Interview with Pavel Cherkashin. Is the western business model in Russia justified to copy?
I talked with Pavel Cherkashin, Director General for Consumer Strategy and Online Services at Microsoft, about analogous projects, promoting Russian projects abroad and integrating Runet into the world market.
- Today we are witnessing a massive arrival in Runet of strong Western players in various areas (social services Facebook, Twitter, portals - your own MSN, mail - your Hotmail, etc., including specialized and niche ones.) What is the development scenario of this? trends do you see?
- Globally, the Runet is very modest in volume and poorly integrated into the world market, however, it shows good growth dynamics and relatively good potential in the future. As this potential is realized, more and more large world players will come to Russia.
I think we will see the whole variety of scenarios for their development in Russia - there will be aggressive takeovers, strategic partnerships with large Russian companies, and attempts at independent organic growth. While the following scenario is the most common:
1. A global company opens a small office of several people, sometimes without even advertising or advertising this step.
2. Representation is engaged in the study of the market, looking for niches for organic growth
3. At the same time, an analysis of strategic partnerships takes place, where joint development is possible without substantial additional investments from each side. For example, a western partner can provide unique technologies, access to large international advertisers, access to new markets, etc., while the Russian partner provides access to the audience and organizing local sales.
4. Only in the case of successful qualitative progress in the field of organic development or partnership, will a western company begin to consider the possibility of implementing a comprehensive long-term strategy, including active investments.
It is often a misconception that Western companies will buy Russian players if they cannot gain a foothold in the market. In most cases this is not the case. Not understanding the conditions of work in the market and the risks associated with it, a large company rarely decides to make serious investments, unless it is a strategic market like China.
')
- What are the realities, first of all, you need to be ready for Western projects when promoting in Russia?
In general, the Russian market is not much different from most other global markets. The Internet is an open environment, users always have the opportunity to choose, not limited by either administrative or technological barriers. However, as in any other developing country, there are a number of features:
1. Low level of English - a successful service must be presented in Russian
2. A large number of new users - if in 2008 there were about 35 million Internet users in Russia, then by 2012 there will be about 60. The audience actually doubles in just a few years. New users do not have a high level of technical knowledge and do not have specific consumption habits of information - this creates unique conditions for the redistribution of the market
3. Low level of content - most of the existing content on the network is pirated, junk or multiple duplicated. A full-fledged content market is just beginning to take shape as the culture of consumption develops.
- Does the Russian bureaucracy influence the development of foreign online business coming to Russia?
- Of course it does. Most international companies that are developing their presence in new markets, including Russia, adhere to the strict principles of the so-called “zero tolerance” in matters of corruption. This means that any indulgence in these matters, including petty compromises in terms of Russian concepts such as bribes for issuing a passport or agreement with an excessively harmful fire inspector, can cost places and careers for a manager or responsible employee. In the Russian reality, this often creates additional barriers that affect the cost and speed of doing business. This can sometimes become an insurmountable obstacle to market entry.
- Is it justified to copy Western business models in Russia?
From my personal point of view - justified. The Russian market has shown that it is developing steadily with a delay of 3-5 years relative to developed world markets, repeating the same trends. At the same time, new companies developing in the United States and Western Europe usually do not have the capacity to immediately capture the markets of developing countries and concentrate on a limited number of the largest markets. For Russian companies, this creates a unique opportunity to repeat successful business models with minimal risks, while the authors understand the idea.
- As a specialist in the international market, tell me, how do you assess the presence of Russian high technologies in the market? And in general, what are the prospects for Russian projects abroad?
- So far, the presence of Russian innovative companies in global markets is extremely limited. Successful examples can be counted on the fingers. At the same time, Russian specialists work in a huge number of innovative global companies and are highly valued for their unique professionalism, systems thinking and creative approach in engineering tasks.
The situation is unlikely to change drastically until full-fledged conditions for the development of innovative entrepreneurship are created in Russia, i.e. creators and managers of companies will not appear in the country, and not just talented engineers.
- Why is Russian business afraid to develop the Western market, only single projects initially positioned on the global market?
- All for the same reason - there is an abundance of talented programmers and engineers in the country, but an extreme shortage of qualified entrepreneurs and business leaders. The laws of large numbers work in this business - thousands of companies must begin their way to the top every year in order to get a dozen lucky ones up there.
In addition, there is another feature - work in the Western market often implies work "in the shadow." Indeed, if all of your income comes to a US account, employees get paid on a debit card in a US bank, then the Russian fiscal authorities will only harm you too much. In Russia, there are hundreds of thousands of programmers working under this scheme, the turnover of this market is several billion dollars a year. Once on the specialized events of this industry as if crossing the threshold of the underground pub of the times of Prohibition - the fun and joy hides from the casual passerby behind the heavy steel doors.
Not surprisingly, the achievements of this industry are not well known.
- What are the features of promoting online products between countries?
Despite the development of information technology, business is still done between people. You need to know the right people, have a good reputation, be able to communicate and lead relationships in accordance with accepted standards and practices in the region. With his samovar, not everywhere will be received with open arms.
In addition, there are certain cultural characteristics in terms of information consumption in different countries. This is reflected in the specifics of online products. Russia, for example, is the most developed country in the world in terms of user involvement in social media - 70% of Internet users have profiles in social networks (about 40% in the USA). Russians do not trust official sources of information and rely more on the informal opinions of their friends and colleagues. There are also features in terms of paid services. For example, in China, almost 100 million people pay for their presence in the "elite" social networks, to which only people with a certain social level are allowed.
