DNS Digital Store (DNS)

The network of stores for digital and household appliances DNS (DNS) is one of the largest in Russia. Since its inception, in addition to assembling computers and laptops, DNS has built a large chain of stores in the country. The first of them opened in Vladivostok, since then the network has become federal.

As of 2020, according to the company's official website, DNS is represented in more than 400 cities: from Petropavlovsk-Kamchatsky to Kaliningrad. Its network has more than 1.3 thousand stores, and the number of employees exceeds 15 thousand people.

Owners

As of 2019, Dmitry Alekseev was listed as the largest shareholder of DNS Group with a share of 48.73%, Forbes wrote. Another 43.88% of the shares are held by the financial director of DNS Yuri Karptsov. In addition to Alekseev and Karptsov, DNS at that time had five more minority shareholders with packages that did not exceed 3% of the shares^[1].

Earlier, the Vedomosti newspaper, citing the SPARK-Interfax legal entity base, wrote that the company's managers are the owners: several dozen companies with the abbreviation DNS in the name belong to several top managers of the company. This was confirmed by Vedomosti by phone and the general director of the DNS Computer Center Dmitry Alekseev, who is also the co-owner of the company, according to SPARK-Interfax.

Performance indicators

2023: Revenue growth by 22% to RUB 726.8 billion

The network of electronics stores DNS at the end of 2023 received revenue in the amount of 726.8 billion rubles, which is almost 22% more than a year earlier. The net profit of the company in comparison with the same segments of time rose by 12%, to 42.16 billion rubles. Such data are given in the reporting under RAS, which the retailer published in early April 2024.

As Interfax reports with reference to the materials of DNS Retail LLC (the operating company of the DNS network), the group's revenue and net profit in 2023 were record. During this 12-month period, the company's gross profit amounted to 152.5 billion rubles, which is 14% more than a year earlier. Profit from sales rose by 19.6%, to 69.75 billion rubles.

dns-shop.ru

The reporting of DNS Retail LLC also reports a 9.8% increase in the company's commercial expenses in 2023 compared to 2022 (up to 75.5 billion rubles) and an increase in management costs by 9% (up to 7.2 billion rubles). Other expenses of the group increased 2.4 times (to 3.4 billion rubles), other revenues doubled (to 1.94 billion rubles).

By the end of 2023, 100% of the capital of DNS Retail belonged to DNS Group LLC (Vladivostok), the main owners of which are Dmitry Alekseev, director of DNS Group (44.34%) and Yuri Karptsov, director of DNS-Saratov LLC (Vladivostok) (44.64%). By the end of 2023, the chain combined 2,660 stores throughout Russia.

In November 2023, it became known about the plans of DNS by 2027 to receive more than 60% of revenue through the sale of own brand goods (STM), such as Dexp, Aceline, as well as new brands in all categories of electronics. To do this, the retailer decided to reward employees for promoting such products. In this regard, some DNS partners in 2023 began to reduce their presence in the chain's stores.^[2]

2022: Revenue growth of 6.2% and net profit - 37.6%

In 2022, the DNS retailer, one of the largest players in the Russian market for household appliances and electronics, received a record revenue of approximately 597 billion rubles. This is 6.2% more than the result for the previous year. The relevant data are provided in the financial statements of DNS Retail LLC (Vladivostok; network operating company), made public at the end of April 2023.

At the end of 2022, the DNS retailer received record revenue and profit
Photo: DNS

According to Interfax, DNS's net profit was also a record. At the end of 2022, it amounted to 37.645 billion rubles. This is 52% more compared to 2021. It is noted that profit from sales jumped on an annualized basis by 58.9%, reaching 56.4 billion rubles. At the same time, an increase in commercial expenses was recorded by 9% - to 70.7 billion rubles, while management expenses rose by 25.2% - to 6.7 billion rubles.

