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Business news
Electronics Chain Aims to Better Market Position
08.13.2004 12:21

electronics_telemax ST PETERSBURG TIMES

By Sophia Kornienko


Photo by Alexander Belenky / SPT

Telemax, the leading electronics and household appliances chain in the city, will open three new stores within the next three months.

Telemax, operating 11 stores ranging from 800 to 1,200 square meters in size, will open a new store at 109 Prospekt Veteranov on Saturday, Viktor Vazhagin, general director of the Telemax chain said Thursday at a news conference Thursday.

Two more stores will be launched in September and October, one on Prospekt Engelsa and the other on Ulitsa Butlerova, Vazhagin said. Once Telemax has a total of 14 stores running, it will become the city's leader in terms of its total trade area, amounting to 14,000 square meters.

The chain's owner, St. Petersburg-based Batis, invested a total of $8.5 million into its 14 stores, which are estimated to bring a total of $90 million in revenues this year. Last year's revenues at Telemax amounted to $25 million, Vazhagin said.

Telemax plans to increase the number of stores in its St. Petersburg chain to 25 in 2005. Besides that, some of the existing stores will be moved to more convenient locations, allowing for larger parking areas and better conditioning, conforming to the chain's motto to provide enough space to each customer, Vazhagin said.

Weekly visited by over 50,000 customers, Telemax hopes to increase the number of customers by teaming up with the Pyatyorochka food chain. Pyatyorochka, already sharing one store with Telemax, will continue the same practice at a number of the chain's new outlets.

Telemax occupies 15 percent of the city's electronics and household appliances market, Vazhagin said. Together with its main competitors, Technoshock and Eldorado, as well as two smaller chains - M.Video and Mir Tekhniki - Telemax accounts for 75 percent of the city's market, Vazhagin said.

The chain stores are prepared to squeeze single retail stores dealing in electronics out of the market, Vazhagin said.

"The remaining 25 percent, today occupied by single electronics stores, will be the battlefield where we will cross swords with our competitors," Vazhagin said. The company that organizes its costs management best will win, he said.

While the markup at Telemax is 10 percent to 15 percent - the average markup on household appliances in St. Petersburg's chains - retailers in Moscow add up to 35 percent, Vazhagin said.

Meanwhile, Technoshock's vice president Alexander Rybakov insisted that his chain is in a different category from its competitors. "Telemax and Eldorado are both economy chains, which we are not, but our interests largely overlap when it comes to middle class goods," Rybakov said in a telephone interview Thursday. Technoshock doubled its revenues this year, compared to 2003, reaching nearly $100 million. The chain, owned by St. Petersburg-based Simtex, owns 14 stores in St. Petersburg with a total area of 10,000 square meters.

The market's absolute leader is Eldorado, running over 470 stores in 300 Russian cities, including nine stores in St. Petersburg. Aggressively marketing its low prices, Eldorado targets mass customers. Often crowded and poorly conditioned, Eldorado stores however account for every fourth purchase of household appliances in Russia. The chain's 2003 revenues amounted to $1.35 billion, the company's web-site said.

In the opinion of chain representatives, no single stores will be able to affect the city's strictly structured market - not even Matrix - a giant electronics market, which opened last month at the Gulliver center, opposite Staraya Derevnya metro station.

Matrix, encompassing an area of 10,000 square meters, or two football fields, is the largest household appliances store in Eastern Europe.

Matrix PR manager Vadim Adanin said that MT-Group, the St. Petersburg company that owns both the Mir Tekhniki and the Matrix brands, never meant for Matrix to seriously influence the market. "It was more of an image-making project, which is not connected with Mir Tekhniki," Adanin said.

However, Adanin added, there are plans to make Matrix a chain, by opening more stores both in St. Petersburg and in the rest of the country.

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