08 July 2022

Ukrainian e-commerce is growing against the unpredictability of the economic situation in the fall. Oleksandr Kolb, founder of the digital agency Promodo, and popular IT blogger talked about online sales and e-commerce in the “MIM. Economic Front” episode. 

His company suffered the worst situation in March when monthly sales dropped by 90% compared to February. After that, the situation started to improve slowly. 

- Revival depends on the sentiment of the business community and the overall situation in the industry. Ukrainian business brings us 93% of our revenues. 9 out of 10 top marketplaces are our clients. The situation was very similar to the COVID crisis: after the initial panic, we understood how to operate. In April we recovered a substantial share of our portfolio, and in May more than half of the Ukrainian businesses were working. 

Some of our clients managed breakthroughs during this highly uncertain period. They reinforced their positions. They even spent more on search marketing, context advertising, and e-mail marketing, Oleksandr was telling us. 

Now the industry is starting to employ longer-term strategies, up to 3 months. As a result, the products are re-packed, and the toolkit is reviewed to meet the current challenges. 

Internal migration led to the booming of the markets in Lviv and Transcarpathian regions whereas in the Kharkiv region the sales dropped dramatically. Logistics hinders sales, especially in the areas neighboring combat zones. Some warehouses are ruined. 

Oleksandr mentions that the assortment is shrinking. Some categories of goods are true deficits. People are buying a lot now. However, nobody can predict consumers’ expenditure. Many are relying on their savings. The GDP is forecasted to fall and the end of the war is unpredictable. 

- More than 60% of consumers do not care for brands anymore. I know it from my own experience. Since the war started, I bought only a pair of sneakers. I bought them online because all the clothes stores in Kharkiv are closed. People care about comfort rather than appearances now. We all are rethinking our priorities and crunching our personal numbers. Even seemingly well-to-do people come for humanitarian aid, Oleksandr explains. 

So far, the situation has developed like the COVID pandemic. At first, people panicked. Then they adapted and renewed their development. However, we are much more uncertain now because nobody can predict the war. 

- We have no idea how people’s habits will change after the war. Will they buy in stores? Will the current demand remain the same? Will people have enough money to? For example, e-commerce peaked on Black Fridays. This year we do not plan for Black Friday at all. Before the war, in summer we were preparing for the large-scale promo-campaigns. It was a true war for customers. We do not even think about that now, Oleksandr shares his experience.  

- We are not expecting the “Back to School” campaign to work this year because many women and children fled the war, schooling is online. We are having 60% - 70% of male customers compared to approximately 50% before the war as a result of migration. 

On the other hand, it is time to launch no-name goods because people do not care about brands now. For the companies, it is a good time to change. 

- It is time for fast changes. Companies, especially the large ones do not change much when everything works well. Now, people do not need any explanation about the need to change. The new players are coming, they are altering their business processes as it was during Maidan. However, we all share the priority – the end of the war, Oleksandr said.