According to the retailer itself, more than 2.6 thousand DNS stores operate throughout Russia. The retail network covers more than 1,170 cities in the country. The company has 38.8 thousand employees. The report notes that at the end of 2022, total labor costs increased by 7.5% on an annualized basis, amounting to 26.966 billion rubles.

Analytical agency INFOLine adds that DNS is one of the ten largest online retailers in Russia by the end of 2022. The electronics network ranks sixth in this list, behind Wildberries, Ozon, Yandex, Sberbank and AliExpress.

"The performance of the largest companies is growing slightly faster than last [2021]. The main drivers were the acceleration of inflation and the growth of comparable sales of retailers, especially in the FMCG segment, as well as the development of multi-category markeplays, "said Mikhail Burmistrov, CEO of INFOLine-Analytics[3]

History

2024: Purchase of the checkpoint of the bankrupt PickPoint chain

DNS Retail has begun the process of buying out the checkpoints of the bankrupt PickPoint network. In August 2024, DNS acquired two lots at auction, including almost 140 checkpoints. The total amount of the transaction amounted to ₽7,1 million. Read more here

2023

Production of equipment at the former LG plant in the suburbs

On December 7, 2023, it became known that the Russian network of DNS stores was renting a former factory of South Korean LG in the Moscow region and organizing the production of household appliances on it. The retailer intends to distribute these products through its own stores.

According to the Kommersant newspaper, DNS plans to use LG's capacity to produce refrigerators, washing machines and televisions. The retailer wants to localize the assembly of electronics in partnership with the Chinese Konka. The project, according to participants in the Russian market, has good prospects, since the cost of logistics is significantly reduced during the production of equipment within the country, which reduces the price for end consumers. DNS intends to sell Konka products exclusively on its network.

DNS plans to take advantage of LG's power to produce refrigerators, washing machines and TVs

It is more profitable to have local production, even leased, than to import products into the Russian Federation, since when crossing the border, the distributor is obliged to pay a fee for household appliances, "said Dmitry Shashkin, general director of the Kuppersberg brand.

DNS plans to start manufacturing products at LG's plant before the end of the first quarter of 2024. Experts note that it takes several months to organize the production of TVs, while in the case of refrigerators and washing machines it will take at least a year. The fact is that the assembly lines at LG are designed for this brand, and therefore the plant will have to be completely converted. It is also possible that DNS will sublet LG's power to other interested companies. For LG, the deal with DNS is beneficial because the South Korean company, due to the current geopolitical situation, cannot load production with its own products, and the equipment should not be idle.^[4]

Co-founder of the Russian Association of Distributors and Importers of Video Games

The Russian Association of Distributors and Importers of Video Games (R.A.D.I. Video Games) began its work in Russia, the goals of which are to support the legal import and sale of video games, organize correct communication on them, inform consumers about the content of physical publications of video games, as well as recommendations on age restrictions. DNS is among the founders of the Association. This became known on September 13, 2023. Read more here.

2022

Data breach of thousands of employees

In early December 2022, it became known about a new data leak in DNS. According to experts from the leak search and monitoring service, a Darknet DLBI database with information about the retailer's employees has been posted in the public domain.

DLBI, in the published text file 150,444 records, of which 149,408 belong to Russia and 1,036 to Kazakhstan. In the leak with the database of DNS employees, there are the following lines with information:

• Full name of the employee, personal number;
• email address on the dns-shop.ru, dns-shop.kz, and dns.loc domains (104,820 unique addresses);
• date of birth;
• gender;
• work telephone;
• place of work (branch);
• country (Russia or Kazakhstan).

Database with personal data of thousands of employees of the network of electronics stores DNS was in the public domain

DLBI experts found that the data in the leak is relevant for September 19, 2022. It was then that DNS client data was leaked.

According to experts, both the past and the new leak were "leaked" to the network by the same source who had previously published information about the clients of another large online store - Online Trade (onlinetrade.ru), delivery service Delivery Club, educational platform GeekBrains, Russian Post, and so on.

