Already employing 2,200 people in Russia, Ozon shows astonishing growth year over year. The company recently raised fresh round of funding – $150 million to further invest into logistics and assortment.
In this interview Maëlle talks about Russian e-commerce landscape and tells us what drives the Russian e-commerce empire.
How come you started to work with e-commerce in Russia?
I used to be an entrepreneur; my first business was a startup, which I created myself. Then I joined an American consultancy company called the Boston Consulting Group. One of my last clients in Russia was Ozon.
I was hired in 2010 and I became CEO in 2011. During the first year I was the marketing director and there were two other candidates at the same time for the CEO position.
That’s how I became CEO of Ozon. I got there with a lot of work and a lot of luck.
Can you describe your first year working at Ozon?
It was very different coming from the consultancy world into the “real world”. It was very exiting for me since it was like going back to being an entrepreneur. It was going back to seeing the immediate impact of what you want to do.
When you are a consultant you have a lot of impact but it’s a much more long-term impact and it’s a impact that very much depends on whether the management team is going to be alright with your recommendations and feel motivated enough to implement them. When you are the management team you have a lot more possibility to act and implement your thinking, but at the same time you also have a lot more possibility to screw up. Which is much more stressful then I thought it would be.
How does Ozon handle to do marketing for such a big range of products?
We have a great team. What we have done together in the last four years is to structure the work so each business has each own team with one general manager, financial director, marketing director and operation director. We try to create an eco system where each business is complementary and they work together. There are synergies but these are to be beneficial to the growth and to the identity.
We have a lot of entrepreneurship in each company, which is very important when you run an Internet company.
How important is SEO for your business?
For b2c businesses SEO is very important. We do have dedicated teams in each business and we also have partners who help us to improve SEO results.
In Russia, there are two search engines you have to optimize for and that sometimes complicate the work. In the end of the day you should optimize for your customer and not for the search engine. In theory if you do your job properly you should be ranking in both search engines. But in reality if you want to get rankings in both you need to proactively think about the rules set by each search engine. You need to organize your pages and your content etcetera. I believe that is the biggest SEO challenge in Russia to optimize the pages for both.
Can you give some tips what international companies should do in order to enter the Russian market?
They should go local with a local team. You should also localize your product and make an effort in understanding what the Russian consumers are looking for. You should not assume that the Russian consumers will behave the same way as the western consumers do.
The companies should not think that they are able to manage the market from the west coast or London. Its nothing amazing but it feels like a lot of western companies do not recognize Russia as a very separate market that you really need to have local team focusing on.
But the companies should also not give up since it might be difficult but in the end it’s definitely worth it.
Lets talk some about the Russian payment options. They are sometimes seen as a problem for foreign companies. How do you work with them?
We have adapted the approach that if the payment solution is popular for the consumers we integrate them into the system. As of today I believe we have 19 different payment solutions.
For a business as ours we still do the vast majority of the transactions in cash so the types of payment systems does not matter that much. Even for a business like Ozon travel we do around 85 % of the payments with cards.
Since you have such a big market share in Russia, are you not thinking about creating your own payment solution?
It is just a very natural expansion of your business when do e-commerce and more and more of the costumers are using the platform as their main source for shopping. Based on that you are going to see a lot of their transactions and naturally the next question is why am I paying some big fees to some payment systems. I could as well have this payment system in-house and not pay these fees and on top of that I would accumulate even more data about my costumers. A lot of the value of the e-commerce company is actually the data you collect about your customers.
How important is mobile for Ozon today and how do you see it moving forward?
The Russian market is very similar to the markets in west but the Russian market adopt the technology a bit later but when it is happening it usually goes very quickly.
Are you expanding your business abroad from Russia, if so to which markets?
We are a Russian based business; we have Russian employees and consumers. We have extended into countries that have a Russian speaking community. We are in Kazakhstan and we opened up in Israel a few weeks ago. The idea is however not to create an international player we will continue to focus on being a Russian e-commerce for Russian people.
What are the biggest challenges for your business moving forward?
I believe that the biggest challenges for our business has to do with human resources. We need to make sure that we hire the right people and that we help them to continue to be the right person. There is nobody that is perfect from day one to the final day. Being the perfect employee requires constant learning. It’s not only about hiring but also to help people to grow. It is usually not a question about salary. The vast majority of the people are working for the idea and the environment and the people who manage them. For us the key challenge is how to make sure that employees are engaged, motivated and capable of doing the work they have to do. In a fast growing company its really key and at the same time very hard.
Right now we have around 2,200 employees. But we keep on growing quite fast. We have a great management team and I think that people realize how important it is to attract the right talent and keep them and the management team including myself is spending a lot of time on it.
What is most important is that you need to make sure your people are so engaged and motivated because they believe that this is their company and they will figure out how to do it.