Business

Yegor Yaroshenko, FiNN FLARE: “Personal connections are the key to launching in closed European marketplaces”

The FiNN FLARE brand of clothes and accessories from Finland dates back to 1960. The company began selling in Moscow in the mid-1970’s, and in 2003 it opened a separate office there to design clothes that would appeal to Russian consumers. Soon, the company had branded stores nationwide. In 2006, former head of Russian operations Ksenia Ryasova  was named company president. She is the sole owner of FiNN FLARE today. 

The company began exporting clothes and accessories in 2016 and currently sells in 15 European online marketplaces. FiNN FLARE European sales director Yegor Yaroshenko explains what the company has learned and how its team helps other Russian businesses sell abroad.

When and why did you decide to launch export sales?

The Russian market began to narrow in 2016 as global competitors saw opportunities here. We decided that since we were competing successfully with them in Russia, we ought to be able to perform just as well in new markets.

We conducted in-depth research on the markets in Europe and the United States and realized that Germany would be the best place to start because of the similar consumer expectations and weather conditions. So we decided to start with closed e-commerce platforms like OTTO, About You, and Zalando.

Why did you decide not to sell on open marketplaces like Amazon or eBay?

 We felt that we would not be as competitive on platforms with open registration because they are jammed with a huge selection of goods at much lower prices. It would have been hard for us to stand out and grow sales. Another issue is the fact that we release new collections every season. With marketplaces like Amazon, you make money by selling the same exact thing for several years in a row and promoting those same listings over and over again.

Closed marketplaces have buyers who decide whether or not your items are a good fit. This barrier to entry keeps out a lot of the competition.

How did you choose the platforms you wanted to sell on?

We looked at the popularity of the different marketplaces and the companies that were already selling there. But we also kept in mind our own capacity and limitations. Back then, there was no one in Russia to help us launch in Europe. We blazed the trail on our own.

Did you pay for research?

Unfortunately, the research we needed did not exist then. It still doesn’t exist for closed marketplaces. While open marketplaces share extensive sales data, part of the strategy closed marketplaces follow is that they only share limited information on their websites: the number of brands, overall traffic, and prices. 

How did you reach out to marketplaces?

It was a gradual and complicated process. First, we looked for Russian companies that were already selling on those platforms so we could tap into their experience, but they were few and far between. So we started attending forums and networking. That’s how we found our first partners. Today, you can buy our products in 15 European marketplaces. 

Did you do your own marketing for those foreign markets?

Our first sales on the closed platforms were organic. Today, we spend around 5% of our gross sales on marketing within the platforms to keep our listings in the top positions.

We also  have a German Instagram account that brings in new customers, supports our image, and establishes trust in the brand.

What steps does a company in your segment need to take in order to start exporting?

In our case, we needed an entity registered in Europe, so we started with a Finnish company. We also had to open an account in a European bank, because the closed platforms do not use payment systems like Payoneer. 

Did you have to adapt your products for new markets? 

We do not create separate collections for export because our clothes have always been inspired by European trends.

In the beginning, we put out a wide selection that was not very deep just to test and see where demand would be. After a few seasons, we understood the market and our niche.

Not every market sells as much of every time, of course. We sell more brightly colored items in Russia, while the German market prefers more reserved colors like gray, beige, and black.

We also sell more items sized XL and up in Europe where people are less concerned about their body size. They even have separate marketplaces for larger sizes. While we sell larger sizes in Russia, the photo in the listing is almost always going to be of a more traditional size.

FiNN FLARE helps other companies get started exporting. Can you tell us how you do that? 

Once we had learned the ropes, we wanted to do it again from a place of experience. Our team wanted to help other companies avoid our mistakes, so we organized World e-Com as a subsidiary to help brands launch in closed European marketplaces.

Breaking into closed marketplaces is difficult, with many more conditions to meet and stumbling blocks to avoid. Personal connections are crucial, because the buyers reject most of the brands that apply.

How does it work?

There are two ways to sell on a closed platform today: either using an intermediary or through your own legal entity. We help companies with both methods. A lot of things have to happen before your listings show up on the marketplace. First of all, the products have to already be in Europe.

How long does a project like that take?

We believe in doing things right, even if it’s slower. It takes about five months to start selling in a closed marketplace. For comparison, you can start selling on an open platform in about a month.

What kind of support do you give your clients?

 We are an accredited partner of the Russian Export Center and a number of regional centers, including the Mosprom Center for Export Support. In the fall of 2021, we participated in Mosprom’s Buy in Moscow export forum. Small, medium, and large businesses can access government co-financing, including compensation for the cost of a trade show stand and logistics. The first thing we recommend you do if you want to sell abroad is get scored as an exporter and find out what kind of support you qualify for.

Background:

The Mosprom Center, a branch of Moscow’s department of investment and industrial policy, provides personalized support for local medium-sized and large businesses. The experts at the Center analyze target markets for the capital’s manufacturers. In addition, as part of its buyer program, the Center’s experts help local companies find partners and negotiate with potential buyers abroad. They also help exporters participate in international trade shows and business missions.

In 2021, the Mosprom Center’s specialists helped 120 local companies participate in 13 business missions and ten international industry and agro-industry trade shows. Over 1,500 b2b meetings were held at these events.

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