In early October 2022, it became known that the Russian Ministry of Digital Development had finalized a bill on working fines for personal data leaks. The new version provides for fines not only for companies, but also for their officials. For the leaders of the company that leaked data from 10,000 to 100,000 subjects, the fine will be 200 000-400 000 rubles. For individual entrepreneurs and legal entities, the fine for the same incident will be 0.02% of the turnover, but at least 1 million rubles.

What happens with personal data leaks in the last year is unacceptable, says Vitaly Zarubin, founder and CEO of the Bureau of Digital Technologies. According to him, it is necessary to deal with the reasons, and the fine is a consequence.^[5]

Customer and employee data breach

DNS, which operates a network of digital stores, household appliances announced to leak personal data customers and employees on October 2, 2022. The company does not provide exact information about the amount of compromised data.

According to information published on the DNS website, the leak was the result of a cyber attack carried out by a group of hackers. The hack was carried out from servers located outside the Russian Federation. The company is investigating and eliminating the consequences of the attack.

DNS electronics store chain reports data breach of millions of customers

According to DNS representatives, the leak did not affect passwords - they are still in, safety as well as, data bank cards which are stored on the side of the service YuMoney and do not lie on DNS. servers

Meanwhile, the company has already identified gaps in the protection of its information infrastructure and has begun work to strengthen corporate information security.^[6]

In accordance with the law, Roskomnadzor will conduct an investigation into the leakage of personal data of DNS customers. This was reported by the press service of the department on October 3, 2022.

Upon the fact of the leak, an inspection will be carried out in accordance with the law. The check will take into account the information of the notification about the incident provided to Roskomnadzor 2.10.22, the press service said (quoted by TASS).

On October 2, 2022, the Telegram channel "Information Leaks" reported that a partial DNS dump was posted in the public domain, which contains more than 16.5 million records with customer data. In particular, names, email addresses and phone numbers were merged. It is noted that the database was unloaded no earlier than September 19, 2022. The Telegram channel adds that since 2008, another SQL dump of the Russian network has been in the public domain. The data was leaked by a source that had previously leaked the customer database of the online store "Online Трейд.ру," the author of the channel notes.

By the beginning of October 2022, the DNS retail chain has more than 2,200 stores throughout Russia, and is present in more than 1,000 cities. The company specializes in the sale of computer, digital and household appliances.

2021: Kazakhstan Market Entry

On May 18, 2021, DNS announced its entry into the international market. The first stores outside Russia are open in Kazakhstan: one works in Nur-Sultan (its area is 400 sq. M.), the second - in Karaganda (1100 sq. M.). By the end of 2021, DNS plans to open several more stores in Kazakhstan.

We really hope that in the neighboring fraternal country, customers will like our stores and our service. Yes, Kazakhstan has already formed its own retail market for EIBT [electronics and household appliances - approx. TAdviser], there are wonderful market players. But we are confident that we have something to say and offer. Competition will help make the service for customers better, both in Kazakhstan and in Russia. Competition helps to find optimal solutions and make offers for customers even better, "wrote DNS CEO Dmitry Alekseev on his Facebook page.

DNS opened the first stores in Kazakhstan

Earlier, the Kazakhstan branch of Forbes magazine wrote that DNS plans to open more than 50 points of sale in the country by the end of 2021. According to the publication, the largest sellers of equipment in Kazakhstan by the end of 2020 are Alser (154 stores), Sulpak (134 stores), Mechta (58 stores).

In addition to foreign expansion, DNS is expanding in Russia. By the end of 2021, the company intends to open mini-stores in four regional centers. In the product matrix of its mini-stores, the retailer focused on the most popular groups of goods, and the assortment on an area of ​ ​ 320 square meters. m is approximately 8000 units.

