Major Russian express operator Pony Express is growing over 30% this year thanks to flourishinge-commerce operations and new services, a senior executive said.
“When setting up our business plan for this year, our outlook was rather pessimistic with anexpected growth of around 20% but we can now see that we have surpassed these expectations despitesome negative tendencies like the economic crisis etc,” Pony Express Deputy General Director AdilSuleimanov told CEP-Research in an interview at the Post-Expo in Brussels last month.
In certain regions including cities such as St. Petersburg, Nizhniy Novgorod, Yekaterinburg andthe Far East, growth rates are even higher than for the country as a whole, Suleimanov explained. “There are various cities showing growth rates of 50-60% in terms of sales and operations.” Thecompany does not release volume or revenue figures.
Suleimanov said that most of the projects planned last year have been implemented by now. One ofthose is time-definite delivery with options including delivery before 10 am, 1 pm and 6 pm. Hestressed that Pony Express is providing the same geographical coverage as DHL, the market leader. “It doesn’t have to be delivered next day. It can be delivered on the second day, but before 10 am,for example.”
Pony Express is increasingly focusing on distance trade and expanding its activities in thisfield, for example, by adding all the cities where it is present to cover the entire Russianterritory. The new service called ‘Delivery from internet shops’ is specifically tailored tocustomers’ needs with the provision of warehousing facilities, packaging material, delivery sevendays a week, among others.
In addition, the company provides warehousing space for e-commerce players in all Russiancities. These are so-called ‘mini-hubs’ fully operated by Pony Express. The company started theservice last year but has meanwhile expanded the range of cities where it is available. Thisservice is especially successful in Kazakhstan where Pony Express is the first company on themarket to provide an e-commerce solution with cash-on-delivery option and no competition.
“One of our clients is a major Russian online retailer Lamoda trading with clothes, shoes etc.Within Russia, it uses delivery solutions of several carriers but in Kazakstan we are their onlydelivery provider,” Suleimanov revealed.
In Kazakhstan, Pony Express also launched a warehousing logistics solution with state-of-the-artequipment. “The solution itself is not new but it hasn’t existed in Kazakhstan before.” The companyalso offers pallets and box storage including permanent and temporary storage.
Also in the Central Asian country, Pony Express is currently developing a solution for archivinghardcopy and documents. “If the solution turns out to be a success in Kazakhstan, it will beextended to Russia as well,” Suleimanov predicted. He explained that office space is quiteexpensive and customers can outsource their documents for archiving to Pony Express and get themdelivered on request while paying for the storage only.
As part of its service diversification, Pony Express is actively expanding its visa business andhas become the exclusive representative of the Polish embassy this year. “We have opened 37 visacentres on the Russian territory where we accept documents for visas to Poland. This is a big stepforward for us and it has been reported all over the Russian media. On this basis, we will befurther expanding this visa service. China is an interesting country for us in this field. We arealso in negotiations in several CIS countries including Kazakhstan, Uzbekistan and Kyrgysztan tooffer them our visa service using our network.” Currently, Pony Express has contracts with theembassies of China, USA, Canada, Latvia, Estonia, Ukraine, Singapore, Cyprus, Korea and Japan.
Apart from Kazakhstan, the company is active on the Ukrainian market as well with the launch oftime-definite delivery and 50% growth in the country’s domestic market.
Suleimanov confirmed that the company is growing faster than the overall express market inRussia as was the case last year but added that the exact figures have not yet been analysed.
Asked about the impact of the economic crisis in general, he admitted that the Russian markethas been affected by it. “However, we don’t feel it for now and no budget cuts have beenimplemented so far.”
In future, Pony Express wants to focus increasingly on imports for internet shops from abroaddue to very high demand and is now considering different ways of cooperation. “We want to expandthis niche actively as the demand for exports to Russia is booming, especially in China, Europe andthe USA.”
Looking ahead, Suleimanov expects the company’s growth to reach 35-40% by the end of this yearcompared to 2011 even surpassing the current figure of over 30%. He explained that after the ratherquiet months of July and August an active season started again in September. “We expect asuccessful end of the year.”
In terms of international operations, Suleimanov said that the company is open for cooperationsbut is not actively working on expanding its network abroad. He said that there are some projectsin the pipeline that are targeted towards international expansion but declined to disclose any ofthose yet. But he stressed that the main focus remains on expanding in the CIS countries.
In terms of competition, he admitted that SPSR is the company’s main competitor in the regionsbut not in the main markets including Moscow which holds around 65% of the whole Russian market. Healso named DPD as a competitor and the leader in freight transportation between Russia andKazakhstan.
Celebrating its 20th anniversary this year, Pony Express employs over 3,000 staff serving 9,000destinations in Russia and the CIS countries and 218 international destinations with a fleet of 750vehicles. It operates 40 branch offices across Russia and has subsidiaries with offices inKazakhstan, Ukraine and Armenia and over 145 regional representatives.
