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View Full Version : Proven Business Models that would work in Russia?



P.I.M.P.
09-06-2004, 12:49
I posted this in the the wrong section a while back... Maybe it will roll better here?




Nicholas Megrelis took a copy of The Body Shop and opened over a hundred "Dlya Dusha i Dushi" stores in Russia. Rostislav "Rostik" Ordovksy created Rosinter restaurants, and now has more Rostiks locations in Russia than McDonalds. Both of these guys are expats who took ideas that work well elsewhere and applied them to Russia.

Any similar ideas? I’ve had the urge to develop tennis “bubble” courts or similar venues in air-supported structures which can sit on virtually any flat-top building throughout the city. The same goes with coin-operated self serve car washes etc.

jheisel
09-06-2004, 13:28
You'd think laundromats would work here, given the number of people washing clothes in their bathtubs and/or hanging them on the balcony to dry.

pengwn9
09-06-2004, 13:50
I have heard there are a couple of laundromats here. There definately should be more.

We brought a king size bed over here and have only a tiny little Euro washer dryer. None of the king blankets or quilts will fit in this itty bitty little machine. I already flooded the kitchen once trying to wash them.

Love to find a double or triple loader in Moscow. But then I'd be hauling my damned laundry around on the Metro.....not a fun thought.

Moscow lacks a lot of the conveniences (like laundromats) I'd taken for granted back home.

Ghost
09-06-2004, 13:55
When I lived in San Diego, there was a "Buds and Suds" place. You could hang out and play pool and drink, while doing laundry.

natlee
09-06-2004, 15:11
I'd say it's much more convenient to have a washing machine+dryer at home (well, given the choice) and wash whatever you want whenever you want as opposed to standing in lines and then sticking all of your stuff into a washer, whether same color/fabric or not. I am not saying laundraumats would absolutely not work here but maybe having too many is not such a good idea - "poor"/old people are probably used to and fine with washing stuff in their bathtubs and people with a little bit of money will buy a washer. Dry clean your blankets!

yack
10-06-2004, 10:59
Personally I do not think that laundromats may have a go even in Moscow leave alone provincial cities. However I would expect high demand for dry cleaners due to fast growing white-collar population.

natlee
10-06-2004, 11:03
Agreed.

GreatArcticBear
10-06-2004, 12:46
There is NOT ONE dry cleaner worthy of the name in Moscow (except perhaps the one in Auchan Marfino, which I have yet to try). They are either too slow (Contrast), too high priced (Leda - also slow), or out and out lousy (most neighborhood dry cleaners).

natlee
10-06-2004, 12:55
Very true, good business idea.

pengwn9
10-06-2004, 14:09
Combination of ideas is a winner!

Laundromat with big double loaders, dry cleaners, pool and beer, all in the same facility. Maybe a sports TV. No face control.

Anybody got a catchy Russian name? Something like the equivalent of Duds and Suds? Drink and Dry?

J.D.
10-06-2004, 14:21
Could probably do something with 'chemicals' as that is in the Russian word for dry cleaners. But 'chemicals' has more of a non-alcohol type drug conotation.

Well I had thought about this idea a couple of years ago. You can't really trust the locals not to abuse the machines so I figured you put all the machines behind the counter in full view with paid help running them (hey help is cheap here). This counter could easily double as a bar. Throw some pool tables and video games in the waiting area and there you have it.
The only big question would be where to locate it. It's not like there is one local neighborhood where all the expats without washing machines live.

yack
10-06-2004, 14:39
If you started to speak of staffed laundromats, my opinion is that all those new Moscow luxury developments may be a way to go. Of course they should provide full door-to-door service including ironing, aromatization of some sort or whatever you can think of.

GreatArcticBear
10-06-2004, 14:42
Keep in mind that most people in those luxe developments have washing machines and household help, so that the focus in those locations should be quality dry cleaning, pressing, and possibly minor tailoring - perhaps 80% dry cleaning to 20% regular wash should be the norm for the elite market.

rosieredwood
10-06-2004, 15:11
Originally posted by P.I.M.P.
Nicholas Megrelis took a copy of The Body Shop and opened over a hundred "Dlya Dusha i Dushi" stores in Russia. Rostislav "Rostik" Ordovksy created Rosinter restaurants, and now has more Rostiks locations in Russia than McDonalds. Both of these guys are expats who took ideas that work well elsewhere and applied them to Russia.

