Building Your Brand in Russia

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Contents

Opportunity

Understanding the Russian consumer

Reaching the Russian consumer

Marketing case studies: KupiVip, ASOS

Recommendations

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Russia is a HUGE market

• Broadband Households: 13.3M (25% households)• Mobile Phone Users: 108M (76% population)

77.5MInternet users

142.5M

Population

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Millennial cities are key to ecommerce growth• Russia’s millennial cities (over 1 million people) will lead ecommerce growth• High concentration of Internet-savvy consumers, with more coming online every

day• Concentrated populations make it cheaper and easier to deliver packages to

consumers.

Mos

cow

St P

eter

sbur

g

Novos

ibirs

k

Yeka

terin

burg

Nizhny

Nov

goro

d

02468

101214

Population (million)

Population (million)

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The time to act is nowEcommerce retail sales are taking off

• Ecommerce accounts for only 2% of country’s overall retail sales B2C

• Ecommerce sales will grow by over 21% in 2013

• Number of digital buyers will expand from 26.2 million in 2013 to 32.7 million in 2016

• Biggest growth potential in millennial cities

• In 2012 Russians spent $700M in cross border sales

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Understanding the Russian consumer

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Consumer behaviorWhat are Russians doing online?

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Consumer behaviorPreferred payment methods

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Russians have an appetite for luxury brandsTop selling brands

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Shoppers Without Borders Borderfree goes to Russia

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We’re listening…Customer feedback

Why can’t we buy UGGS

online

More DVF online

LOVE DKNY!

Need more quality

winter clothing

Want to be asked

whether I want to

shop in English or

Russian

3-4 shipping time frame is

enough

Childrenswear very expensive in Russia – only have Mothercare or high end designer

Regions don’t have great shops. Old season stock

Favorite brands: MJ, Michael Kors, Kate Spade

Read vogue and cosmo online

Starting to use PayPal online

Quick delivery times

Shop help most

important resource

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Reaching the Russian consumer

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Russians prefer local media playersMost visited websites in Russia

• Dominant players in Russia are all homegrown firms

• Yandex controls search engine market

• Social media hugely popular –VK leading social destination

• 78% internet users will access a social network at least once a month

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Yandex at a Glance#1 Search leader in Russia

• 61% market share in Russia

Number 1 search leader

• 44 million unique visitors per month• 44% Russian users homepage

Number 1 Internet destination

• 180k + advertisers• 58% online ad market share

Leading Online Advertising Platform

Largest Russian Internet business

• 40% Russian searches originate on Yandex Market• Yandex number 1 contextual ad placement in Russia• Optimizing SEM strategy on Yandex crucial to growing ecommerce

business• SEM unit costs are lower however conversion rates are also generally

lower

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Media LandscapeMedia split in Russia

51%

14%

4%

16%

14%

1%TV

Internet

Radio

Press

Outdoor

Other

• Fastest growing EU marketing for online media spending

• TV still number 1, but digital has surpassed print in terms of spending

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Media LandscapeRussian magazines sorted by circulation

1. 980K 2. 730KRank Name Circulation

3 Maxim 390,000

4 Psychologies 360,000

5 Hello! 350,000

6 Good Housekeeping 230,000

7 National Geographic 230,000

8 ELLE 220,000

9 Cosmopolitan 200,000

10 Igromania 180,000

11 Men’s Health 160,000

12 Playboy 160,000

13 Vogue 150,000

14 L’Officiel 150,000

15 Elle Girl 140,000

16 XXL 140,000

17 Esquire 125,000

18 Marie Claire 125,000

19 Harper’s Bazaar 120,000

20 Tatler 120,000

21 Forbes 120,000

22 OK! 120,000

23 InStyle 120,000

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Media LandscapeOnline Digital Platforms

• Shopping Forums• Shophelp.ru• Bigshopforum.ru• styleforum.ru• mixshopping.net• Shoppingzone.ru

• Magazines• Vogue.ru• Tatler.ru• Bazaar.ru• Trendspace.ru• Lookatme.ru

• Women’s portals• Woman.ru

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Media LandscapeShophelp.ru - Advertising

• Online shipping community for “shopaholics”. Biggest resource in Russia for shopping.

• Over 1,000,000 unique visitors per month, 10 million page views

• Display opportunities – promote shipping times/security/top brands

Over 8 million page views on display units

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Media LandscapeOnline digital platforms

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Media LandscapePR

Key Bloggers

• Miroslava Duma (owner, Buro)

• Vlasta Gurieva (Sophiegoesaround)

• Alexandra Rukovskaya (shopper)

• Anastasia Maltseva (shopper)• Laura Djaga (Vogue social

editor)• Live Journal blogging network• Buro 247 • Sophiegoesaround

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Marketing Case Study: KupiVip

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The Russian retail landscapeKey players: Domestic and Cross-border

Market Leaders

Cross-border

1. 30% 2. 28% 3. 18%4. 15%5. 5%

1.

2.

3.

4.

5.

6. Rutaobao.com7. Ebaytoday.ru8. Bay.ru9. Asos.com10. DX.com11. Tinydeal.com12. Mango.com13. Yoox.com14. Dealply.com15. Victoriassecret.com

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• One of the first online retailers to emerge in Russia, launched in 2008

• Launched as a member only Russian e-shopping club with daily flash sales

• 5 years later – 8.5 million members, $200 million net revenue with the aim of being a billion – dollar company by 2017

• Opened up Russian consumers to the world of online shopping

About KupiVip

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KupiVip: Marketing StrategyBrand awareness and direct response

Brand awareness

Strong PR presence across Russia

Brand partnerships

Sponsorships

Strategic alliances

Display campaigns

TV advertising

Social Media

Direct response

Extensive SEM presence

Yandex and Google

Mail.ru

Email acquisition – focus on consumer

data

Loyalty/Promotion driven

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KupiVip: Social MediaBrand presence on domestic and international sites

• Largest following on VK.COM• Targeted ads across VK• Content replicated across networks

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KupiVip: Partnerships

Moscow Fashion Week sponsorship

Cross platform magazine collaborations

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KupiVip: Partnerships

Mnogo.ru – Russia’s first bonus program

Loyalty scheme powered by Russia’s coherent bank

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Marketing Case Study: Asos

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• Improve conversion rate with Russian paid search programs with translated landing pages• Educate the consumer on

safety of shopping via (credit card payments)

• Delivery times and security

• Delivery costs• How to shop online• How To Order - Russia

ASOS

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ASOS: Marketing StrategyBuilding brand awareness

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ASOS: Search StrategyBuilding brand awareness

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ASOS: Marketing StrategyFocus on local sites

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Summary of Recommendations4 Quick Wins: Building your brand in Russia

1. Develop a paid search strategy on both Google and Yandex

2. Translate landing pages to optimize conversion rates

3. Focus on brand awareness through local media players

4. Build a social strategy that includes local social media players

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