As explained in DNS, the concept of district centers is based on the provision of goods and services of everyday demand, as well as an expanded leisure component, which is an important part of the traffic of centers. Formats that open in district centers are adapted to frequent visits in terms of assortment and services that residents of residential areas need within walking distance.^[7][8]

2020

Revenue growth to 514.3 billion rubles

In 2020, DNS revenue amounted to 514.3 billion rubles, which, according to co-owner and network development director Sergei Meshchanyuk, allowed the company to get ahead of M.Video-Eldorado and become the largest seller of household appliances and electronics in Russia. The turnover of M.Video-Eldorado, according to the retailer's own data, reached 504.8 billion rubles in 2020, an increase of 15.4% compared to 2019.

Ordinary guys from the far corner of Russia overtook the entire market of household appliances and electronics. Indeed, in addition to the remaining title brands of M.Video-Eldorado, these are also the Russian stores Media Markt, the Technosila and Technoshok chains absorbed in the course of the business. Each achievement is also a new challenge. I will not hide, we were comfortable, in terms of management, catching up with colleagues from M.Video. I really hope that they will continue to help us in guidelines, "Meshchanyuk wrote on his Facebook page.

DNS revenue in 2020 reached 514.3 billion rubles

He also cited data according to which in 2020 the DNS network increased online sales of goods and services by 90.77%, and they amounted to 26.29% in the total turnover of the retailer. DNS website traffic increased by 35.9%. The co-owner of the company did not disclose the absolute indicators of Internet retail.

In addition, according to the statistics provided by Sergei Meshchanyuk, in 2020 DNS had 378 new stores (the total number of outlets increased to 2224 by December 31), and sales growth in comparable stores amounted to 20.7%.

The main driver of the financial rise of DNS was Internet sales. They have grown greatly thanks to the COVID-19 coronavirus pandemic, in which people began to shop more often without leaving their homes. In the first half of 2020, when many stores in Russia were closed, DNS online sales jumped 98% compared to the same period in 2019 and reached a share of 28% in total revenue.^[9]

Why the co-owner of one of the largest retailers in Russia DNS will never buy SAP: 6 reasons

Co-owner, general director of the digital and household appliances retailer DNS Dmitry Alekseev on September 10 on his personal page on the social network Facebook published a post with his opinion on why you do not need to buy SAP software.

I decided to start a tradition: every time the younger salesmen from SAP break through to us, I will write a post with my opinion on why you don't need to buy their software. And since a new presentation is being prepared for one of our departments, today I will start, "he explained.

The opinion of Dmitry Alekseev on the points is given in the screenshot below.

A particularly acute point in it was the mention of a bribe, although Alekseev did not give any details about this. TAdviser tried to find them out, but Alekseev did not answer clarifying questions at the time of publication of the material.

Andrei Filatov, CEO of SAP CIS, reacted to Alekseev's message in the comments to the post, starting with this point.

We are a company with zero tolerance for corruption. I ask you to give all information on this issue to me or write to ethicalbusiness@sap.com. We will definitely conduct an investigation, - wrote Filatov. - As for flexibility, only in the data center in Russia we annually make more than 40 thousand changes to our software, which include localization, adaptation to Russian legislation and updates.

TAdviser spoke with one of the former top managers of SAP CIS, who is well acquainted with the company's activities. He said he did not know about such a story, and was sure that employees of the Russian office of SAP did not offer bribes to potential customers: "the company does not have mechanisms to allow this to be done, nor people who have enough mind to come up with such things." It is extremely difficult to imagine that the SAP sales manager would offer something like this, including because it is not clear how this could be implemented later, he added.

In the case of any partners, the former top manager of SAP CIS did not rule out such a probability, since different things can happen on the market, but, he believes, and in this case it would look strange - to offer a bribe to the co-owner of the business.

The interlocutor of TAdviser added that DNS is now the only one of the largest retailers in terms of turnover who has not yet bought SAP. Until recently, the Magnit network stood in the same row, which "held the defense" for many years, he noted. But in early 2020, the company began a large-scale ERP transformation project based on SAP.

