Farid Abdulganiyev: ‘3,000 Tatarstan online suppliers is critically little’

The survived

Describing the business climate that appeared in the republic under the influence of the pandemic, Tatarstan’s Ombudsman for Entrepreneurs’ Rights, Aide to the president Farid Abdulganiyev claimed that despite the uncertainty and absence of stability, they didn’t have to talk about a mass closure of enterprises. There is some reduction in the number of entrepreneurs, but the scale isn’t large.

As of 10 November this year, Tatarstan has 152,800 SMEs. It is by 3,600 entities or by 2,33% less than a year ago (156,400 entities). The situation across Russia in general is more serious: from November 2019 to November 2020, the number of entities reduced by 3,77%. To compare, the quantity of SMEs in Tatarstan from November 2018 to November 2019 reduced by 0,77% (1,220), in Russia it did by 1,8%.

The speaker paid attention to the fact that the given numbers shouldn’t be interpreted only as an impact of the pandemic.

“I will remind you that self-employed people appeared in late 2019 and 2020 in Tatarstan. Their numbers already exceed 100,000 people. They couldn’t appear from nothing, and obviously, some of them had previously been registered as sole traders. The new taxation regime turned out to be more suitable for them,” Abdulganiyev said. “Another moment: earlier, the Tax Service used to clean the register of entrepreneurs once a year, in August, some time ago, it began doing it monthly. In other words, an enterprise that closed could be considered as operating almost during the year.”

Realnoe Vremya specified if a rating of business activity in Tatarstan districts would be published in 2020 given the current situation.

“The pandemic has anyway made amendments. How to evaluate if entrepreneurship has stalled temporarily in some places? We consciously refused this tool — every district has faced such challenges this year that don’t give us the moral right to assess it. The rating won’t be published this year,” Abdulganiyev replied.

What businesses asked about

We should also remind you that Farid Abdulganiyev occupied the post of Tatarstan’s ombudsman for entrepreneurs’ rights less than a month to the total lockdown and turmoil that followed it. At this meeting with journalists, the ombudsman recalled what challenges his administration had to address to level the suddenly destabilised situation.

“Despite all the difficulty, we managed to create a new style of work with entrepreneurs. The time factor turned out to on the first place. Officially, we have two months to address complaints and appeals, but we couldn’t afford it and decided that a week was the top, just to consider an integrated, inter-agency issue,” Abdulganiyev remembered.

According to the ombudsman, the situation was especially tough during the first month when the number of entrepreneurs’ appeals increased from habitual 4 to 650 a day, while the hot line’s operation left a lot to be desired: it was necessary to quickly change the way it worked, look for Tatar-speaking operators and prepare scripts to answer questions, which, by the way, were stolen by other regions without citing Tatarstan.

“During nine months since the hot lone began working, over 15,200 oral appeals were received, another 1,034 were written. For comparison, the ombudsman received 1,785 appeals from entrepreneurs in 2019,” head of the ombudsman’s reception Filipp Zarubin who participated in the meeting said.

Support measures for businesses are at the top of the appeals. Questions about tax regulation, tax holidays and cancellation of single tax on imputed income rank second, applications for a 2% loan are third as well as rules of the supervision period.

Giants’ investments and KazanExpress’s big project

During this meeting, Farid Abdulganiyev paid special attention to the development of e-commerce in the republic. We should remind you that the first stage of Wildberries’s logistic centre opened in Zelenodolsk industrial park on an area of 50,000 square metres in summer (after the second stage, its area will increase to 100,000 square metres). The first stage of Ozon’s logistic centre on an area of 38,000 square metres will open in the republic by the end of the year. The total amount of investments in the construction of regional distribution centres is over 12,5bn rubles.

Also, KazanExpress company from Tatarstan is going to invest a billion rubles to build the first stage of its fulfilment centre in Zelenodolsk Priority Social and Economic Development Area. The construction will end in August 2021. The company invests around 12bn rubles in the development of several stages of the project through 2024.

“E-commerce is also a new way of sale for local producers. During self-isolation, the number of our sellers in online stores increased ten times: now more than 3,500 Tatarstan residents offer their goods there, while their revenue is over 3,57bn rubles in 9 months 2020,” Abdulganiyev claimed. “It is noteworthy that the amount of our sellers in such a marketplace as eBay has nearly doubled, from 424 to 784. As for AliExpress, it has commodities of 596 Tatarstan suppliers.”

The ombudsman admitted that “3,500 Tatarstan online suppliers is critically little”, this is why the management of the republic began to actively promote Tatarstan products in e-commerce channels. In any case, a taskforce under the Tatarstan president already was created for this purpose.

“According to Yandex.Market analysts’ forecasts, the e-commerce market of Tatarstan in 2020 will grow by 54%, which is more than across Russia in general (45%),” Farid Abdulganiyev shared statistics. “Tatarstan’s Statistics Service makes more optimistic forecasts: goods for 18,9bn rubles were sold online in 2019, commodities for 23,4bn rubles were sold in 10 months 2020. In other words, online sales might ramp up more than 1,5 times this year. If in 2019 e-commerce in Tatarstan accounted for 1,98% of all retail turnover, in 10 months 2020, the number rose to 3,55%.”

“The bonded warehouse will pull suppliers’ resources like a vacuum cleaner”

The ombudsman for entrepreneurs’ rights also talked about a project on the creation of Russia’s first bonded warehouse with simplified customs regulation. It will appear in a subdivision of Russian Post located at Kazan International Airport.

“The last specifications of parameters of the pilot project are made, and documents in different agencies are approved. We expect this stage to end these days. We plan to test one-time deliveries of goods to Kazan by the end of the year to simply track the movement of documents, to understand how this mechanism will run. The bonded warehouse will begin its operation in pilot mode in early 2021,” Farid Abdulganiyev said.

The ombudsman thinks that such warehouses create conditions not only for imports but also exports of ready-to-use products as well as transit or production of products from components that arrived from abroad in the bonded warehouse. The latter are exported, moreover, customs duties aren’t charged.

“iHerb is among those companies that don’t yet operate in Tatarstan but are already interested in the bonded warehouse. If all this starts working, they are ready to make serious investments in the republic’s market,” Abdulganiyev said.

When this warehouse starts operating, in the future the republic can get a “partly Chinese model” both as transit and export. The PRC has 200 bonded warehouses and tens of thousands of e-commerce sites now. The speaker also forecasted this project was able to cover not only the Volga region but also territories of neighbouring regions.

“The bonded warehouse will pull suppliers’ resources from other regions like a vacuum cleaner. Taxes are paid here, jobs are here, the infrastructure is here,” the ombudsman said. “We also have big prospects for cargo — this area isn’t very developed here. Some companies just started flying, but they stopped operating due to restrictions. Our bonded warehouse is, in fact, on the territory of the airport, and here the time factor must play a role and provide an impulse for development.”