.1%
24.4%
13.1%
11.8%
11.7%
11.3%
10.0%
7.4%
9.5%
8.8%
-1.9%
7.3%
14.2%
9.8%
8.3%
3.5%
24.4%
19.8%
14.9%
22.7%
14.0%
17.1%
14.9%
12.6%
Автозапчасти
Спортивные товары
Игры и игрушки
Ювелирные украшения и часы
Товары для дома и DIY
БТиЭ
Косметика и парфюмерия
Мебель
Одежда и обувь
Auto Parts
Sports & Outdoor
Toys & Games
Jewelry & Watches
Household Goods & DIY
Electronics & Home Appliances
Perfumes & Cosmetics
Furniture
Clothes & Footwear
FURNITURE MARKET IN RUSSIA
SHARE OF DISTANT SALES
KEY SALES CHANNELS,*%
KEY FACTS
The share of furniture sales through Internet channel in Russia is only about 4% (Projected CAGR for the period of 2012-2016 is about 20%).
Sources: analysis by CSR Enter, Euromonitor
52
INTERNET
OTHER RETAILERS Mixed product range retailers Retailers specialized in Household goods Supermarkets
SPESIALIST FURNITURE RETAILERS
~ 4%
~ 62%
~ 34%
53
FURNITURE MARKET IN RUSSIA
SEASONALITY
SEASONALITY OF RETAIL SALES *2012
KEY FACTS
Peak sales of furniture are traditionally autumn and New Year period, from September to the end of the year when the market generates nearly half of annual sales.
The period of the most notable decline is summer, due to the long holydays.
Source: analysis by CSR Enter* One «unit» stands for the arithmetic mean value of market sales per annum divided into 12 months. Consequently the diagram illustrates real distribution of annual sales by months.
0.9 0.8 0.8 0.7 0.7 0.7
0.8
1.0 1.1
1.3 1.5
1.7
Janua
ry
Februa
ry
March
April
May
June
July
Augu
st
Septem
ber
October
Novem
ber
Decem
ber
54
FURNITURE MARKET IN RUSSIA
MARKET STRUCTURE
SALES BREAKDOWN2012
KEY FACTS
According to CSR Enter estimation, the structure of the furniture market remains fairly stable. Thus, the share of soft and cabinet furniture is over 70%, meanwhile sales of kitchen furniture are actively developing (share for the 2012 — about 15%).
Source: analysis by CSR Enter
KITCHEN FURNITURE
CABINET FURNITURE SOFT FURNITURE
37% 36%
15% 12% OTHERS
55
Specialist online-retailers without
showrooms
Manufacturers with retail stores
Retailers without production capacities
FURNITURE MARKET IN RUSSIA
KEY TYPES OF THE MARKET PLAYERS
The core sales channel - OFFLINE
Spec
ialis
t Re
taile
rs
Mix
ed P
rodu
ct R
ange
Ret
aile
rs
The core sales channel - ONLINE
Selection - 15 companies with revenue more than 300 mln RUR in 2012 disclosed in mass media and Spark Interfax
The size corresponds for total consolidated revenue of each company (without VAT) in 2012. Source: analysis by CSR Enter
Multichannel retailers
ENTER IKEA
HomeMe.ru Stolplit
Shatura Lazurit
Maria
Kuhnistroy
Stokdivanov.ru
Mnogomeb.ru Miass-mebel
Hoff
А-stil Mebelrama.ru
Yuterra
56
DIY (Do It Yourself)
FURNITURE
Kids’ Products
Household Goods
Sports & Outdoor
Jewelry
Perfumes & Cosmetics
-‐3%
-‐2%
-‐1%
0%
1%
2%
3%
4%
5%
6% Average = 922
200 900 100 2000 3000
FURNITURE MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
Average number of weekly unique visitors within first 13 weeks in 2013, in thousand
Aver
age
grow
th r
ate
of w
eekl
y tr
affi
c w
ithin
fir
st 1
3 w
eeks
in 2
013,
%
* Traffic of retail segments is estimated by top-3 companies in each segment. Source: monitoring of internet retailers by CSR Enter
Auto Parts
Electronics & Home Appliances
Clothes & Footwear
Mixed Product Range
Average = 2,4%
