Ozon, Wildberries and Yandex.Market to boost labour market in Tatarstan
The logistics hub: largest online retailers have their eye on Zelenodolsk
The share of e-commerce in Tatarstan is half a per cent less than the average in Russia. But already next year the republic can surpass the country because as much as two logistics centres of large online retailers Ozon and Wildberries are going to open here at once. The first stage of Ozon distribution hub is 38,000 square metres in the industrial park Zelenodolsk and will cost the company more than a billion rubles. As it became known to Realnoe Vremya, the key factor in the choice of Tatarstan for location is not only a good location but also the support of the regional government in the issue of personnel training. The real battle will probably unfold for them in Zelenodolsk.
Ozon to make infrastructure worth a billion
Ozon logistics centre opens in Zelenodolsk district in the middle of 2020. The parameters of the project, the agreement on the implementation of which the republic and the Internet retailer signed on the sidelines of SPIEF 2019, provide for 38,000 square metres of storage space in the first stage. At the same time, it is possible to expand the site to almost 60,000 squares. The investments will amount to more than 1 billion rubles.
The launch of the centre takes place in mid-2020. Ozon is going to store and process there almost a million product names for buyers within a radius of not more than a thousand kilometres. Delivery is carried out by courier or through the nearest to the buyer parcel automats. By the way, in the framework of the agreement with the retailer, Tatarstan's government has pledged to assist in the installation of 100 parcel automats in the multifunctional centres and 50 — in municipal enterprises.
According to the vice-president for logistics at Ozon, Andrey Pavlovich, the share of parcel automats in Kazan in the delivery of the company amounted to 23%. Thanks to the development of infrastructure, this year the share of customers, making 15 or more orders a year at the retailer, has increased by 20%. However, the average resident of Tatarstan made online purchases for only 500 rubles over 8 months of this year. At the same time, the features of e-commerce in the republic are hyper-concentration in the capital, underdeveloped infrastructure, high requirements of buyers to the speed of delivery and the weak positions of international players.
Another interesting detail: the turnover of Ozon in Tatarstan is 1,8 times higher than in Bashkiria. However, sales growth here has amounted to 111% this year, and but in the neighbouring republic in the Urals — 154%. The company notes that the reason is in the low base, as Bashkortostan began active development of e-commerce later.
“The largest players of e-commerce market believed us”
The share of the online segment in the total turnover of retail trade in Tatarstan is 1,3%, while on average in Russia this figure is unexpectedly higher — 1,7%. According to Minister of Economy of Tatarstan Farid Abdulganiev, the republic should catch up and overtake the country level by realizing the potential. “We should surpass the Russian indicator — we should create conditions for this. This is the function of the executive bodies of the state power,” he said.
“By 2024, the e-commerce market is going to grow by 2,5 times. It is a crazy growth, this is the driver and engine of growth that we simply cannot miss. And where is Tatarstan? Can there be such picture in the region where everything is created for development? Eighty-eight per cent of the territory of Tatarstan is provided with 4G networks, and if we take 2G and 3G — 97 per cent of the population is covered. As one of the pilot regions, we have 5G system in two zones, the next stage is iOT — now there is no need to implement this tool, but, of course, we are making the first successful steps,” the minister assured.
The quality of roads is also at a good level and continues to develop, now it's up to the largest operators of e-commerce. “The largest market players believed us. We are open,” Abdulganiev stressed.
According to him, there are already no more areas for everyone to open their logistics centres in the industrial park Zelenodolsk. “WildBerries, Yandex.Market are also on this site. There are also companies that are considering Tatarstan for opening their centres there. There are no more areas in Zelenodolsk,” the minister said, adding that at the instruction of the president of the republic the number of industrial sites is to be increased to 100 (today there operate 91 sites).
“The residents of the industrial sites receive special attention, but there is no narrow support, for example, of logistics or e-commerce as such today,” admitted Farid Abdulganiev. “This is a new challenge for us, we were partly ready for it, but we still have to sharpen this tool to support e-commerce, including with leading players.”
Wildberries and Yandex.Market following Ozon
In 2020, the PSEDA in Zelenodolsk opens as much as two logistics complexes of Russian “titans” of e-commerce: in addition to OZON, Wildberries has long stated about its plans to enter the region. According to Development Director of Wildberries, Vyacheslav Ivashchenko, the logistics hub of the company, the launch of the first stage of which is expected in the second half of 2020, is going to occupy an area of 100,000 square metres, and investments — to “amount to billions”. He refused to name a specific amount but said that the company expects to offset the construction costs within ten years.
Besides, Yandex.Market also has an eye on Tatarstan. It gathered under its brand not only the platform of the same name but also Beru online store (together with Sberbank). We know neither the timing of the construction of the Yandex.Market warehouse in the republic nor its exact area.
On September 24, the ministry of economy of Tatarstan gathered the representatives of all three players at an open meeting of the discussion club in the showroom of the Higher School of Journalism and Media Communications of the Kazan Federal University. The key item on the agenda was the question: what can the big business give to the republic in exchange for all the preferences? Among the advantages for the region, the participants of the discussion named the abolition of the “logistics crutch” for entrepreneurs of Tatarstan, who up to this point had had to deliver their products to online stores through Moscow, as well as a significant reduction in the time of delivery of goods for ordinary buyers throughout the Volga Region. But the main argument was the creation of jobs.
