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Russian meat giant to move into online sales

By Vladislav Vorotnikov , 18-Nov-2016

Analysts claim the store could be Russia's third-largest food and drink e-commerce site
Analysts claim the store could be Russia's third-largest food and drink e-commerce site

One of Russia’s largest meat producers is preparing to launch a new web store selling meat products online.

Miratorg has recently advertised for an e-commerce department director to launch the new site, with prospective candidates requiring experience of working in web stores with a turnover of more than 1,000 orders per day.

The company would not comment on the initiative, but industry experts said the move would make Miratorg the first Russian meat company to have an e-commerce department.

According to Alexey Fedorov, head of the Association of Internet Trade Companies, the new web store would likely be used to encourage customers to visit Miratorg shops on the ground. The initial geographical coverage of the web store would probably be limited to areas with the maximum concentration of Miratorg stores, he added. At the moment, Miratorg has a well-developed network of 40 meat outlets in Moscow and the Moscow Oblast region.

New retail conception

Miratorg launched its retail project in 2010 with plans to open nearly 500 meat shops across central regions of Russia. The overall value of the investment program was RUB10 billion (US$300m).

At the beginning of 2014, Miratorg opened 90 stores, but many struggled to turn a profit so the investment programme was cancelled and the company had closed 52 outlets by January 2016.

According to Andrey Karpov, head of the Association of Retail Trade Companies, the closing of outlets would have cost a significant amount, with each store likely to have cost around US$50,000-US$100,000.

One of the major problems was that Miratorg focused on large outlets of more than 1,000sq m, said Karpov, who added that smaller stores were more attractive with less investment required.

It seems that Miratorg now holds a similar opinion, opening 10 new outlets in 2016, primarily in Moscow Oblast, most of which were below 300sq m in size. The company now has 48 stores in total.

Sales going online

According to Russian analytical agencies, if Miratorg succeeds in the project, it would be the third-largest web store for food products in Russia.

According to information from research agency Data Insight, the biggest online food retailer is Utkonos with 8,000-9,000 orders per day, while second place is occupied by Okay Retail Network, which accounts for about 1,000 orders per day.

Online retail is growing in Russia as purchasing power drops and customers use the web to find the best deals. Large retail chains that have launched web stores in recent years include Magnit, X5 Retail Group and Euroopt.

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