DNS is not only one of the largest retailers in Russia, it is also well growing, so it is not surprising that they go to it and try to offer SAP, the source of TAdviser argues. Perhaps DNS once again came to sell SAP, and Dmitry Alekseev's this caused some irritation, which resulted in a post on Facebook, he suggested.

In the latest ranking of the 500 largest companies in Russia published by RBC, DNS ranks 53rd with revenue of 269 billion rubles and an increase of 36% in 2018. In trade, DNS is one of the top ten companies on the same list.

Orders from DNS began to be delivered to Pyaterochki

In April 2020, 5Post, a subsidiary of Kh5 Retail Group, developing new postal services, launched the delivery of digital and household appliances from an online store dns-shop.ru. In the context of a shift in consumer activity from offline to online, the 5Post infrastructure will allow one of the largest chains of equipment stores to deliver goods to 8.5 thousand stores of the Pyaterochka retail chain throughout Russia located near the house. Purchases from the DNS online store can be obtained at the points of issue: at the checkouts located in Pyaterochka stores^[10]

2019: Retailer of DNS technology opened a chain of grocery stores under the brand "Quartet of Tastes"

The first store opened in the summer of 2019, and as of February 2020 there are eight of them. The network operates in pilot mode. The Quartet of Tastes sells vegetables, fruits, dairy products, bread and other products of everyday demand, in total in the assortment of 2000-2500 items. The average check in the store is 300 rubles^[11]

2018: Founders of DNS electronics network become dollar multimillionaires

The restructuring of the network of supermarkets of household and computer equipment DNS allows you to assess the value of the company. According to Forbes estimates, at the end of 2018, DNS cost approximately $790 million, and its owners became dollar multimillionaires^[12].

2016: SAP and DNS will support young specialists in the field of robotics of the Far Eastern region

On September 3, 2016, SAP CIS and DNS entered into an agreement to support and develop robotics educational programs for schoolchildren in the Far Eastern region. The memorandum was signed at the WEF 2016. The companies plan to invest in the development of the competencies of future specialists in the field of robotics, as well as to conduct a set of educational events based on international and domestic experience. The memorandum was signed for a period of 1 year. As part of the cooperation, schoolchildren will participate in seminars, presentations and practical exercises aimed at using modern technologies in robotics to solve the most pressing problems of modern society.

2014

Large-scale inspections of the FCS

On August 11, 2014, it became known about field inspections of the FCS in 11 warehouse facilities located in the Far Eastern, Siberian, Volga, Ural, Central and Southern federal districts. On the same day, customs officers announced the discovery of more than 2.2 million units of electronics and computer equipment, "subject to verification for the legality of its import into the Russian Federation."^[13].

A little later it became known that the checks of the Federal Customs Service, which identify electronics and computers "illegally imported" into Russia, directly relate to the DNS retail network. This was reported by the ITAR-TASS agency, which quoted the representative of the FCS Larisa Ledovskikh.

According to Ledovskikh, DNS goods are in customs warehouses, and their export and sale will be possible "only upon presentation of all supporting documents for the goods."

Customs officers check the legality of the import of phones, tablets, computers, televisions and other electronics. In addition to "checking the reliability of the declaration, the country of origin of the goods is also confirmed," says the representative of the FCS. According to her, the results of the audit will be summed up in September 2014.

Plans to buy the Computer World network

In April 2014, information appeared that to enter the St. Petersburg market, the company chose the way to buy one of the largest and oldest retailers in St. Petersburg - Computer World, without opening its own outlets.

Vedomosti was told about this by a partner of Computer World, a manager of a large distributor of household appliances and electronics and employees of two retailers - competitors of DNS. The manager of the distribution company clarified that he knows about the preparation of the transaction from the words of the DNS employee, said in a private conversation. For DNS, this is the first acquisition of an asset, he says. According to another Vedomosti interlocutor, received from distributors of household appliances and electronics, the deal has already been closed.

The general director and co-owner of DNS Dmitry Alekseev did not comment on the situation, the president of the Computer World network Andrei Lukin did the same.

