Ozon (company)

Ozon is one of the first e-commerce companies in Russia, sometimes referred to as "the Amazon of Russia."[1][2][3] Established in 1998 as an online bookstore, by 2019 Ozon was one of the three biggest online retail platforms in the country.[4] In 2019 it was named one of the top-5 most valuable Russian internet companies by Forbes.[5]

Ozon.ru
TypePublic company
NASDAQ: OZON
IndustryE-commerce, technology, retail
Founded1998 (1998)
Headquarters
Moscow
,
Russia
Area served
Russia
Key people
  • Alexander Shulgin (CEO)
  • Daniil Fedorov (CFO)
Revenue60,104,000,000 Russian ruble (2019) 
−78,716,000,000 Russian ruble (2019) 
−19,363,000,000 Russian ruble (2019) 
Total assets38,435,000,000 Russian ruble (2019) 
Number of employees
12,000 (2020) 
Websitecorporate.ozon.ru

Ozon is part of Ozon Group, which also owns the online travel booking platform Ozon.Travel and a stake in Russia's largest digital bookstore Litres.[6][7] The current CEO of Ozon is Alexander Shulgin, who joined the company after serving as CFO and later COO of Yandex.[8][9]

In October 2020 it was reported that Ozon plans to hold an IPO in the United States that could value the company at $3-5 billion.[10] In November 2020, Ozon went public on the Nasdaq in an IPO that valued the company at $6.2 billion.[11]

History

Ozon.ru was established in 1998 as an online bookseller by the Russian software house Reksoft. The company soon expanded its assortment to CDs and DVDs before going on to sell a wide range of goods from clothing to electronics.[12] In 2012, it acquired the shoe seller Sapato.ru and sold it in 2015 to the online fashion retailer KupiVIP.[13] In 2014, it acquired a stake in Litres, the leader in Russia's e-book market.[14]

Leadership

After a series of Russian CEOs, in 2005 Ozon appointed Bernard Lukey, who had advised the company on behalf of Baring Vostok.[15] In 2011 Maelle Gavet became the new CEO of Ozon.[16][17] During her tenure, the firm worked to popularize e-commerce in the mainly cash-based Russian retail market.[18][19] Gavet stepped down as CEO in 2015; her deputy Danny Perekalsky was appointed successor.[20] Since 2017 the CEO of has been Alexander Shulgin, the former CFO and COO of the Russian tech company Yandex.[21][22]

Funding

In 1999, ru-Net Holdings, founded by Leonid Boguslavsky along with the Western Baring Vostok Group, UFG and Rex Capital, purchased a controlling stake in the company for $3 million.[23] In 2000, Baring Vostok became a controlling shareholder after investing $3 million into the company. In 2007, Ozon raised $18 million in a funding round led by the Geneva-based Index Ventures.[24] In 2011, Ozon attracted $100 million in investment from Japanese e-commerce company Rakuten, Boguslavsky's ru-Net and others, [25][26] followed by another $150 million funding deal with the Russian conglomerate Sistema and the Russian mobile operator MTS in 2014.[27][28] MTS and Baring Vostok invested another $92 million into Ozon in 2018.[29] In 2019, Boguslavsky sold his share in Ozon to the company's main shareholders, Baring Vostok and Sistema, for $70 million.[30]

In 2019 Ozon secured a $150 million round of financing with the participation of U.S. venture capital firm Princeville Capital, in what was reported to be one of the largest Russian tech investment deals involving Western backers since 2014.[31][32]

Financial performance

Ozon reported a "hypergrowth" stage in 2019 as sales for the year increased by 93% to $1.1 billion and the volume of orders more than doubled to 32.2 million.[33] Company turnover by gross merchandise volume (GMV) grew 188% year on year in the second quarter of 2020 and reached RUB 77.4 billion by H12020, an increase of 152% from the same period in the previous year. According to Ozon CFO Daniil Fedorov, the coronavirus pandemic created a new habit of shopping online among Russian consumers.[34]

