Otto Group Russia Direct Catalogue Service (DCS) OTTO

Aktivs

Otto Group Russia's assets for 2018 include:

• Direct Catalogue Service LLC (Otto, Witt, Bonprix catalogs),
• Nadom Group и
• acquired in 2009 by Quelle Russia, as well as
• Logistics LLC "Business Service" and LLC "Promopost," located in Tver.

History

2023: Warehouse operator Multicold bought out Russian assets of online retailer Otto. They are estimated at 2.3 billion rubles

In early June 2023, it became known about the sale of the Russian business of the German online retailer Otto to the multi-temperature warehouse operator Multicold. The perimeter of the transaction includes two warehouse objects with an area of ​ ​ 46.8 thousand square meters. m in the Tver region.

This, according to Kommersant, is confirmed by the data of SPARK-Interfax, where the head of Business Service LLC, which owns one of the warehouses in the region, was the top manager of Multicold Alexei Mitrokhin. The operator himself confirmed the fact of the transaction to the newspaper, but refrained from informative comments.

Warehouse operator Multicold has bought out the Russian assets of online retailer Otto. They are estimated at 2.3 billion rubles

Yegor Dorofeev, head of the warehouse and industrial real estate department of the Commonwealth Partnership, noted that high-quality warehouses in the Tver region by June 2023 cost from 50,000 rubles per 1 sq. m, that is, for two warehouses with a total area of ​ ​ 46,800 sq. m Multicold could pay 2.3 billion rubles. However, Dorofeev noted, in this case, warehouses were purchased at a discount. Yana Kuzina, partner of Ricci|Consulting and Evaluation, explained that when buying assets of a foreign player, the value could be 50% of the market amount of the transaction.

Kommersant The source claims that Otto's former warehouses were not filled by tenants at the time of the deal, but after the purchase, Multicold surrendered 7000 sq. m to the company Ozon at a rate below the market rate. Ozon confirmed this information. Multicold plans to rent the rest of the area at a rate of 7,000 rubles per 1 sq. m annually, the source said. Thus, Multicold's income from renting out former Otto warehouses can reach 322 million rubles a year.

The purchase of another object by the operator of multi-temperature warehouses is necessary to increase and diversify the portfolio, says Yegor Dorofeev.^[1]

2020: Rene Pikard - the new head of the company in Russia

In March 2020, it was announced that Otto Group Russia CEO Tobias Nieber, who has led the company since December 2018, was replaced on March 1, 2020 by Rene Pikard, who previously held senior positions at Otto Group in Germany and has worked for Otto Group since 2010.

Rene Pikard announced development plans: "The Board of Directors of Bonprix Group sees huge potential for the bonprix brand in Russia. Our common goal is to maintain the leading position of the bonprix brand among the leading fashion brands in Russia. "

Renee's key priorities outlined the continued development of the B2C brand bonprix and the B2B brand eSolutions: "We strive to understand, feel the desires of our customers and find ways - proven or new - to respond to their needs."

After six and a half years in Russia, Tobias Nieber will continue to work at Otto Group in Germany in the leadership of one of the businesses.

2018: Quelle and Otto online store closures

In April 2018, the German Otto Group announced that it was closing Russian online stores Quelle and Otto. This is being done "in accordance with the global strategy of the Otto Group," Otto Group Russia CEO Martin Shearer^[2] told^[2]. Otto Group will concentrate on the Otto.de marketplace for German-speaking countries, not excluding that in the medium term the site can reach the international level. Marketplaces in other countries are closing.

Otto Group does not completely leave Russia and will continue to develop its brands Bonprix, Witt and eSolutions. eSolutions provides logistics, marketing and IT services to retailers and brands including Tom Farm, Zarina, Befree, Ralf Ringer, etc. Otto Group Russia will remain the "main player" in Russian e-commerce, insists Mr. Shearer. The company does not name the proceeds from the Russian market. Net profit from all businesses in Russia, according to its own data, amounted to €259 million.

If you look only at the Russian business of Otto Group, then there are no serious reasons for leaving: apparently, Quelle.ru and Otto.ru will really fall victim to global restructuring, says Boris Ovchinnikov, partner at Data Insight. According to Data Insight, Quelle.ru and Otto.ru collectively ranked seventh in sales in Russia among online clothing and footwear stores. But at the same time, they had almost zero growth and a multiple lag not only from the leaders of the Wildberries and Lamoda segment, but also from the flagship project of the Otto Group itself - Bonprix, adds Mr. Ovchinnikov.

Thus, Bonprix's online sales in 2017 amounted to 16.5 billion rubles, showing an increase of 10%. Total sales of Quelle.ru and Otto.ru amounted to 3.75 billion rubles, they grew by 4% compared to 2016. For comparison: Wildberries sales grew by 40% over the same period and reached 63.8 billion rubles.

The folding of Quelle.ru and Otto.ru was expected, said Mikhail Burmistrov, general director of the Infoline-Analytics agency. According to the results of 2017, their share in the sales structure of Otto Group in Russia decreased to 15% and continues to decline amid stagnating sales (an increase of less than 4%, to 3.2 billion rubles excluding VAT) and outstripping growth of monobrends, especially Bonprix. Quelle.ru and Otto.ru unconditionally lose the competition between Wildberries and Lamoda, which, although it continues to suffer losses, is actively investing in sales growth, Mister Burmistrov agrees.