FURNITURE MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1ST QUARTER 2013
GET NOWTOP-66 ONLINE-RETAILERS WEEKLY TRAFFIC [email protected]
57
84 93
106 98
122 117 105 109
111 103
110
126 132
1 2 3 4 5 6 7 8 9 10 11 12 13 Number of a week
Mebelrama.ru
askona.ru
shatura.com
среднее
Average Growth Rate: 11,7%
Average Growth Rate: 3,9%
Average Growth Rate: 0,0%
Average Growth Rate: 4,8%
Mebelrama.ru
Askona.ru
Shatura (shatura.ru)
Average
FURNITURE MARKET IN RUSSIA
WEEKLY TRAFFIC OF KEY MARKET PLAYERS WEBSITES IN 1st QUARTER 2013
WEEKLY TRAFFIC OF KEY PLAYERS WEBSITES IN 1st QUARTER 2013 Unique weekly visitors, in thousand
Source: monitoring of internet retailers by CSR Enter
58
18%
16%
14% 13%
11%
9%
6%
5% 5%
2% 1% Мягкая мебель
Мебель для спальни
Мебель для кухни
Мебель для гостиной
Мебель для домашнего кабинета
Мебель для прихожей
Мебель для детской
Мебель для ванной
Матрасы
Шкафы-купе
Мебель из ротанга
Soft furniture
Bedroom furniture
Kitchen furniture
Living room furniture
Home office furniture
Hall furniture
Children room furniture
Bathroom furniture
Matrasses
Wardrobes
Rattan furniture
ONLINE RETAILERS PRODUCT RANGE STRUCTURE
PRODUCT RANGE BREAKDOWN *in accordance with the sku available on the online retailers websites
KEY FACTS
The basic amount of product types available for purchase on selected websites are «soft furniture» (18% of the product range*), «Bedroom furniture» (16%) and «Kitchen furniture» (15%) which together account for almost 50% of the product range.
* According to monitoring of internet retailers by CSR Enter in March 2013. Selection – «Hoff», «Mebelrama.ru», «HomeMe.ru» websites
Source: monitoring of internet retailers by CSR Enter
GET NOWINTERNET RETAILERS PRODUCT RANGE [email protected]
59
ECONOMY 15%
MID– 22%
MID 28%
PREMIUM 16%
MID + 19%
Economy 6%
Mid– 13%
Premium 13%
Mid + 32%
Economy 15%
Mid– 18%
Mid + 22%
Mid– 39%
Mid 16%
Economy 40%
SHATURA MEBELRAMA.RU HOMEME.RU HOFF
Economy 8%
Mid– 18%
Mid 21%
Mid + 16%
Premium 37%
THE MARKET*
Mid 37%
Mid + 14%
Mid 35%
Mid– 32%
Economy 17%
ENTER.RU
Premium 15%
Mid 30%
Mid + 4% Premium 1% Premium 2%
Mid + 24%
Mid 32%
Mid– 31%
Economy 12%
STOLLINE
Премиум 2% Premium 1%
Mid 32%
Mid– 37%
Economy 24%
STOLPLIT
Премиум 2% Premium 1%
Mid + 6%
ONLINE RETAILERS PRODUCT RANGE PRICE RANGES (ACCORDING TO THE NUMBER OF SKU)
The classification is disclosed on «methodology» slide
* According to total number of SKU of the following companies: «Enter.ru», «Hoff», «HomeMe.ru», «Mebelrama.ru», «Mnogomeb.ru», «Toris.ru», «Aquaton», «Dyatkovo», «Ormatek», «Stolline», «Stolplit», «Shature».
Source: monitoring of internet retailers by CSR Enter
ENTER OUTLOOK
Today multichannel (offline and online) sales of furniture develop rapidly. The perspectives of the furniture market in Internet are obvious. Both producers and retailers continue to develop e-sales. Medium and small companies of the market consider Internet-related projects mainly as a «trial» and try to catch the trend, while federal players already demonstrate positive results both in cabinet furniture and soft furniture.
Enter’s furniture sales breakdown is practically the same as the market average. This allows to conclude that most consumers have no significant prejudice buying through internet, terminal, contact-center or catalogue.