Don't forget the "Dikaya Orkhideya"/Victoria's Secret chain of lingerie shops...ROOOOOOWWWWW

So, as far as I understand, none of this is orginal, from the above-posted to the Bystrov line of instant breakfast meals. Selling sukhariki is about as original as I've seen here.


Oh, and laundromats absolutely would NOT thrive in the native community (only the expat) for a number of cultural reasons:

1) hygiene- the belief that the machine is unhygienic, because it has been used by a number of people.

2) common respect for others - just look around a crowded Micky D's or any other fast food restaurant - absolutely "0" respect for those coming afterwards - no table clearing, wrappers strewn everywhere...

gadfly
11-06-2004, 13:16
Why not mezzanine financing for companies that already work well here? Mu-Mu could stand to open up about 30 more restaurants. Another idea - the Sears Roebuck catalog. 95% of the country isn't online and lives way outside Moscow. Catalog shopping could take off if you could find an affordable UPS/FedEx style shipping service.

rosieredwood
11-06-2004, 16:56
Originally posted by gadfly
Why not mezzanine financing for companies that already work well here? Mu-Mu could stand to open up about 30 more restaurants. Another idea - the Sears Roebuck catalog. 95% of the country isn't online and lives way outside Moscow. Catalog shopping could take off if you could find an affordable UPS/FedEx style shipping service.

Just forget about online shopping, anywhere in Europe. Direct contact with the client is still the best bet...

DJ Biscuit
11-06-2004, 19:17
Proven Business Models that would work in Russia?


What about television evangelism? Good money spinner. ;)

IRS_Runner
11-06-2004, 21:22
How about Harrod's or Macy's?

Jose L Piedra
11-06-2004, 21:33
Catalogue shopping isn`t so good when most Russians outside of Moscow/ St Pete don`t have a bank account and don`t trust banks after the `98 crash.

Since the average wage outside of Moscow is something like $75 a month...... better concentrate just on Moscow / St Pete....

GreatArcticBear
11-06-2004, 22:29
Stockmann in Mega, Vesna on Arbat, and the renovated TsUM, are Moscow's answers to Macy's, Bloomingdales and Harrod's, respectively. TsUm is not finished yet, from what I understand.

As for catalog shopping, this did exist under the name EuroShop. I am not sure if it still operates. In any case, the goods they sold were of the lowest quality, and the Swiss expat proprietor was an absolute scoundrel (subject of major TV expose in his native Switzerland - closed up shop and set up in Russia soon afterward). That may be the reason that it failed. Their web site is no longer operating. Payment was via Sberbank transfer; Russians are used to this as that is how they pay communal charges, press subscriptions etc.

Jose L Piedra
11-06-2004, 23:05
That`s the problem, of course, LKKL - for catalogue shopping, the average Russian outside of Moscow/ Piter can only afford the most basic stuff. My ex-inlaws were normal working people who didn`t even buy candles - "frivolity". The only reason they`d save up for Western goods was that they were less shoddy quality than home produced ones, and less likely to fall to pieces. If you ever watch someone in provincial Russia buying something, it`s a torturous process whilst every aspect (and guarantee) of a $10 kettle is discussed at length...... and the goods ARE in the shops. I think provincial Russians would be very chary of buying goods which they couldn`t first examine.

GreatArcticBear
11-06-2004, 23:31
This reprobate sold stuff that was guaranteed to fall apart after 30 days; however, I still think that a decent catalog shopping service could succeed here. Out of interest, I plan to find out the correct present status of this firm - happened I was looking into EuroShop earlier today for reasons unrelated to this discussion. Come to think of it, I had a small marketing deal going with TV Shop a few years back; this service is also no longer in business. There are also services that sell patent medicines and other detritus via catalog - not sure where they stand now.

