Ambition "Ecoline"

Shoes are considered to be the second "face". Shoes polished to a shine indicate the owner’s accuracy and are credible, however, due to Russian weather conditions and transport inconvenience, it’s difficult to keep a perfect look of shoes throughout the day. Shoe-cleaning machines came to the aid of a modern person, allowing them to observe the rules of cleanliness, business etiquette, as well as save time and money. Is it possible to use these devices not only to save, but also to make money? In Russia, the only manufacturer of such equipment is Ecoline. Eldar Azisov, CEO and owner of the Moscow representative office of Ecoline, spoke about the effectiveness, profitability and prospects of this business for SR columnist Liliana Berger.

- Eldar Asymovich, where did your business begin? How did the market perceive the novelty?

We started our business by promoting an unknown Russian manufacturer of shoe cleaning machines. It wasn't easy. It took three years to find dealer partners in the CIS. This strategy was chosen because the market was small, and focusing on retail customers would have been a mistake. Eventually, we built a dealer base: it included both private entrepreneurs and large companies specializing in office furniture and exclusive interior design. After that, we began developing our own models of machines that were on par with those of the German brand Heute. Customers liked the pilot models, and they began buying our products through the dealer network. Moreover, our price was almost three times lower than the German brand. Thus, we captured 70% of the market.

- Who is the core of your dealer system?

- The bulk are individual entrepreneurs who are interested in working with small turns. Our products can be easily sold, for example, by a small cleaning company selling rubber mats. If you have a good 90 catalog, the success of such a business is guaranteed. The client can choose either the cheapest options, or pay for the car in installments. Sales are also carried out by companies that comprehensively supply hotels, restaurants, hotels, and boarding houses.

“Your company has been around for nine years.” What changes during this time would you call key?

- For nine years, stable production has been established, a constant customer base has been created both in Russia and in the CIS countries.

But there were no radical changes during this time in the company. Our main backbone - the dealer network - is growing and developing gradually, including in Kazakhstan and Ukraine. In Kazakhstan, we successfully compete with a Chinese manufacturer. Moreover, the quality of Chinese devices is inferior to ours, but their price is much higher. If we talk about Russia, then the changes concern only the new models of our range. Every year it is replenished by one position.

The turning point for the company was 2007 year. Customers are finally accustomed to the equipment, and the familiar thing is the main criterion for success. Of course, at first we needed competent consultations so that the client was convinced that he needed it. We are grateful to our dealers who were able to provide these consultations.

In the 2008 year, we rebranded: since Ecoline is a group of companies that operates in various business fields, we gave the name Brush's to the direction related to shoe-polishing machines. This was not reflected in pricing policy.

The financial and economic crisis played into our hands. For example, the price of German equipment is calculated in euros, so its value in Russia has increased by 30-40%. In this connection, we reduced the price, but the quality was left unchanged.

- Comparing production costs and profit, is it possible to say that business remains profitable today?

- Until 2008, the turnover grew by 15% annually. This year, there has been a slight decline due to the purchasing power of the population. We began to sell less due to the narrowing of the market, but our market share increased. Perhaps the government ban on slot machines has influenced. New companies appeared that were looking for new types of business, and we have a series of machines equipped with a coin and bill acceptor system. So there was a sale of automatic high-quality shoeshine services. Of course, this vending business is not as profitable as slot machines, but it allows you to have your own constant profit. In the market of shoe-polishing machines, the share of vending machines is about 40%.

- The 15 company’s assortment includes six series of devices - “Polio”, “Aesthetics”, “Elite”, “Optimal”, “Effective”, “Premium”. What is their significant difference?

- The differences are in the principle of work. There are machines for cleaning and polishing the upper part of the shoe; there are machines for cleaning the sole; and there are machines for cleaning the sole and side of the shoe. The bulk of the assortment is occupied by machines for polishing the upper part of the shoe. Significant differences between them are in engines and brush sizes. In companies where the number of employees does not exceed 10 people, brushes are changed approximately once a year, and the cream is enough for 500-700 shoe shine. In large companies, brushes change every 4 of the month, and cream, depending on the intensity of use.

– Who is the main buyer of the devices?

- Our customers can be divided into three categories: the first is the offices of small and medium-sized companies with the number of employees from 10 people and above; the second - hotels, restaurants, hotels and pensions; and the third is large financial organizations and other Russian corporations. Here is an example. In October of this year, we participated in an exhibition dedicated to the hotel and restaurant business in Sochi. Despite the fact that in the south the weather is always good and there is practically no dirt, company leaders, taking care of their image, dared everyone from our stands. Moreover, the offered prices are acceptable - from 16 to 45 thousand rubles per device.

- Do they buy shoe stores?

- Shoe stores are not our key customers, but there is a special program for working with them in the plans. Most likely, this will be a proposal for the most affordable shoe polish machines, with which you can expand the service of premium stores. We assume that the first time will have to paint the equipment in standard colors (gray, dark gray, gold, copper). Exhibition samples are supposed to be paid postpaid.

- And how is business developing in the capital?

