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Premium member Presentation Transcript 13th Annual Meeting of The Russian - American Chamber of CommerceThursday, October 20, 2005Denver, ColoradoFrom US to Russia: 13th Annual Meeting of The Russian - American Chamber of Commerce Thursday, October 20, 2005 Denver, Colorado From US to Russia Using the Finnish Business Boulevard and Finland Post Corp. Market review/Russia Markku Mäkitalo Finland Post CorporationAgenda: Agenda Updating 21st of Oct 2004 The mail-order business from US to Russia One-step-shopping consept The Finnish Business Boulevard to Russia What it is! Finland Post Corp. Post’s goal in the Russian market Market review/Russia Why Russia? ConclusionsThis was presented last year:From US to Russia How?The Finnish Business Boulevard Connecting US, Europe and Russia: The Mail-Order Concept from US to Russia This was presented last year: From US to Russia How? The Finnish Business Boulevard Connecting US, Europe and Russia Marketing & Sales Product Delivery & Logistics Financial Services - money transfers Logistics & Marketing MarketingAnd the concept:The Mail-Order Concept from US to RussiaThe Service Process:: Product Delivery (from US to Finland in containers) Printing into the Russian language NEW CUSTOMER DATABASE IN RUSSIA MONEY TRANSFERS And the concept: The Mail-Order Concept from US to Russia The Service Process: Sales Material cataloques manuals after sales DM packages Financial Service money transfers After Sales Digital Network Hansaprint (Finland) Distribution to Russia Consumer packaging manuals after sales addresses invoice Delivery to Russia INVOICE Database DM Target group management Loyalty Customer programs Personalization ORDERSThe Finnish Business Boulevard to Russia Covers:: The Finnish Business Boulevard to Russia Covers: The Baltic Sea route between Central European and Finnish ports The south coast area of Finland The Finnish/EU – Russian border is the most advanced Russian border Services in Russia part of business boulevard Finland has the leading role in order to develope the cooperation between Russia and EU1. Services on the Baltic Sea Route: 1. Services on the Baltic Sea Route Do you need fast and reliable route for your goods? The Finnish Baltic Sea ports have fast, regular and reliable connections with Central Europe The ports are located just a few hours away from the border stations between the EU and Russia 2. Services in South Coast Area of Finland: 2. Services in South Coast Area of Finland Do you insist on fast handling, safe warehousing, just-on-time deliveries or perhaps new business establishments? The Finnish Baltic Sea ports have an excellent road and rail connection to Russia and CIS as well as modern fascilities for lolo, roro, container and liquid vessels Bonded warehouse fascilities close to the Russian border Efficient transport system and infrastructure, advanced systems of logistics and telematics support the whole value-added chain 7 border crossing points between Finland and Russia of which 4 open for railway Rail systems in Finland and Russia share the same gauge, thus making 24 daily railway connections smooth The Trans Siberian Railway connection enables fast and reliable transportation between the Far East and EU Excellent flight-connections to Moscow, St. Petersburgh, Tallin, Riga and Vilnius With decades of Russian trade experience Finnish trading, transport and logistics companies have developed broad service supply for international firms Modern infrastructure for new business establishments3. The Finnish/EU – Russian Border is the Most Advanced Russian Border: 3. The Finnish/EU – Russian Border is the Most Advanced Russian Border Intensive development work is going on in order to make the border crossing to fit highest reqirements Border crossing process Information management on the railways Information management at sea Logistical service networks Transport Corridor4. Services in Russia Part of Business Boulevard: 4. Services in Russia Part of Business Boulevard Are you exporting, investing or expanding your current business in Russia? Finnish companies operating in Russia are able to support you in daily Business! We can provide you with: Logistics services for your products from warehouses in Finland just-on-time to Russia Construction and project management Business support services including banking and financing market research insurance legal matters executive search and human resources consulting and design trade mark and inspection services business travel fast material supply from Finland mail-order and many others The Russian part of the business boulevard covers the region between the EU/Russian border and Moscow. This part of the Russian business boulevard is especially interesting!Marketing, Delivery, Logistics, Warehousing…Finland Post’s Goal in the Russian Market: Marketing, Delivery, Logistics, Warehousing… Finland Post’s Goal in the Russian Market To develop into a local company providing top quality services To construct physical logistics