Chinese help with repairs

Photo: Reuters

The Tmall trading site, entering the Alibaba Group, launches the sale of goods for home and repair (DIY) from a Russian warehouse. Thus, the marketplace will compete with Leroy Merlin, Petrovich, OBI and Castorama. DIY-segment in the Russian Internet trading market grew by 40%, to 95 billion rubles. But this is a specific market, which will require significant investment in the construction of logistics facilities, experts warn.

Marketplace Tmall, specializing in the sale of international brands from a Russian warehouse, launches the sale of DIY products, told Kommersant to Alibaba Group. Since April 26, the buyers of the site will have an assortment of 250 commodity names with expansion plans up to 4 thousand within six months. The first partners of Tmall in this market in Russia will be such brands as Robert Bosch, Gardena, Makita, Metabo. A new assortment can be ordered for delivery throughout Russia, including PickPoint outlets.

According to its own data, now the range of Tmall has more than 25 thousand product names in five main categories: electronics, clothing, children’s products, FMCG and baby food. The average check for the first quarter of 2018 is about 6 thousand rubles. Data on attendance and the number of orders in Tmall are not disclosed.

On another site Alibaba – AliExpress, which sells goods from China, – DIY-category is among the top 10 in popularity, says a company representative. According to him, buyers from Russia traditionally order goods for home decor and small tools. In general, the turnover of the Russian DIY market in 2017 amounted to 1.4 trillion rubles, an increase of 1.8%, estimated earlier by the agency Infoline-Analytics. But since 2015, sales of such products have been steadily declining. At the same time, according to the estimates of the Association of Internet Trade Companies (ACIT), e-commerce DIY segment, on the contrary, is the most growing: in 2017, more than 8 million online orders worth more than 95 billion rubles were committed. (an increase of 40%).

The entry of such a player as Tmall into this market is “a challenge to the whole sector,” believes AKIT President and 220 Volt Managing Partner Alexei Fedorov. He believes that this will lead to the withdrawal from the market of small online stores and the desire of large retailers to strengthen their positions primarily by speeding up delivery and improving the competencies of consultants. “Trade in this sector has a number of significant challenges. Most of the buyers are professionals, that is, in a sense, it is b2b, – Mr. Fedorov argues. – Another part of consumers is faced with similar purchases every few years, during this time the technologies are changing, and for the selection they need expert advice. For example, more than 45% are asking for advice when buying DIY-products, and less than 8% for household appliances and electronics. “

The race for a buyer in the DIY market will be won by someone who can ensure the availability of goods, competent advice and high speed of delivery, said Alexei Fedorov. In his opinion, Tmall may face difficulties in this area. So, the “220 volts” has five large distribution centers in Russia and warehouses in large cities. To increase this capacity, the new player will take at least three years, even with very significant investment, I am confident Mr. Fedorov.

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