Then again, there are plenty of decent Internet shops now; some of these may have catalogs as well. I have also seen some sort of shopping service offered via the post office.

IRS_Runner
12-06-2004, 01:19
How about the Aldi and Lidl? they seem to be everywhere in Western-Europe and they are still growing strong.

gadfly
12-06-2004, 08:05
According to the 20 May 2004 Economist,

"Though awash with profits, the oil firms are lazy; they tend to invest in squeezing the most out of their current oilfields, rather than in exploring new ones. Yet many oil towns are miserable places where most businesses are controlled by the oil company. With little else to entertain them, workers often spend their pay packets on drugs and prostitutes, turning the towns into hotspots of HIV infection."

The reason catalog shopping might work is that people with decent incomes are so scattered to the winds outside Moscow. A guy my friend met in Kazan met all of his money importing German cars and selling them to oil execs for a hefty commission. Most people don't have luxury garments available to them - all they can buy is the stuff that's shipped in illegally from Turkey and China by small-time merchants. It's a huge cottage industry, but most rich people can't get the good brands. My friend Marina from Yekaterinburg loves Diesel but didn't even think they had stores in Russia.

J.D.
12-06-2004, 08:13
A cataloge store sounds great to me. I remember as a kid that Sears had these in small towns and even on the outskirts of big cities. They were great for buying large appliances or anything that you could wait a week for.
One store in every semi-major city with truck runs once a week sounds like an interesting idea.
But do the people in these cities have the money to buy your items and will they buy them site unseen. Perhaps if you offer tempting items at tempting prices. I suppose they could still examine it after it arrives and before they pay for it.
So just like the Sears cataloge stores of old there would be stuff sitting around at reduced prices because people had ordered it and not picked it up.

gadfly
12-06-2004, 08:30
You'd just use brand-name stuff that they can't get at home and usually buy on 'shopping tours' to Greece and Turkey. When I was in a part of Jersey City that didn't have any decent restaurants, there was a food delivery company that published a guide with a different restaurant menu featued on each page in the style of that restaurant - they have the same thing here.

Another thought - new urbanism - planned communities that offer the benefits of a small town. There's one, Edem, at www.edemtakt.ru that offers Rossinka-style townhouses in an 'experimental community' for $870 a square metre and houses for somewhat more. Here's the layout of the place -http://www.edemtakt.ru/other/genplan.gif

GreatArcticBear
12-06-2004, 10:36
Originally posted by IRS_Runner
How about the Aldi and Lidl? they seem to be everywhere in Western-Europe and they are still growing strong.

Their business models are in use here by Dixi, Kopeika, and Avoska - Pyatorichka as well, but rumor has it that they are changing formats.

plastique
12-06-2004, 11:10
I want to open putt-putt golf courses...it seems that anything like that works here...look at all the dolts dragging around prada bowling ball bags...i live down from the golf course and it's always packed on the driving range...would need to figure out how to enclose it in the winter though....

PS..esp. for foreigners here who stay in hotels and dorms, LAUNDRAMATS would rake in so much money!!!! hotels charge a fortune for service.

J.D.
12-06-2004, 11:32
Hey Plast, why not renovate one of those five story Kruchev houses for your putt-putt course. Could be a cheap answer. Anyone know of a vacant one? You could easily make a few rooms into video game rooms maybe go ahead and throw in a few gambling machines - HEY maybe a bar too

Plastic Girl I think you're on to something here.

clemens_cis
12-06-2004, 16:17
Generally speking, i think, isn't it essential to have a russian business partner? the best model might not work without support from local people.

GreatArcticBear
12-06-2004, 16:25
Not necessarily, but Russian management and marketing input is essential (unless you have a mainly expat audience, which is a recipe for disaster nowadays).

plastique
12-06-2004, 22:59
anyone willing to help me develop my little idea? i really think it can work. not to offend anyone here, but anything white trashy back home seems to go over really big here...i'm from the boonies and live just down from a golf course/driving range and i see the cars that pull in there...

gothamcity
15-06-2004, 16:26
You could combine the laundromat with a tanning salon....another proven breadwinner in this market....