Competition for personnel will happen: 7,000 job offers for three people
Ozon logistics hub is going to give the republic about 2,000 new jobs, both inside the hub (about 500 jobs) and in related areas: main logistics, management, last-mile delivery. The warehouse of Yandex.Market in Tatarstan will soon give the republic up to five hundred jobs, assured the head of the B2B platform at Yandex.Market Group Ilya Nikanorov. Although Wildberries still is going to become the record breaker in this “race”.
“The complex will provide approximately 5,000 jobs — administrative staff (warehouse management, department management), working staff — loaders, pickers, assembly workers. Naturally, it will be drivers because part of the vehicle fleet will be transferred to carry out logistics already directly on a place,” Vyacheslav Ivashchenko explained.
Farid Abdulganiev noted that Tatarstan has gained good experience in personnel training.
“There are 37 resource centres in the republic, there is an order for specialists of working professions. We are going to intensify this work,” said the minister of economy of the Republic of Tatarstan.
In just a few years, three major logistics centres of the giants of Russian e-commerce are launching near Kazan, which together will give at least 7,000 jobs. According to experts, the struggle for narrowly focused and qualified specialists is going to be serious, especially in the field of warehouse and transport logistics.
“It is clear that when a team is formed, we are ready to pay more. Then we will definitely be in the market by salaries,” the representative of Ozon told the correspondent of Realnoe Vremya. “People, resources and competencies are an important component in business. Creating the competence of a logistics specialist in the republic, the course on the development of youth is a very important factor in choosing Tatarstan for locating the logistics centre. IT and logistics competencies are the factors that will be in demand by the market. Probably, there will be a competition for specialists. Competition is good.”
Wildberries is targeting the self-employed, and Yandex.Market is waiting for creators
Can the opening of the logistics hubs of Russian e-commerce giants seriously affect the work of Tatarstan producers of small and medium-sized businesses? Definitely yes, transformations in the market are inevitable, stated Farid Abdulganiev. Within a very short period after the launch of the centres, Tatarstan manufacturers will “expand the window of opportunities” for a while — it will become easier and cheaper for them to deliver their products to federal sellers. However, for their part, they will have to put a lot of effort to “pack” their goods and establish the necessary volumes of deliveries.
Wildberries today has 16,000 suppliers, nine of them — from among SMEs, 6,000 of which — goods made in Russia. In mid-September, the company launched the work with the self-employed, and, according to Ivashchenko, is ready to actively cooperate with Tatarstan business. Ozon is working with 15,000 sellers, and the “majority” — Russian companies, explained Andrey Pavlovich. Russian goods are about 15-20% in the range of Ozon.
Beru marker place of Yandex.Market concentrates so far only about 3,000 sellers with a predominance of goods of foreign production. It is automation technology, trading platforms in the Network, should serve as a lever for local businesses to create competitive products, removing non-core load from it, said the representative of the company, Ilya Nikanorov.
“SMEs have a huge number of headaches — they cannot deal with logistics, they cannot create their own website, they should not deal with storage. The giants will quietly do that for them. And they should focus on creating a competitive product. If we can make it more effective and cheaper, the answer arises by itself,” Nikanorov finished the discussion.
Elena Stryukova Plenipotentiary of Russian Guild of Managers and Developers in Tatarstan
We faced a similar situation when, for example, in Samara, large federal companies — MegaFon and MTS — opened call centres. Indeed, in one city there was an unhealthy migration of employees taking place from one company to another, the value of such an employee increased greatly.
At the time, we carried out the following work for an insurance company: we looked in several cities for premises for call centres and hired a separate company for personnel to study how much it would cost an ordinary employee of a call centre. Then we came to the conclusion that in those cities where there are more than two or three federal call centres, the salary of employees is much higher.
When the demand for people increases, the rate on their working time also increases. In general, the entrance of two or more large companies is rather a blessing for Zelenodolsk, a large part of whose residents go to work in Kazan.
Rustem Shayakhmetov Economist, Candidate of Economy
The demand for labour increases wages. In the end, strictly speaking, the opening of logistics complexes will affect your salary because it is “average in the country”. If their wages increase, then in the surrounding areas it also increases, otherwise they just entice people away. Therefore, this is good news, but we should take into account that our labour resource is limited, and it is decreasing. But here, I think, because of migration processes, this issue will be resolved — if there is a well-paid job, people will come, especially Zelenodolsk is close to Kazan, a good area.”
In the end, there is a demand, our people are mobile. Whether it will be internal Russian migrants or they come from the CIS countries — this is the minor question, but the holy place is never empty. This will ultimately have a positive impact on the development of the republic itself because the people who will come — they will stay, they will have children who will develop the republic. The GRP will grow due to this. If the population in Zelenodolsk increases, this is also not bad, the construction there will increase. It is a quite favourable area — as far as I remember, there are no harmful environmental industries there. Near the Volga River — just wonderful!
Ravil Akhtyamov Digital economist, a member of TGR of Skolkovo competence centre
What functions are these specialists of these retailers going to perform? Obviously, the work is related to warehouse operations, quite simple. To recruit people from several tens of thousands of able-bodied population (165,000 people — the total number) of the Zelenodolsk district — I think both companies will easily “digest” the declared volume, especially given the not very prosperous situation on the labour market. It all depends on what conditions they offer to potential employees. Even if large retailers “digest” the employment, they can attract people from any area.