ANTON TERENTYEVDirector of «Furniture» Department
60
SPECIAL FOCUS:
WORLDWIDEBEST-PRACTICES
BUSINESS MODELS
KEY TRENDS
PROFILES OF KEY INTERNATIONAL PLAYERS
GET NOWANALYSIS OF INTERNATIONAL BEST-PRACTICES ANDRETAIL STRATEGIES [email protected]
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INCREASING SHARE OF HIGH-MARGIN PRODUCTS
Quick product range extension and expansion to different sales channels
WORLDWIDE BEST-PRACTICES RETAIL STRATEGIES
MIXED PRODUCT RANGE RETAILERS SPECIALIST RETAILERS
Product range extension and sales channels diversification
Product range extension due to acquisitions of retailers specialized on different products
Expansion to different markets (В2В, С2С, loan facilities etc.)
Target, Dangdang
Sears, Amazon
Tesco, Walmart
Product range extension in related product categories
Adding with extra services related to the products the company sells
Carpetright, Leroy Merlin
Ulta, Blue Nile
IKEA
DEVELOPING WITHIN CHOSEN MARKET SEGMENTS
63
Revenue Structure of Target (2012)
Revenue Structure of Sears Holdings (2012)
Gradual increasing share of high-margin product categories («Perfumes & Cosmetics», «Apparel & Footwear», «Jewelry») due to decreasing share of low-margin categories
WORLDWIDE BEST-PRACTICES RETAIL STRATEGIES - MIXED PRODUCT RANGE RETAILERS
22% 20% 19% 18%
23% 24% 25% 25%
20% 20% 19% 19%
16% 17% 19% 20%
19% 19% 19% 18%
2009 2010 2011 2012
Home Furnishings & Décor
Food & Pet Supplies
Apparel & Accessories, Jewelry & Costume Jewelry
Health, Beauty & Household Essentials
Electronics & Home Appliances, Sport & outdoor, Toys
49% 49% 49% 47%
28% 29% 29% 30%
14% 14% 14% 14%
8% 8% 8% 10%
2009 2010 2011 2012
Service and Other
Food and Drug
Apparel & Footwear, Jewelry, Costume Jewelry
Electronics & Home Appliances, Auto Parts, Sport & outdoor, Toys
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ULTA SALON
CHILDREN’S PLACE BLUE NILE
BETER BED
Wide range of extra services in the company outlets
Unique service of providing customized products
Wide range of stores (different locations); wide product range
Purchase convenience and confidence in retailer
LOYALTY
Gaining client’s trust
Forming a habit to purchase exactly in this company To meet client’s needs in
self-actualization
Customer acquisition
WORLDWIDE BEST-PRACTICES RETAIL STRATEGIES – SPECIALIST RETAILERS
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WORLDWIDE BEST-PRACTICESPERFUMES & COSMETICS MARKET — KEY BUSINESS MODELS
CHARACTERISTICSBUSINESS MODELS *
Majority of products — private labels The main sales channel — chain of sales representatives (brokers) Lack of personal stationary retail outlets Internet — additional secondary sales channel with informational function (delivery — outsourcing)
PRODUCERS PRACTICING DIRECT SALES & MULTI-LEVEL MARKETING Avon, Amway, Mary Kay, Faberlic
TRADITIONAL OFFLINE RETAILERS DEVELOPING INTERNET SALES CHANNEL Sasa, Ulta Salon, Sephora, Perfumania
Wide chain of offline owned stores Internet — valuable sales channel (wide product range) Online sales is growing comparably with total sales or faster
ONLINE RETAILERS, «GROUP OF INTERNET SHOPS» Drugstore.com, Quidsi.com
Umbrella brand for specialized internet websites within one large holding Each separate website has its own brand and product range Selling 3rd parties products; Lack of private labels
* Without mixed product range retailers Source: analysis by CSR Enter
66
WORLDWIDE BEST-PRACTICESPERFUMES & COSMETICS MARKET – TRENDS
CUSTOMER LOYALTY PROGRAM & GIFT CERTIFICATESStimulate customers to purchase more to get additional discounts, bonuses etc.1FREE SAMPLES & GIFTSFree offer to try new production; Gifts after reaching the level of receipt2RELATED PRODUCTS’ SETSMaking a purchase much more easier for a customer (sometimes with offering additional discount)3CUSTOMER COACHING Introducing the product range to costumers on special seminars, trainings and through specialized mass media (website, catalogue etc.)
