April 1, 2017—- It was the last day of MIPIM 2017 in Cannes and I had an interview with Maria Shiryaevskaya, Communications Director for Ulmart, a major Russian e-commerce player with a mixed online-offline distribution model.
She explained to me how the Ulmart distribution and fulfillment model works in Russia. I was amazed at the size and scope of the distribution & fulfillment centers that are scattered across Russia. Maria mentioned that the Ulmart model was so popular in Russia that Amazon has decided to enter the marketplace to compete.
Customers can arrive at a local fulfillment center and order a product through their online ordering platform. Within minutes their product is sorted and put on a conveyor belt and arrives in the lobby for the customer to pick up. The process reminds me of how you order a prescription drug at a pharmacy, “Just In Time” fulfillment. Most of the distribution centers are located off a major highway and within a short distance of an urban center.
Ulmart has two “hyper” format “suburban fulfilment centres” and another 40 smaller “urban fulfilment centres” in other cities. The company plans to roll out six more “hyper” format sites across Russia the country by 2018.
According to Ulmart CEO Sergey Fedorinov, “A customer can come to our urban fulfilment centres 24 hours a day and seven days a week to choose the goods or talk to our experts. You can order online and get the goods from one of our pick up centres. Or the most expensive way is to order online and have it sent to your home. There is about a 5% difference in price between each option. In general, it makes the most sense to come to an urban fulfilment centre if you are buying a bulky good, whereas small and light things do not cost much to have delivered to your home. It’s part IKEA and part Amazon.”
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