Burmistrov estimates the cost of the retail business of Computer World (up to 70% of the group's sales) at at least $40 million, and the business for working with corporate customers (more than 30% of sales) at least $10 million. Vedomosti sources do not specify whether the second business is involved in the deal with DNS.

For many owners of the electronics and appliances business, consolidation is an attractive option.

"The weak will unite for the sake of strengthening, the large will absorb the weaker, and some of the owners will leave the difficult and unprofitable business," says Mikhail Slavinsky, general manager of Citylinka.

In 2013, according to M.video, sales of household appliances and electronics in Russia slowed down growth to 2.4%, amounting to 1.157 trillion rubles. In the first quarter of 2014, the market dynamics were also "disappointing," said M.video President Alexander Tynkovan in April 2014.

The scale of the network

At the beginning of 2014, DNS merged 718 "digital supermarkets" in 250 cities of Russia. Infoline estimates their total retail area at about 350,000 sq. m. In Moscow, the network has four retail outlets, in the Leningrad region - one. Back in 2012, the retailer wanted to go to St. Petersburg, but took into account the difficulties with expansion to Moscow and refrained from opening stores, said Mikhail Burmistrov, general director of Infoline Analytics.

2013: Revenue of 110 billion rubles

Infoline estimates DNS revenue for 2013 (excluding VAT) at 110.6 billion rubles. This is several times more than the closest competitors of Ulmart (32.6 billion rubles) and Citylinka (30.7 billion rubles). Among sellers of household appliances and electronics, DNS is the second in revenue: it is inferior to M.video (148.4 billion rubles excluding VAT in 2013), but overtakes Eldorado (106 billion rubles; All estimates, except M.video, from Infoline)^[14]

In the second quarter of 2013, according to Gartner, DNS ranked third in the Russian desktop market.

2011: The largest laptop manufacturer in Russia

In the first half of 2011, the DPS delivered 193,000 computers to the Russian market, follows from the Gartner report. This is more than any other Russian collector. DNS took 6th place after Acer, Asus, HP, Samsung and Lenovo^[15].

Until 2011, the DNS brand was never mentioned by Gartner. And in the second quarter of 2011, he unexpectedly became the second supplier of desktop computers in Russia after the American HP. According to IDC, DNS became the second brand after HP in the Russian desktop market back in the first quarter.

The founder of the company "White Wind Digital" Yuri Dubovitsky in August 2011 told Vedomosti that he had not even heard about the DNS. It takes several tens of millions of dollars to grow at a pace like the DNS, an employee of the analytics company says on condition of anonymity. "I heard that they are not credited at all," the owner of a Russian computer company is surprised.

DNS is primarily a rapidly growing retail chain, the founder of a large Russian computer collector K-Systems Eduard Voronetsky knows. According to him, managers from the Far East are sent to all new stores. Voronetsky is familiar with the leadership of the DS, but does not know the owners.

Analysts at Gartner and IDC were unaware of the DPS simply because the company did not provide them with sales data until 2011. According to Alekseev, the DNS is developing at its own expense, although it took out loans.

Sergei Eskin, CEO of another major Russian computer collector, Depo Computers, does not believe in sales estimates for DNS from IDC and Gartner. According to them, it turns out that DNS sells more computers than Eldorado, which includes about 400 of its stores and the same number of franchisees, Eskin is surprised. The fact is, he suspects that DNS stores sell only computers of their own assembly and analysts do not have the opportunity to double-check their data.

2010:200 stores

At the end of 2010, the DNS retail network consisted (according to the company's website) of more than 200 stores - more than the Positronika chain (195 stores) and the White Digital Wind (86 stores).

2009: First Laptop Assembly Complex

In 2009, the company opened the first laptop assembly complex in Russia. The company has several production complexes in various regions of the country. There is also a production of LCD monitors and tablets.

1998: Networking

According to CEO Dmitry Alekseev, the chain of stores was created in 1998 and grew evenly.

Notes