4ADDITIONAL PRIVATE CONSULTATING & BEAUTY SHOP SERVICESAttracting potential customers by relevant (to the product) services professional consultants, visagistes etc.
5Source: analysis by CSR Enter
67
Revenue – $2,2 bln 2012 *
Capitalization – $6,2 bln By the end of 2012 *
Number of countries – 1 Number of stores – 550 Number of employees: 16 000 By the end of 2012 *
Specialization: Perfumes & Cosmetics, Beauty& Health products and services
Revenue Structure:
q According to overall results in 2011 online sales increased by 27% to 2010
q Share of online sales in the company revenue in 2011 came to 2%
q According to overall results in 2012 gross profit margin came to 38%
q More than 50% of total sales accounts for 11 million active users of the customer loyalty program
q 10% of total area in the company stores is taken for beauty shops
* 52 weeks within the year ended 02.02. Sources: the company official website http://www.ulta.com, Internetretailer.com, Bloomberg.com, analysis by CSR Enter
Online Offline 2%
98%
1,085 1,223 1,455
1,776
2,220
46 68 119 196 280
4.3% 5.6%
8.2%
11.0% 12.6%
-3,0%
-1,0%
1,0%
3,0%
5,0%
7,0%
9,0%
11,0%
13,0%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2008 2009 2010 2011 2012
Revenue, mln USD Operational profit, mln USD Operational profit margin, %
WORLDWIDE BEST-PRACTICES ULTA SALON, COSMETICS & FRAGRANCES
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WORLDWIDE BEST-PRACTICESJEWELRY & WATCHES MARKET – KEY BUSINESS MODELS
CHARACTERISTICSBUSINESS MODELS *
Customization of purchase (a customer can make his own individual product: for instance to choose characteristics (such a setting) of a brilliant Focus on quality: providing certificates after purchase
«INDIVIDUAL APPROACH»Blue Nile, Ross Simons, Zale
«AUCTION TRADE»Bidz.com, JTV Auctions, Fallingstarauctions.com
Focus on auctions (lasting several hours) – as a result increasing traffic on the companies’ websites English open auction (ascending-price action) – start from 1$ Dutch auction – start from maximum price, declining till somebody’s purchase
«DISCOUNTING»Jewelry.com
Majority of products are sold at a reduced price (comparing with prices in a store) sometimes with discount 30-50% Liquidation sales with discounts more than 50%
* Without mixed product range retailers Source: analysis by CSR Enter
69
INTERNATIONAL BEST-PRACTICESJEWELRY & WATCHES MARKET – TRENDS
CUSTOMER COACHINGInforming clients about jewelry through specialized website section – some kind of a library with information about, for instance, kinds of brilliants, gems etc.
