Modnique a global fashion e-commerce company entered Russian Digital Space.

1. Modnique: Californian E-Commerce
company enters Russian Digital Space
Modnique CEO and co-founder Einaras von
Gravrock
E-Commerce is one of the most growing digital
markets worldwide. Everyday millions of
consumers are searching for diverse goods online.
Especially fashion industry reaps the benefits of
online shopping as far as clothes, bags and shoes
are besides diamonds a girl’s best friend. Today,
during the Christmas time, when people are
getting crazy about the holiday shopping, I am
talking with Einaras von Gravrock, the CEO of
Modnique. Modnique is a global fashion retailer,
based in California, a pioneer among Western
brands, who entered the Russian digital space
and is getting popular day by day. So let’s find
out what is Modnique’s secret for success in
Eastern European region.
1. Please tell some words about Modnique and what is the USP of the company?
Modnique is a global fashion e-commerce company headquartered in Redondo Beach,
California and launched in April of 2011. We specialize in sourcing designer brands from
around the world and offer our customers discounts of up to 85% off retail. Since day 1 we
have been shipping internationally and we now ship to over 150 countries. The majority
of our sales come from outside the U.S. and we primarily target stylish,
contemporary women from all over the world.
We have invested in relationships with logistics providers and our value proposition to
international customers is that we have identified the best (most efficient and cost-effective)
ways to ship to each country outside the U.S. Because of this, we particularly appeal to
customers in regions such as Russia, Eastern Europe, Middle East, which are typically underserved from an e-commerce perspective. Our value proposition to all customers is that we
source both well-known designers and regional brands which are difficult to find or unknown
outside of their local region. So for instance, our customers in the U.S. have the opportunity
to discover regionally recognized brands from Spain that haven’t yet penetrated the U.S.
market.

2. 2. When and why did you decide to enter the Russian market?
Modnique has been an international company since its launch. In early 2013 we noticed that
Russia was one of our fastest growing customer segments and we decided to localize the
shopping experience for them by including regional style preferences, full Russian language
capabilities, Russian customer support in local time zones and local payment methods. Since
day one, we have been shipping to anywhere in the world, so the fact that we offered the
ability to ship to Russia and Ukraine was very compelling and led to an almost viral
communication of our brand in those countries. Additionally, the designers we source appeal
to the international customer and our prices are more competitive than those offered by local
eCommerce companies, so there was a natural draw. As a result, we’ve grown
exponentionally with relatively little marketing to date. Our localization efforts include
dedicated marketing teams and campaigns.
Modnique Russia
3. Some foreign companies are not sure about the expansion in the Russian market
because of local market conditions, geographical, mental differences and immaturity of
the e-commerce infrastructure. Did you have any doubts before making such an
important decision?
We didn’t have any doubts because we had already been serving Russian customers with our
existing (non-localized) processes and services. This gave us insight into which parts of the
process needed to be localized, e.g. shipping and payment methods.
One of our initial steps was to ensure we establish dedicated logistics payments, returns and
supply chain. As part of our recent localization in Russia, we partnered up with leading local
partners such as SPSR Express. We benefit from their experience in the local market and are
able to offer a service that is equivalent to local competitors. We’re always looking for ways
to improve service and logistics and see these areas of business as an opportunity rather than a
problem. Given our scale and resources, we’re able to command partnerships and invest in
solutions that are otherwise not available for another company, which presents a competitive
advantage.

3. 4. Do you have a local team in Russia, which takes care about the Business Development
activities?
All Russian activities are being managed by Andrey Shapovalov, our Russian Country
manager who is based in Moscow and comes with significant eCommerce experience in the
region. His team is managing our operations, marketing, communications, and social media
for the country.
5. What are the strengths of Modnique in comparison to the Russian big players
like Lamoda.ru, Trends Brands and Wildberries, which can attract the potential
customers and ensure the future retention?
We find that our approach to connecting brands and customers from around the world on one
single platform brings a unique and rich experience. When you’re shopping on Modnique,
you’re discovering brands from Spain, Italy, Canada, and France that you may not have
known about before. We recreate the experience of traveling abroad and picking up a
handbag or sweater that will always remind you of that trip.
Functionally, our strengths include:
1. Over a decade of international e-commerce experience
2. Relationships with vendors and access to inventory from around the world at attractive
discount and the ablity to sell merchandise at a lower price point than local
competitors due to our scale and the efficiency of our platform
3. Our international recognition as a trusted retailer due to our authenticity standards,
return policies, and focus on the customer.
6. What kind of payment methods and shipping possibilities are available for your
customers in Russia?
We accept local payment methods including Qiwi, Webmoney, Yandex.Money in addition to
major credit cards and PayPal. We also provide customer service in Russian in relevant time
zones and will assist in customs and duties paperwork. In addition to offering free shipping on
orders over $99 for a limited time, SPSR Express, a contracted courier service, will expedite
deliveries throughout Russia. We’re always looking for ways to improve service and logistics
and see these areas of business as an opportunity rather than a problem.
7. Let’s talk about marketing. How do you reach your target audience? Is it more about
the classic media like TV and print or do you focus on online marketing. How does
actually your marketing mix looklike and who is responsible for its implementation in
Russia?
Our marketing mix is different in Russia than it is in, say, the U.S. We are focusing
proportionally more on classic media like print and eventually TV. We’re monitoring how
Russian consumers react/interact differently to channels such as paid search and social
media. For instance, we see much higher engagement rates on social media from our Russian
consumers.
Russian Country manager, Andrey Shapovalo’s team will be managing our marketing,
communications, social media, and operations for the country. We are currently posting
Russian localized posts on our Facebook page.

4. Having local expertise has contributed to our success in this area. In addition to
hiring Andrey Shapovalov, we’ve also hired marketers, designers, describers and copywriters
who are familiar with eCommerce in Russian. When approaching this market, we call
attention to different benefits based on what is most valuable to them. For example, we
emphasize authenticity standards on luxury items and differentiate ourselve by caling out that
we are an American company and can be trusted based on our experience. International
business experience is very important to Russian customers of products and services.
8. Do you plan to expand in any other Eastern European country, e.g. Ukraine, Poland
or Czech Republic?
We plan on rolling out several more localized versions of our site throughout 2014 based on
our other growing customer segments. We plan to be everywhere in next 3 years; focusing on
Eastern Europe in the immediate future and creating personalized experiences for customers
in our 150 countries. Currently we’re actively testing 10 different regions and working hard
to identify logistics partners, brand partners and hiring people in Europe, Americas and Asia.
9. What three tips would you give to other Western companies, who are planning to
enter the Russian market and want to become successful with their products?
1. Get the right team in place. Hire and establish a local team who has significant ecommerce experience in Russia. There are nuances to doing business and marketing in
Russia that are important to get right.
2. Recognize that your biggest challenge will be around logistics. Russia is a massive country
with large distances between cities. You will need the proper relationships, people on your
team, and financial capabilities. It will require significant investment and there are no shortcuts. We see this as the most serious barrier that only a few large online retailers can address.
This is why there have been fairly few entrants from the West.
3. Reach out to these customers in the right places. Modnique’s digital marketing team is
participating on Russia’s social media sites, VK.com and Odnoklassniki, and executing
targeted marketing campaigns in order to build a brand. Allowing customers to engage with
Modnique through regional platforms leads to brand loyalty.