Online shows growth. Large Internet sites strengthen their position in the clothing and footwear category

Large online retailers Wildberries and Ozon are actively increasing sales of the clothing and footwear category. So, according to the results of the 2018 year, the sales volume of shoes on Wildberries.ru increased by 73% and reached 25 billion rubles. Sales of clothing and footwear on the Ozon Internet site at 2018 increased by 65%. Online stores attract fashion brands with high turnover, but provoke price wars.

The largest Russian online retailer Wildberries, reports an increase in shoe sales in 2018 by 73%. According to the results of the year, the sales volume of shoes on the site reached 25 billion rubles. According to the company, sales of men's shoes increased most significantly - by 80%, their volume amounted to 6 billion rubles.

“First of all, the increase in shoe sales on the online platform is associated with the expansion of the assortment, as well as with the increase in the number of points for issuing orders from 1800 at the beginning of 2018 to 3000 at the beginning of 2019,” remarks Vyacheslav Ivashchenko, Development Director of Wildberries. The Wildberries pick-up chain currently covers Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia.

It is the presence of an extensive network of pick-up points that is a significant advantage of Wildberries over other large Russian online sites, market participants believe, this attracts a large number of brands to it and allows Wildberries to remain the largest online retailer in Russia with an annual revenue of about 120 billion rubles.

“Wildberries has a very developed infrastructure in terms of pick-up points, which cannot but please their large audience,” says Aleko Iliopulo, brand director of the Econika chain of shoe and accessories salons and accessories.

Meanwhile, the Econika company only last year decided to fully cooperate with this site. “Previously, we experimented with this channel and did not ship the goods in bulk,” he comments. - As soon as we saw the speed of goods turnover, we placed an order for the next season and began to increase the volume of deliveries to the marketplace, starting from July - August 2018. Proportionality also grew in supply, ”says Iliopulo.

In most cases, Wildberries works with suppliers on commissions. The supplier, independently forms the assortment, which is presented on the site and can adjust retail prices for sales management. The platform does not redeem all product items, but receives its remuneration in the form of a commission based on sales results (about 35%). It was precisely such a scheme of interaction with their suppliers that the co-owner of Wildberries Vladislav Bakalchuk spoke in a recent interview with Kommersant.
Econika also adheres to this scheme of cooperation with Wildberries, and, as Aleko Iliopulo notes, the turnover on the site very much depends on what price the brand sets for the goods.
“There is a certain price limit, after which the sales speed slows down. Therefore, we are looking for the optimal ratio of price, volume of supply and product. We don’t want Econika to work only with a discounted assortment on Wildberries, all the more so that in each season its residues are getting smaller and smaller. “We are interested in selling more at the beginning of the season at full price, and being able to develop in order to achieve our goals for the channel’s margin and profitability.”

This year, starting in February, Econika plans to launch full-fledged sales of its products also at Lamoda, and is considering the possibility of entering other online sites.

Ralf Ringer, which has been selling its shoes on Wildberries since 2015, and collaborates with other major online stores Lamoda, Kupivip, and Ozon, is also seeing steady growth in its online sales channel. “Over the past few years, the overall trend of the online sales market has been growing steadily, which, of course, is reflected in our sales,” says Igor Kamelkov, Ralf Ringer Commercial Director. - However, thanks to the work carried out and focus on results, we have a multiple increase in comparison with the general market, equal to 40-45% per year. Similar indicators are demonstrated, including by the Wildberries platform. ”

However, not all brands work with Wildberries as a marketplace. For example, the Italian brand of clothing and footwear Geox, which has been cooperating with Wildberries for many years, is included in the TOP -10 of the brands of this platform, and, like other goods selling Geox shoes and clothes, interacts with Wildberries exclusively on commercial terms, i.e. on the terms of the purchase of goods.

“We can declare that our relations are developing strictly according to agreed strategic plans regarding the coordination of the structure of the Geox assortment matrix, the presentation of some exclusive lines, the observance of seasonality, and so on. I can also note that we have approved partnership plans and turnovers with Wildberries, ”says Sergey Shuvalov, General Manager of Geox. - Our partner shows very good growth dynamics and, according to certain estimates, exceeds the rate of development of the online sales market, fixing an annual increase in turnover from 60% to 80% in the whole site. As for the Geox brand, we can note that our turnover has more than doubled over the past two years. ”

According to him, sales of the online footwear and clothing market in Russia are growing by 25% annually. “Despite the rather difficult economic situation and the volatility of the Russian ruble, web projects are now in a better situation compared to offline,” he says.
In addition to Wildberries, Geox is represented on the Internet platforms My Toys, Ozon, Lamoda. Geox executives particularly highlight the successful partnership with My Toys in selling children's assortment.

Along with the growth of sales in the segment, competition is growing. So at the end of last year, the Russian online retailer Ozon announced the strengthening and significant expansion of the category of clothes and shoes on its site. The press service of Ozon, which at one time started a business with the sale of books, and subsequently significantly expanded its product range, noted an increase in sales of 2018% in the “clothing and footwear” category in 65 year. The number of orders in this category in 2018 amounted to 1,2 million, and by the end of the year it entered the top 5 in the sales structure of the online retailer. Ozon is also developing a network of pick-up points, which has about 600 points, and in the next couple of years plans to equip these points with fittings for clothes and shoes, as well as open specialized warehouses for this product category.

It is also worth noting that increased competition in the segment provokes price wars on Internet sites, which has a negative impact on the entire market. The “war” of Internet sites for the best price offers to the final buyer negatively affects the entire market for sales of clothes and shoes, however, as well as the marginality of Internet projects, ”says Sergey Shuvalov. “Any brand would like to avoid this situation, and we hope that starting from the spring-summer'19 season, our partners will still be able to deal with the problem of price dumping of each other.”