Toofuses
15-06-2004, 17:21
Originally posted by plastique
not to offend anyone here, but anything white trashy back home seems to go over really big here...i'm from the boonies and live just down from a golf course/driving range and i see the cars that pull in there... LMFAO!!! I too have noticed the white trash angle...and have yet to see any attempts at marketing US-style trailer housing here. Laugh all you want (I sure am), but they would make GREAT ready-to-move-in dachas, and one of the biggest complaints I've heard from friends and relatives about building a dacha is the damned time it takes, even when done by contractors.

Plus there's the added advantage of Russia having very rarely having tornadoes to knock 'em over.

Sure as hell fits right into the laundromat thing too!

Jose L Piedra
16-06-2004, 03:29
Originally posted by LKKL
Not necessarily, but Russian management and marketing input is essential (unless you have a mainly expat audience, which is a recipe for disaster nowadays).

Plus, in joint ventures, it`s usually the Russian who gets shot when things go wrong. The foreign partner usually got scared MUCH earlier and is on a beach in St Tropez by that time. :D

J.D.
16-06-2004, 08:01
How about 'kit houses' made from panels, styrofoam(pinoplast) sandwiched between two sheets of plywood. There are a few companies around the world that make them but it would be easy enough to produce locally. Stronger than stick houses (American style stud frames) and a very high R factor (insulation). Inexpensive and they go up quite fast.

gadfly
17-06-2004, 19:24
There was an attempt to build trailer homes here in Pereslavl-Zalessky a few years ago; an American company was looking for a Russian partner to do it but I don't know if it ever took off. Home construction companies that offer reasonably priced small homes have taken off, though - I saw some model dachas at VVTs (VDNKh) selling for $10-12k - the company would build it on your lot. A bit like the Poconos.

http://www.rupron.com/static/a00/213.asp


Originally posted by Toofuses
LMFAO!!! I too have noticed the white trash angle...and have yet to see any attempts at marketing US-style trailer housing here. Laugh all you want (I sure am), but they would make GREAT ready-to-move-in dachas, and one of the biggest complaints I've heard from friends and relatives about building a dacha is the damned time it takes, even when done by contractors.

Plus there's the added advantage of Russia having very rarely having tornadoes to knock 'em over.

Sure as hell fits right into the laundromat thing too!

Zephyr
18-06-2004, 09:22
I saw some model homes with traditional Russian construction that were pre fabed by the factory when I was there in ÂÄÍÕ and they were beautiful . I lost touch with them but they were very reasonably priced, I think 15,000$ for three story four room house.

gadfly
19-06-2004, 13:25
Yeah - they were the same ones I saw. I wouldn't mind buying a lot next to the slopes in Yakhroma and putting a $15k house there. You figure you'd pay 60-70 for the lot, House, plumbing/electric, and 'Russian' landscaping (ie none.)

Renting an apartment, getting an internet connection and about four computers with digital cameras and having young sluts come in and strip on commercial sites seems to be good business. You pull in about 400-500 a slut if each one works 8 hour shifts 6 days a week.

IRS_Runner
19-06-2004, 16:43
How about an IPL hair removal salon?
We haven't seen any of the in Moscow, I had to go to Helsinki to have it done :D

gadfly
21-06-2004, 18:22
For that matter, why not sell microwaveable wax strips that women could use to get rid of ugly facial hair?

http://www.artrepublic.com/assets/promotions/kahlo_portrait03.jpg

Zephyr
25-06-2004, 23:27
Originally posted by gadfly
Yeah - they were the same ones I saw. I wouldn't mind buying a lot next to the slopes in Yakhroma and putting a $15k house there. You figure you'd pay 60-70 for the lot, House, plumbing/electric, and 'Russian' landscaping (ie none.)

Renting an apartment, getting an internet connection and about four computers with digital cameras and having young sluts come in and strip on commercial sites seems to be good business. You pull in about 400-500 a slut if each one works 8 hour shifts 6 days a week.
Hell with that kind of income you could import a Mexican landscaper to spruce it up :-)