1CUSTOMIZED OFFERSA customer can chose any characteristics thus make his own individual product2EXTRA JEWELRY SALON SERVICESTo increase customer loyalty companies offer relevant care services or insurance3PAWNSHOPAttracting new clients offering new service — change old jewelry to new one4VISUALIZATION Focus on website interface as on one of the main sales channels — adding 3D review, attaching deep product characteristics and certificates
5Source: analysis by CSR Enter
70
Revenue – $400 mln 2012 *
Capitalization – $478 mln By the end of 2012 *
Number of countries – 45**
Number of employees – 241 By the end of 2012 *
Specialization: Jewelry
Revenue Structure:
q According to overall results in 2012 total sales increased by 15% comparing to 2011
q By the end of 2012 gross profit margin came to 19%
q 1/3 of the company website traffic in 4th quarter 2012 came from mobile devices
q The company website interface gets capability to order customized product
q From 2013 Xiu.com is to sell Blue Nile products in China
* 52 weeks within the year ended 30.12. ** Countries the company deliver to
Sources: the company official website http://www.bluenile.com, Internetretailer.com, Bloomberg.com, analysis by CSR Enter
ONLINE
100%
WORLDWIDE BEST-PRACTICES BLUE NILE
295 302 333 348 400
16 19 21 17 12
5.4%
6.4% 6.4%
4.9%
3.1%
-3,0%
-2,0%
-1,0%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
0
100
200
300
400
500
600
700
800
900
1000
2008 2009 2010 2011 2012
Revenue, mln USD Operational profit, mln USD Operational profit margin, %
71
WORLDWIDE BEST-PRACTICESFURNITURE MARKET – KEY BUSINESS MODELS
CHARACTERISTICSBUSINESS MODELS *
Only Internet sales – direct delivery to the client
Collaboration with local partners for the quick delivery from their stores
ONLINE RETAILERS SELLING OWN AND PARTNERS PRODUCTSFurniture.com
TRADITIONAL OFFLINE RETAILERS DEVELOPING INTERNET SALES CHANNELHaverty’s (USA), Carpetright (Great Britain), Cost plus Sofas (Great Britain), The Brick (Canada)
PRODUCERS WITH OWN STORES, ALSO DEVELOPING INTERNET SALES CHANNELIKEA, Rooms To Go (USA), Crate&Barrel (USA)
Wide chain of offline personal stores
Internet – valuable sales channel (wide product range)
Online sales is growing comparably with total sales or faster
Majority of products - private labels
The main sales channel – chain of own stores
Internet – additional secondary sales channel with informational function (delivery – outsourcing)
Source: analysis by CSR Enter
72
INTERNATIONAL BEST-PRACTICESFURNITURE MARKET – TRENDS
ROOM DESIGININGSeparate section of website – specialized service that helps to make arrangement of furniture before purchase
1CUSTOMIZED OFFERSA customer can chose any characteristics thus make his own individual product (material, size, color etc.)
2WEB SEARCH CONVENIENCE Capability to search and sort goods by any index: by type, size, color, style etc. 3SMALL SPACE SOLUTIONS Separate website section – consolidation of all the solution for small apartments4INCREASING OF RELEVANT PRODUCT MIXAdding to product range new related products: household goods, garden furniture etc. 5
Source: analysis by CSR Enter
73
Revenue– $519 mln 2012 *
Capitalization – not quoted By the end of 2012 *
Number of countries – 7 Number of stores – 1 219 Number of employees –2 500 By the end of 2012 * Specialization: Beds, matrasses
Revenue Structure:
q In 2012 online sales came to 5% of the company revenue
q By the end of 2012 gross profit margin came to 56%
q The company website entered top-100 of the most convenient for customers in Holland in 2012
q % of just-in-time deliveries came to 95% in 2012 in Holland
* 52 weeks within the year ended 31.12. Sources: the company official website www.beterbedholding.com, Internetretailer.com,
Bloomberg.com, analysis by CSR Enter
Online Offline
WORLDWIDE BEST-PRACTICES BETER BED
5%
95%
469 473 490 519 519
41 43 49 50 31
8.7% 9.0% 10.0% 9.6%
6.0%
-3,0%
-1,0%
1,0%
3,0%
5,0%
7,0%
9,0%
11,0%
-
200
400
600
800
1 000
1 200
2008 2009 2010 2011 2012
Revenue, mln USD Operational profit, mln USD Operational profit margin, %
МЫ ДАРИМ ВРЕМЯ ДЛЯ НАСТОЯЩЕГО.ЧЕСТНО. С ЛЮБОВЬЮ. КАК ДЛЯ СЕБЯ.
Electronic publication by Enter.ru «Worldwide and Russian Retail 2009-2016. Making conclusions, building plans».
Editorial office: 11/10 Ordjonikidze street. Managing editor: Kolotenko Andrei Vladimirovich.
Authors: Center of Strategic Research of Enter. Release date: 11.06.2013.
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This research was conducted by CSR Enter team: Timur Gabdrahimov, Igor Kulyukhin, Zhanna Bogdashina, Pavel Bulankin, Dmitry Pozdnyakov, Danila Okishev, Andrei Karalin, Petr Yakovlev, Mark Khlynov.
We also thank our experts, Ofelia Samedova, Anton Terentyev, and our partner of this research — «Lucas-zoloto» company.