The company Yandex.Lavka, specializing in express delivery of food and household goods, has filed an application for registration of its own brand “From the shop”, and is currently testing own-brand eggs, bottled water, and some dairy products within Moscow.
This could represent a major change in consumer buying behavior, as well as where some products are sourced from.
Market experts suggest that Yandex will use small manufacturers as suppliers in a similar way that competing micro-delivery service Scooter does.
In a press release, Yandex.Food’s PR team told the news website Kommersant that they intend to take their current Moscow test and replicate across the network when ready.
Yandex has commented that:
We are talking about the most popular categories: from chicken eggs to bottled water and dairy products. “We … select manufacturers whose products are checked using tests and focus groups,”
It is estimated that by the end of 2020, the express delivery market for products (within an hour) will grow to 30 billion rubles.
The entire online sales market in the food product segment last year did not exceed 40 billion rubles. By the end of 2020, it is estimated to reach 135 billion rubles.
Analysts have calculated such a sharp increase in the segment due to changes in user behavior and demand, primarily down to the self-isolation regime introduced in many regions during the COVID-19 pandemic.
What the experts have to say
This move from Lavka isn’t new to the Russian market, as other brands have already begun to develop these “dark stores”.
This announcement from Yandex Lavka has been met with expert opinion from the world of Russian retail, highlighting that whilst this move may impact the industry and it’s competition, the road ahead to both growth and gaining market share isn’t straight forward and is fraught with challenges.
Kirill Rodin, co-founder of the food chain “Kitchen in the District”:
Quality control of STM (own-brand) products and flexibility are the most problematic in the development of their brands.
Maria Zhebit, National Union of Milk Producers:
Customer loyalty to specific brands is now becoming increasingly important and it is argued that STMs will force other products out of the market prematurely. Manufacturers have a margin, and in the case of STMs, it is often lower than working with their own brands.
Vyacheslav Bocharov, founder of Samokat:
The attitude of customers to the service will also depend on the quality of products under their own brand.
Earlier this month, we reported that Yandex had launched a sole smartphone application for Lavka, including smart recommendations.