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Crisis or Opportunity? Changes in Consumer Market in Ukraine

23/ 04/ 2020
  Yesterday, during the online meeting of the European Business Association Consumer Confidence: Responding to the Crisis there was a discussion on shifts in consumer behavior, the current state of retail, the real estate market, changes in the labor market, and re-evaluation of business priorities. View the online-discussion on Facebook First, Natalya Pankratova, CEO of Work.ua, spoke about changes in the labor market. Thus, during the month of quarantine measures, the number of submitted resumes has decreased by 30% (from 80 thousand to 50 thousand), and the number of available vacancies on the site decreased by 2 times. In particular, the search for employees was suspended by companies working in the field of fitness, tourism, hotels, restaurants, etc. The current crisis has not affected the employment in agriculture, logistics. In the context of wages, according to her estimates, there have been no global changes, although, not always wages are indicated in the vacancy description, so it is difficult to say exactly. At the same time, for some categories of workers (drivers, couriers, etc), wages have even increased in certain regions. At the same time, Ms. Pankratova noted that in the early stages of the quarantine there was a concern that employees may enjoy working remotely (this trend lasted the first 10-12 days), however, now almost 60% do not approve of working from home. Increasing demand for online services has had a positive effect on Portmone, a company specialized in remote payment technologies. Thus, according to Svyatoslav Komakha, CEO of Portmone, the number of requests from businesses to connect online payments has increased by 30-40% over the past month. At the same time, there is a growing number of new customers, including the elderly, who pay their first bills online through Portmone, in fact, the company launched a joint project with the Ministry of Digital Transformation to encourage paying for utilities from home. In addition, the number of online transactions has increased, most notably in the fields of delivery, food, internet, television, utilities, etc. At the same time, despite the development of IT and e-services companies, if there is an economic slowdown, the online industries will also decline, but to a lesser extent compared to the offline ones and depending on the category of service. In this context, everyone is affected by the changes. The grocery retail also appears among the winners in the current situation. Thus, Igor Landa, CEO of BT Invest Ukraine, said that the employment situation in the retail sector has become more stable: the flow of staff has decreased, the number of employed people is 25% higher than the number of dismissed people. Retail employers provide their staff with personal protective equipment, lunches, etc. In the context of wages, even if the shops are open for 2 hours less per day, wages are paid to employees in full. He also stressed that the situation clearly demonstrated the disadvantages of shadow employment, since unregistered employees appear to be unprotected at the moment. Besides, Sergii Badritdinov, CEO of Intertop Ukraine reported on dynamics in fashion retail. According to him, the companys revenue has now decreased and sales are being made through the website. At the same time, he considers the current situation to be a good opportunity to establish trust and cooperation between the state and business, and collaboration between businesses. Thus, Intertop has launched a new online fashion platform to help other fashion retailers develop and promote their products. Therefore, Sergii Badritdinov invited business representatives to cooperate. Dmitry Derevitsky, Chairman of the Board of Directors of Allo Group, spoke about consumer sentiment in the market of electronic appliances. As he reported, 20% of stores are currently closed, so the number of online sales is growing. Today, their share of online sales is 56%, but before the quarantine, it was about 40%. Furthermore, the demand for smartphones and electronic appliances fell by about 30%. However, it has increased for home use products (hairdryer, shaving machines), and home fitness equipment. After quarantine, the demand for healthy lifestyle products is expected to increase - smartwatches, trackers, home cooking equipment, and more. The company plans to further develop online services, IT, and marketplaces. The situation in the real estate market was explained by Andrey Vavrysh, CEO of SAGA Development. According to him, this years crisis has some fundamental differences from the 2008 crisis. First, the lasting absence of bank lending led to low market activity. Secondly, international investors are not trying to withdraw funds from Ukraine today, as it was in 2008. Of course, the dynamics and pace of development have fallen. However, the crisis is a good opportunity for new development. So, at present, the market is rethinking the concept of quality for life, environment, etc. For example, more people now choose to live in environmentally friendly places. So, the current transformation process has its positive sides. On behalf of the European Business Association, we thank the speakers for an interesting and intense event with useful insights from their industries!  