Products and services

Ozon offers more than 5 million products in more than 20 product categories including clothing, groceries, home goods and electronics.[35] After a large incresse in the available assortment, the volume of orders more than doubled in 2019 to 32.2 million.[36]

In early 2019, the company launched a service called Ozon.Invest that grants loans to small and medium-sized businesses that sell their products on the Ozon marketplace.[37] Ozon was also the first online retailer in Russia to launch consumer loans for multi-category online purchases, as well as its own debit card with a cashback feature.[38][39]

Ozon has been operating a marketplace platform for third-party sellers since 2018.[40] In June 2020, the marketplace had more than 13,000 sellers who accounted for more than 85% of the assortment on the site.[41]

Supply chain and delivery

Ozon developed its own fulfillment infrastructure to deliver orders in Russia's 11 time zones. In 2018 the company had seven fulfillment centers in the Moscow region as well as St. Petersburg, Tver, Kazan, Ekaterinburg, Rostov-On-Don and Novosibirsk.[42] It more than doubled its fulfilment capacity in 2019 to almost 200,000 sqm, as well as investing in its last-mile delivery infrastructure.[43]

The company operates its own delivery logistics platform and has a network of over 16,000 pickup points, including automated parcel lockers across Russia, .[44][45] The use of brick-and-mortar pickup points where customers can pick up their orders arose out of a lack of reliable third-party delivery services in many parts of Russia.[46] In 2019, Ozon launched an express grocery delivery service in Moscow, [47] and rolled out its contactless home delivery service, which became a popular option during the coronavirus pandemic in the spring of 2020.[48]

In March 2020, Ozon announced plans to spend more than $300 million to expand its logistics in advance of a potential IPO.[49]

COVID-19 pandemic

Ozon reported record sales growth during the coronavirus pandemic, as quarantine measures in Russia drove more people to shop online.[50][51] During the crisis, the company capped prices on the most sought-after goods to prevent price gouging by marketplace sellers and expanded its contactless home delivery service to limit the spread of infection.[52] In July 2020, Ozon and four other Russian retailers commissioned a monument to delivery workers who continued to work during lockdown in Moscow.[53][54]

References
  1. "The Amazon of Russia Is Building Its Own UPS—While Battling the Black Market". Wired. 2014-05-30. ISSN 1059-1028. Retrieved 2020-09-04.
  2. "Ozon: Russia's Answer To Amazon Prepares For Clouds, Won't Tackle 'Kindle' Soon, Says CEO". TechCrunch. Retrieved 2020-09-04.
  3. "Sistema Interested in Buying Ozon Stake". Wall Street Journal. 2013-11-26. ISSN 0099-9660. Retrieved 2020-09-07.
  4. Aris, Ben (2019-09-10). "Ozon Battling It Out for E-Commerce Supremacy in Russia". The Moscow Times. Retrieved 2020-09-04.
  5. "20 самых дорогих компаний Рунета — 2019. Рейтинг Forbes". Forbes.ru (in Russian). Retrieved 2020-09-04.
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  7. May 9, Adrien Henni |; 2019 (2019-05-09). "Russian online retailer Ozon plans a tenfold logistic expansion after record growth". Digital Commerce 360. Retrieved 2020-09-04.CS1 maint: numeric names: authors list (link)
  8. "Alexander Shulgin, Internet Solutions OOO: Profile and Biography". Bloomberg.com. Retrieved 2020-09-08.
  9. "Yandex appoints CFO Shulgin in charge of Russian business". TASS. Retrieved 2020-09-08.
  10. Kantchev, Georgi (2020-10-01). "Russian Online Retailer Ozon Group Prepares American IPO". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-10-21.
  11. "Russia Online Retailer Ozon Raises $990 Million in U.S. IPO". Bloomberg.com. 2020-11-24. Retrieved 2020-11-25.
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