UKRAINE: Land of Opportunities

Trade Mission Odessa, September 2012By Juraj SEBO and Aad Weening

• World Internet users: 2.4 bn to reach 3.5 billion in 2015

• Global e-Spend 2011: $969billion (set to double in 5 years)

• Mobile Commerce will reach 20% of total e-sales this year

• BRIC countries to lead (Brazil, Russia, India, China): e-Sales up 500% since

2007; China’s e-sales 2012 will grow with 88%, India plus 50%, Russia plus

35% and Brazil plus 30%

• Watch the MIKT countries: Mexico, Indonesia, (South) Korea and Turkey!

• And....the CIVETS countries: Columbia, Indonesia, Vietnam, Egypt, Turkey

and South Africa

• Global e-Shoppers to reach 1 bn in 2012, more than tripled since 2005

• Integration of tradional and digital media

Global Online Trends

Global e-Commerce View

Source: IMRG estimates, IMRG Global B2C e-Commerce Overview 2011

2012 2011 2012/2011

USA $355bn $311bn +15%

Europe $390bn $343bn +20%

Asia Pacific $290bn $220bn +35%

Latin America $55bn $43bn +30%

MENA $14.5bn €10bn +45%

World $1,160bn $969bn +20%

NOTE: estimated average annual rate of exchange EUR/USD: 1.25 for 2012; down from 1.3920 in 2011

Estimated Annual Increase Ukraine: +/- 50% Y-on-Y

Identifying Markets

* Mature markets in USA & Western Europe: growth per annum between 10 and 15%

* Southern Europe catching up: led by Italy and Spain, growth per annum around 30 to 40 %, Turkey coming up fast!

* Emerging markets in Eastern Europe, led by Russia, followed by Poland and Ukraine, growth per annum (safely) estimated at 35 - 50%

* Asia-Pacific: fastest growing region; China: 88% up in 2012 and a shift from C2C to B2C. India plus 50% expected in 2012, more (local) retailers online

* MENA(P) countries coming up, led by Israel & UAE, growing around 45% per year

* Latin America coming up fast, led by Brazil with 60% of total B2C e-sales, followed by Mexico, Argentina, Caribbean and Columbia. Growth rate around 30%

* Africa still in its infancy, led by Egypt & South Africa

Online Issues

* Trust & Confidence: trust marks like Trusted Shops

* Increasing Offer: retailers online, getting local businesses online

* Ordering: availability

* Delivery Options: Standard, 24/48 hours, @Home, Click & Collect, address systems

*Payment: Security & Options; moving from a “cash-oriented” society to digital payments

* Returns, setting up a reliable and trusted return system is essential

UA Country Facts and Figures

KEY FIGURES UkraineArea: 603,550 km2

3rd largest and the 7th most populated of EuropeCurrency: Hryvnia (UAH)

Population 2012: 45,6 millionMen: 46,1%

Women: 53,9%Retail Sales 2012: €90bn (e)

Up: 16% (e)B2C e-Sales 2012: €1,100mn(e)Internet Users 2011: 18 million

% of population: 39,5%Spend per user: €40

Facebook Users: 2,004,420Penetration: 4,4%Ranking: #63/213

Internet Domain: .uaDialling Code: +380

Economy: % growth GDP

Source: IMF

2010 2011 2012 2013

USA 3,0 1,7 2,0 2,3

Euro Zone 1,9 1,5 -0,4 0,7

C&E Europe 4,5 5,3 1,9 2,8

Russia 4,3 4,3 4,0 3,9

Poland 3,9 4,4 2,6 3,2

Ukraine 4,1 5,2 3,0 3,5

UA Internet Users

million

0.2

5.0

15.018.0

30.0

2000Linear (2000)2005201020112016

2016: estimate 65% of the population

estimate: 66% buys online

48% of UA Consumers likely to shop online

Entering the UA Market

A distance selling company or an online retailer can enter the Ukrainian market in two ways:

• Consignmentno certification needed with some exceptions and no customs duty and no VAT longer delivery period

• Direct Importfaster delivery, but certification needed and customs duties and VAT will be charged

The following slide shows the number of parcels sent via Slovakia: Y-on-Y a healthy growth

Volume of items forwarded to Ukraine

Thank you very much for your kind attention

Juraj Sebo: sebo.juraj1@gmail.comAad Weening: aad.weening@imrg.org