Yesterday, during the online meeting of the European Business Association “Consumer Confidence: Responding to the Crisis” there was a discussion on shifts in consumer behavior, the current state of retail, the real estate market, changes in the labor market, and re-evaluation of business priorities.

View the online-discussion on Facebook

First, Natalya Pankratova, CEO of Work.ua, spoke about changes in the labor market. Thus, during the month of quarantine measures, the number of submitted resumes has decreased by 30% (from 80 thousand to 50 thousand), and the number of available vacancies on the site decreased by 2 times. In particular, the search for employees was suspended by companies working in the field of fitness, tourism, hotels, restaurants, etc. The current crisis has not affected the employment in agriculture, logistics. In the context of wages, according to her estimates, there have been no global changes, although, not always wages are indicated in the vacancy description, so it is difficult to say exactly. At the same time, for some categories of workers (drivers, couriers, etc), wages have even increased in certain regions. At the same time, Ms. Pankratova noted that in the early stages of the quarantine there was a concern that employees may enjoy working remotely (this trend lasted the first 10-12 days), however, now almost 60% do not approve of working from home.

Increasing demand for online services has had a positive effect on Portmone, a company specialized in remote payment technologies. Thus, according to Svyatoslav Komakha, CEO of Portmone, the number of requests from businesses to connect online payments has increased by 30-40% over the past month. At the same time, there is a growing number of new customers, including the elderly, who pay their first bills online through Portmone, in fact, the company launched a joint project with the Ministry of Digital Transformation to encourage paying for utilities from home. In addition, the number of online transactions has increased, most notably in the fields of delivery, food, internet, television, utilities, etc. At the same time, despite the development of IT and e-services companies, if there is an economic slowdown, the online industries will also decline, but to a lesser extent compared to the offline ones and depending on the category of service. In this context, everyone is affected by the changes.

The grocery retail also appears among the winners in the current situation. Thus, Igor Landa, CEO of BT Invest Ukraine, said that the employment situation in the retail sector has become more stable: the flow of staff has decreased, the number of employed people is 25% higher than the number of dismissed people. Retail employers provide their staff with personal protective equipment, lunches, etc. In the context of wages, even if the shops are open for 2 hours less per day, wages are paid to employees in full. He also stressed that the situation clearly demonstrated the disadvantages of shadow employment, since unregistered employees appear to be unprotected at the moment.

Besides, Sergii Badritdinov, CEO of Intertop Ukraine reported on dynamics in fashion retail. According to him, the company’s revenue has now decreased and sales are being made through the website. At the same time, he considers the current situation to be a good opportunity to establish trust and cooperation between the state and business, and collaboration between businesses. Thus, Intertop has launched a new online fashion platform to help other fashion retailers develop and promote their products. Therefore, Sergii Badritdinov invited business representatives to cooperate.

Dmitry Derevitsky, Chairman of the Board of Directors of Allo Group, spoke about consumer sentiment in the market of electronic appliances. As he reported, 20% of stores are currently closed, so the number of online sales is growing. Today, their share of online sales is 56%, but before the quarantine, it was about 40%. Furthermore, the demand for smartphones and electronic appliances fell by about 30%. However, it has increased for home use products (hairdryer, shaving machines), and home fitness equipment. After quarantine, the demand for healthy lifestyle products is expected to increase – smartwatches, trackers, home cooking equipment, and more. The company plans to further develop online services, IT, and marketplaces.

The situation in the real estate market was explained by Andrey Vavrysh, CEO of SAGA Development. According to him, this year’s crisis has some fundamental differences from the 2008 crisis. First, the lasting absence of bank lending led to low market activity. Secondly, international investors are not trying to withdraw funds from Ukraine today, as it was in 2008. Of course, the dynamics and pace of development have fallen. However, the crisis is a good opportunity for new development. So, at present, the market is rethinking the concept of quality for life, environment, etc. For example, more people now choose to live in environmentally friendly places. So, the current transformation process has its positive sides.

On behalf of the European Business Association, we thank the speakers for an interesting and intense event with useful insights from their industries!

 

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