KupiVIP: Russia’s Online Destination For High End Fashion
Offering designer labels and brand name goods at a discount, the Russian site and one of the stars of Russian business, KupiVIP has just secured a new round of funding for a total of $38 million. With more than 8 million registered users, Russia’s premiere online luxury shopping club KupiVIP holds online flash sales every day that offer their goods at significantly discounted prices.
The new round of investment was led by the investment arm of Intel.
Expansion Within Russia
With this round of funding, KupiVIP looks to continue to expand within the Russian and Turkish markets, both of which include a growing middle class who are continuing to connect online more via broadband and both of which have a growing population who have a strong appetite for high end clothing, accessories, and lifestyle products.
“We have only just started to exploit the enormous opportunity the Russian consumer market offers to international brands. With this new investment, we are delighted to get the support we need to build a world class e-commerce company,” said 29 year old CEO and co-founder Oskar Hartmann.
Hartmann, 29, has a reputation for being disciplined and open-minded. In 2010, Hartmann and French entrepreneur Pascal Clément started the internet business incubator Fast Lane Ventures. FLV, described by some as a “Western Style” internet investment company, has launched as many as 18 new internet companies including a TV and online tele-shopping company.
In late April, Hartmann mentioned the possibility of an IPO although those plans may not be pursued in light of news that other Russian companies have also delayed similar plans due to lack of success.
Record Funding And The Future
This round of funding follows 14 months after it had announced $55 million in investments which is still the record for the most money invested in an e-commerce company in Russia.
Also, bypassing the Russian postal service all together, KupiVIP uses its own delivery vehicles and drivers to deliver the goods to customer’s doors. After the customer has tried on the goods, the money for the products is paid directly to the driver. This investment in logistics and infrastructure has been a key component in the company’s advantage in the market.
Additional expansion includes creating new websites to the existing flash sales site, a full price sales site, and a white label-business. With these expansions in mind, Hartmann says that KupiVIP is expected to earn $300 million this year, surpassing last year’s $200 million.
Russia has seen a fast growing market and this, combined with entrepreneurs like Hartmann will hopefully prove fertile ground for Russian business. Hartmann’s critics say that he isn’t truly revolutionizing Russian business as his companies are modeled after Western businesses like Amazon.
This may or may not be the case but it’s not necessarily a reason not to support an entrepreneur like Hartmann whose innovation includes solving logistics issues specific to Russia.