Russia wants to prove it’s worthy of attention and it got some as far as the news go. CNBC informed that the Russian analogy of Amazon.com, Inc. (NASDAQ:AMZN), called Ulmart, could be a lot faster and cheaper than the American counterpart. Dmitry Kostygin, chairman of the board at Russian online retailer Ulmart, said that their gross margin is 5% to 10% less than that of Amazon.com, Inc. (NASDAQ:AMZN)’s and his company takes less than 2 days to deliver a given product.
“Well, we are way faster that our product is today or tomorrow morning including holidays and weekends. So, Amazon would generally take 2 to 5 days. We are much more reliable especially during the winter season, which is the highest retail sales and quite snowy in Russia. And also we are significantly cheaper,” said Dmitry Kostygin.
It seems like a 146% spurious declaration from Ulmart’s official, but it could be a real thing. First of all, the Russian retailer is operating only within the borders of the giant country, with most attention devoted to the European part, where some 95% of the consumers are located. Thus, the carriers do not have to travel inhumane distances to get a product on time. Then, the company tries to focus mostly on domestic products or establish contracts with the biggest firms outside, like Apple Inc. (NASDAQ:AAPL) for its iPhones.
Also, unlike Amazon.com, Inc. (NASDAQ:AMZN)’s fulfillment centers that are located in few key areas throughout North America based on price and convenience, Ulmart is concentrating on many urban and suburban regions. They have about 20 storage centers housing a range of more than 35,000 products and this works fine as the products’ list is relatively short compared to Amazon.com, Inc. (NASDAQ:AMZN)’s 200 million and something.
It’s an ambitious project brought to life by the Russians, but it is likely to face difficulties when reaching a larger scale of products and handling international deliveries. Furthermore, their tactics with numerous warehouses might end up being more expensive than they expect. So Amazon.com, Inc. (NASDAQ:AMZN) is not threatened by Ulmart, but at the same time the former is left with very little chances of reaching Russian consumers.
Disclosure: none
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