services for the customer base in Moscow and St. Petersburg during the first stage To cover all of Russia in the long term with the help of subcontracting and partnership networks To provide other service packages too, such as distance selling services from direct marketing to delivery of orders To have Finland Post’s services, from warehousing to delivery, facilitate the construction of a comprehensive logistics chain in RussiaSlide11: When a company is planning to do business in the Russian market, a possibility for minimising risks is to turn to a partner which already masters transport and transit traffic and has sound local knowledge of how to manage delivery, logistics and marketing in Russia. Finland Post’s subsidiaries and terminals are in your use in Russia Marketing, Delivery, Logistics, Warehousing…We are Global and we are already in Russia …Global, Real-Time Solution for Spare Parts Logistics...: We are Global and we are already in Russia … Global, Real-Time Solution for Spare Parts Logistics... We are Global andWe are already in Russia …Case: Consumer Electronics to Russia: We are Global and We are already in Russia … Case: Consumer Electronics to Russia Kotka Moscow - sorting/pick-up - targeted deliveries - central warehouse - Web-storage shops intermediate storage direct deliveries 1,500–2,000 items Goods volume approx. 200,000 m3/year Storage capacity: approx. 10,000 m2 15–20 unloaded/loaded containers each weekday Growth in annual volume 30–40% Customer sales contracts NEW deliveries Producers around the worldMarket review/Russia: Market review/Russia Russia is … Big And that makes things complex for distribution and for media Poor But getting richer. Still average incomes are low Moscow Moscow is the center of the country, but the reagions are slowly catching up Spending After years of uncertainty, Russians are finally starting to consume Difficult The sheer size and fragmentation of the country makes business difficult and limits accountability The estimation of the Russian consumer market US$ 240 billionHuge demand is still growing: Huge demand is still growing 145 million people 25 million of middle class 74 million population of well-educated working people Important The Russians are eager to emulate Western city-styles and Russia offers one of the few solvable national markets where you can still be the first in your sector Some Examples …E-commerce: Some Examples … E-commerce Internet penetration in Russia 17 million users nationwide 15% of population 3.3 million users in Moscow 40% of population 200.000 domain names registered E-commerce US$ 300 million Market growth est. 100% per yearSome Examples …It’s a TV Country : Some Examples … It’s a TV Country TV takes a big slice TV takes up the biggest chunk of total Russian adspending. Interestingly, OOH takes almost 20%. The only country with anything close to such a high outdoor share is Japan at around 10%!The Media Market Size: The Media Market Size 2004, Million US$ News 250 Mags 470 TV 1700 Radio 200 Cinema 15 OOH 710 Internet 30 DM 500 Total 3875Up, up and away: Up, up and away Post crisis Russia has seen double digit growth year on year. Media market Net Adspend (source: AKAR)Russian Media is …: Russian Media is … Growing One of the fastest growing markets in the world, and just when you thought it couldn’t get bigger Inflation Demand is so high that costs are continually increasing at double digits TV TV is the media, covering the whole of Russia at a cost that is still extremely cheap Monopoly One supplier accounts for 70% of available inventory and sets the market Mass Non-TV media is underdeveloped and even TV offers little targeting opportunity, but is great for reasching mass audiances DM Direct Marketing is the future weapon!DM is the Future Weapon Already Because For Example:: DM is the Future Weapon Already Because For Example: In the Russian mail-order business sales channels are: Traditional catalogues 91% Internet 6% TV etc. 3% and DM-ad grows 50-55% per yearRussian DM expenditure: Russian DM expenditureMail-Order Market Growth Dynamic: Mail-Order Market Growth DynamicAnd You Can Find New Customers: And You Can Find New Customers An example from PPE-Group/Moscow Why Russia?: Why Russia? It’s the biggest new international market where consumers have positive attitude towards Western products. They want to adapt Western life-style This means also faster entrance to the Russian market Lower costs vs. local presence Exit barriers – there aren’t any serious problemsGDP Dynamics Look Good …: GDP Dynamics Look Good … Annual growth 2004 – 6,4% 2005 – 5,9% 2006 – 6,0% 2007 – 6,1% Although by no means an easy country, Russia is one of the few countires that combines a huge consumer potential with a cheap mass media. Slide27: Markku Mäkitalo R & D Director Finland Post Corporation P.O. Box 7 FIN – 00011 POSTI FINLAND Tel. +358 20 451 5650 Mobile +358 400 520 463 Fax. +358 20 451 4779 firstname.lastname@example.org http://www.posti.fi Contact information You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.