Otto Group's focus on the development of logistics in Russia is expedient, Mikhail Burmistrov is sure. Buyers get used not only to free delivery, but also to the fact that the product can be received the next day and choose a convenient format: delivery home or to the pickup point. As a result, the expert concludes, fashion retailers who enter the online sales market are forced to either independently form logistics schemes, which are difficult and expensive, or attract a logistics partner, one of which is eSolutions.

2012

Dissatisfaction with Russian Post

"Remote trade in Russia is exactly the same in its structure as in the rest of the world," comments Scherer. - However, each individual step in it is taken according to completely different rules. Here it is impossible not to take into account the peculiarities of Russian mail and logistics. Russian Post, for example, does not accept flat-screen TVs for forwarding; parcels are severely limited in size and weight. "

That is why in the near future (2012) "At home" to switch to the services of the transport company Hermes, responsible for the delivery of Otto goods in Europe, and a partnership with the courier service DPD. All Otto Group trademarks operating in the Russian Federation plan to use the alternative Russian Post as a goods delivery service. In addition, Otto Group plans to open up to several hundred smaller Otto, BonPrix and Witt stores in supermarkets, cell phone stores and photo salons. All this will improve service and reduce the delivery time from six to seven weeks to several days. And in large cities it will be possible to deliver directly on the day of order. However, so far the corporation does not intend to refuse cooperation with the Russian Post. The Russian partner even builds, taking into account the interests of Otto, its own large automated sorting center in Tver.

In Russia, catalog trade is subject to a special range of goods, and their marketing also has specific features. Sales of clothing, on which the parcel trade is based in Europe and the United States, are not as popular here as the trade in a variety of household goods, from tablecloths and pans to slow cookers and electric messengers. Such goods are sold by both "Home" and "Meggy Mall," another subsidiary brand of Otto, operating in the mode of an online store.

The brand "Health and Comfort" sells various hygienic and medical products, from cosmetic creams to gowns. In addition, the Russian part of the Otto group includes the Promenad.Ru online shoe store and the recently opened MyToys.Ru children's toy store.

As for the promotion of goods, Martin Scherer notes that an extremely important feature of the mentality of Russians for the company is the desire to bargain. Therefore, they still have levers that are useless in relation to Europeans: bright labels "discount," programs "recruiting" neighbors and friends, contests, lotteries.

Overview of the company's assets in Russia

Otto Group Russia for 2012 includes the following companies:

• Direct Catalog Service LLC (OTTO, Witt, Bonprix and other emerging brands),
• NADOM Group,
• Quelle Russia, as well as
• logistics and fulfillment of DKS, Business Service and Promopost located in Tver.

The Company controls the following brands:

• "To the House,"
• "Meggy Mall"
• "Health and comfort" - sells various hygienic and medical products, from cosmetic creams to gowns.
• Promenad.Ru - online shoe store
• MyToys.Ru - children's toy store

2011: Sales of more than 500 million euros and 2,200 employees

The sales volume of Otto Group Russia in 2011 exceeded 500 million euros per year, the share of online sales - more than 50%. The Otto Group Russia team has more than 2,200 people.

In 2011, parcels were sent almost twenty percent more than in 2010.

2008: Opening of a logistics complex in Tver

In 2008, Direct Catalog Service acquired its own logistics complex in Tver.

In parallel, the oldest remote trading operator in Russia "To the House" and the service company "Promopost" joined the Otto group.

And with the purchase in 2009 of the German company Quelle, which sold clothing and shoes on catalogs, Otto actually received a monopoly position in the Russian remote trading market.

2006: Subsidiary of Otto Group Russia launched

Since 2006, when the subsidiary Otto Group Russia was launched. In 2006, Otto, BonPrix and Witt International opened a joint division of Direct Catalog Service in Russia.

Postal trade in Russia occupies no more than one percent of the total trade in the country, and the local market is heterogeneous and specific. Otto bluntly says that there are no "typical buyers" among Russians.

are nine time zones in Russia," explains Martin Scherer, CEO of the Nadom Group, one of Otto's main operators in Russia. - This is a huge country with urbanized megacities like Moscow, where buyers' expectations are somewhat even higher than in Western Europe. At the same time, there are regions in it where residents do not even have television, not to mention the Internet. The country is divided into European and Asian parts, but many regions are very close to the Middle East. The territorial expanse partly explains why the types of buyers^[3] vary^[3] much here^[3].

The complex Russian market aroused great interest in Otto - largely because there was no strong competition in the parcel trade segment, and the growth rate of the retail sector reaches double digits. Unlike Europeans, Russians, with the exception of residents of the capital, practically do not spend money on renting housing, living in privatized apartments. At the same time, they do not have a tendency to make savings (the bitter experience of the depreciation of the ruble since the collapse of the USSR affects), preferring to immediately direct free money to buy consumer goods.

1991: Launch of business in Russia

The company says that Otto Group has been operating in Russia since 1991.

Notes