- Today we are witnessing a massive arrival in Runet of strong Western players in various areas (social services Facebook, Twitter, portals - your own MSN, mail - your Hotmail, etc., including specialized and niche ones.) What is the development scenario of this? trends do you see?
- Globally, the Runet is very modest in volume and poorly integrated into the world market, however, it shows good growth dynamics and relatively good potential in the future. As this potential is realized, more and more large world players will come to Russia.
I think we will see the whole variety of scenarios for their development in Russia - there will be aggressive takeovers, strategic partnerships with large Russian companies, and attempts at independent organic growth. While the following scenario is the most common:
1. A global company opens a small office of several people, sometimes without even advertising or advertising this step.
2. Representation is engaged in the study of the market, looking for niches for organic growth
3. At the same time, an analysis of strategic partnerships takes place, where joint development is possible without substantial additional investments from each side. For example, a western partner can provide unique technologies, access to large international advertisers, access to new markets, etc., while the Russian partner provides access to the audience and organizing local sales.
4. Only in the case of successful qualitative progress in the field of organic development or partnership, will a western company begin to consider the possibility of implementing a comprehensive long-term strategy, including active investments.
It is often a misconception that Western companies will buy Russian players if they cannot gain a foothold in the market. In most cases this is not the case. Not understanding the conditions of work in the market and the risks associated with it, a large company rarely decides to make serious investments, unless it is a strategic market like China.
')
- What are the realities, first of all, you need to be ready for Western projects when promoting in Russia?
In general, the Russian market is not much different from most other global markets. The Internet is an open environment, users always have the opportunity to choose, not limited by either administrative or technological barriers. However, as in any other developing country, there are a number of features:
1. Low level of English - a successful service must be presented in Russian
2. A large number of new users - if in 2008 there were about 35 million Internet users in Russia, then by 2012 there will be about 60. The audience actually doubles in just a few years. New users do not have a high level of technical knowledge and do not have specific consumption habits of information - this creates unique conditions for the redistribution of the market
3. Low level of content - most of the existing content on the network is pirated, junk or multiple duplicated. A full-fledged content market is just beginning to take shape as the culture of consumption develops.
- Does the Russian bureaucracy influence the development of foreign online business coming to Russia?
- Of course it does. Most international companies that are developing their presence in new markets, including Russia, adhere to the strict principles of the so-called “zero tolerance” in matters of corruption. This means that any indulgence in these matters, including petty compromises in terms of Russian concepts such as bribes for issuing a passport or agreement with an excessively harmful fire inspector, can cost places and careers for a manager or responsible employee. In the Russian reality, this often creates additional barriers that affect the cost and speed of doing business. This can sometimes become an insurmountable obstacle to market entry.
- Is it justified to copy Western business models in Russia?
From my personal point of view - justified. The Russian market has shown that it is developing steadily with a delay of 3-5 years relative to developed world markets, repeating the same trends. At the same time, new companies developing in the United States and Western Europe usually do not have the capacity to immediately capture the markets of developing countries and concentrate on a limited number of the largest markets. For Russian companies, this creates a unique opportunity to repeat successful business models with minimal risks, while the authors understand the idea.
- As a specialist in the international market, tell me, how do you assess the presence of Russian high technologies in the market? And in general, what are the prospects for Russian projects abroad?
- So far, the presence of Russian innovative companies in global markets is extremely limited. Successful examples can be counted on the fingers. At the same time, Russian specialists work in a huge number of innovative global companies and are highly valued for their unique professionalism, systems thinking and creative approach in engineering tasks.
The situation is unlikely to change drastically until full-fledged conditions for the development of innovative entrepreneurship are created in Russia, i.e. creators and managers of companies will not appear in the country, and not just talented engineers.
- Why is Russian business afraid to develop the Western market, only single projects initially positioned on the global market?
- All for the same reason - there is an abundance of talented programmers and engineers in the country, but an extreme shortage of qualified entrepreneurs and business leaders. The laws of large numbers work in this business - thousands of companies must begin their way to the top every year in order to get a dozen lucky ones up there.
In addition, there is another feature - work in the Western market often implies work "in the shadow." Indeed, if all of your income comes to a US account, employees get paid on a debit card in a US bank, then the Russian fiscal authorities will only harm you too much. In Russia, there are hundreds of thousands of programmers working under this scheme, the turnover of this market is several billion dollars a year. Once on the specialized events of this industry as if crossing the threshold of the underground pub of the times of Prohibition - the fun and joy hides from the casual passerby behind the heavy steel doors.
Not surprisingly, the achievements of this industry are not well known.
- What are the features of promoting online products between countries?
Despite the development of information technology, business is still done between people. You need to know the right people, have a good reputation, be able to communicate and lead relationships in accordance with accepted standards and practices in the region. With his samovar, not everywhere will be received with open arms.
In addition, there are certain cultural characteristics in terms of information consumption in different countries. This is reflected in the specifics of online products. Russia, for example, is the most developed country in the world in terms of user involvement in social media - 70% of Internet users have profiles in social networks (about 40% in the USA). Russians do not trust official sources of information and rely more on the informal opinions of their friends and colleagues. There are also features in terms of paid services. For example, in China, almost 100 million people pay for their presence in the "elite" social networks, to which only people with a certain social level are allowed.
Source: https://habr.com/ru/post/102801/
All Articles