- Three years ago, we installed shoeshine machines at Sheremetyevo Airport - in men's toilets and on all floors of waiting rooms. It came to the ridiculous: on the upper floors, the equipment brings more profit, and the brushes remain in a tidy and clean condition due to the fact that the devices are used by foreigners. You can’t say about the lower floors, where the Russian mentality does not allow you to part with the chervonets. Taxi drivers are suitable, they apply cream on the shoes, as it is free, and, not including the car, they kick their feet on the brush. The devices can be found in the toilet rooms of railway stations, then so that a person, having arrived in Moscow, could put himself in order, spending only 10 rubles.

Cars are also installed in transport companies, tax and administrative institutions, but only for office workers. The fact is that it is unrealistic to keep the machine in working condition in a room where people have more than 1000 people per day. Constant replacement of the cream is required, replacement or cleaning of the brushes - once every six months, otherwise from the cream, which is cooked on a wax basis, the brushes begin to lose their polishing properties of shoes. A clean and neat machine is the prestige of the company.

In Europe, shoeshine machines are even in the subways. We have been banned because of the threat of terrorist attacks.

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- Who do you consider your competitors in this segment of the business? What is their advantage?

- Equipment for cleaning shoes requires special care. Therefore, the first rule is to maintain its performance. If the brushes are dirty, then they will not perform their functions, and if there is no cream, then the polishing efficiency will decrease to 50-60%. Hence, you need to think about the company's income - brushes, supplies are exclusive types of products. In Russia, large companies can make consumables for devices 2-3, but they lift prices because they are not profitable and not interested in working otherwise. The main criterion for the quality of our sales is a cream based on beeswax, 270 rubles per 0,5 liter.

Some dealers buy Chinese cars, but there are no consumables for them, so their products are disposable - they will work out their 7 months and that's it.

German companies have very high-quality brushes, their price is from 400 euros against our 200 euros. However, they polish the same way, and the horsehair used in brushes is all Chinese. Of course, the Germans released several new models. But do not forget that their factory is a large production that has existed since 1905 of the year. They supply their cars all over Europe. But despite this, the quality between the German and our devices can put an equal sign. In other words, German cars are expensive, and Chinese goods are disposable. So, the domestic manufacturer in Russia and the CIS countries is the most appropriate for the buyer.

- Does the company have a service for repairing and replacing consumables?

- The company's warranty on engines is 3 years, but they serve at least 10 years. If the car breaks down at Moscow customers, then the device is brought to us, and we repair it. If something breaks with regional customers, then they remove the idle node and send it to us. As for the replacement of cream or brushes, the customer himself can buy from us what he needs, or call a specialist in place, especially since it is not expensive. It is in our interests that the client is satisfied with the service and has a working device “under his foot”.

- Do you rent shoeshoes for rent?

- We rent out only for short-term events at 3-4 days - during exhibitions, meetings of senior officials, conferences. The fact is that sometimes a shoe polisher is on the list of requirements for organizers. Long-term rental is not profitable. If the price was higher, it would make sense.

- Do you make individual orders?

- We try to make any order in the shortest possible time: from the moment of payment, the machine is assembled within two working days. The companies themselves choose the color scheme. For example, Ingosstrakh loves blue tones. Sometimes there are unusual orders, at the request of the client we make cases of original forms. This, of course, is an expensive pleasure, since first a documentary project is done, then a pilot sample, which passes a series of tests for quality work and stability. If something goes wrong, then the project is done again.

More recently, we made an individual order, which cost the client 130 thousand rubles. You can make a glamorous option - for the desired interior design with a gold-plated coating.

- What is your forecast for 2010 year?

- The Ecoline group of companies has different lines of business, we focus on two projects. One of them directly concerns machines for a shoe-polish. We plan to launch two or three new premium models; these will be beautiful and powerful devices with a mahogany case. At the request of the customer, if the price does not suit him, we can make a case of pine or walnut. Polishing brushes will be made of special horsehair. The models will have more powerful and expensive engines. If now we use Siemens engines and equipment from Russian manufacturers, then newer models will have better engines. The price of this exclusive masterpiece will be about 89 thousand rubles.

If we talk about the corporation as a whole, we will build a system of strict management control, as the company intends to adapt to European production technologies. We plan to buy new expensive equipment, train employees and conduct additional product quality control. This will help increase the life of the apparatus to 30-40 years.

For your information:

Marat Abuzyarov, sales manager of the company "Wedge Market":

- We are distributors of shoe-polishing machines of both German and Russian brands. The share of sales of Ecoline is 50%. The buyers are satisfied with the quality, there were no complaints. Of course, due to the crisis, sales fell. However, we are expecting seasonal sales growth.

Sergey Petrov, deputy general director of the company "Everything for the hotel":

- The Ecoline company is the only Russian manufacturer of shoe-polish machines. They are slightly inferior to their German competitors, the Heute brand, in that the imported cars have a direct drive engine that provides less noisy work. In addition, the Germans have thicker brushes, better cream and a wider range of designs. But Russian manufacturers have no competitors in price.

Mikhail Egorov, General Director of Vedster LLC:

- The products of Ecoline company in the Russian market are in serious competition to foreign manufacturers - their prices are one and a half times lower, and the quality is comparable to the German brand. By technical parameters, they are the same. The line called Royal Line even surpasses the Germans in design options: exclusive coating of the case with textured materials, a smooth polished chrome surface, a gold-plated surface and a “chameleon” coating - it shimmers and changes color from a different angle of view. In our company, 70-80% of sales is accounted for by Ecoline. Sales volumes this year compared to the 2008 year increased 1,5 times.