There was a book entitled the Unwomanly Face of War, so what about the business world, Tatyana?
I’m not in a position to speak on behalf of the whole world. I should say that in Russia, sexism is not a very serious issue. Perhaps, it’s an asset inherited from the Soviet era, when women were not prohibited from building careers and dedicating themselves to a favorable pursuit. Indeed, so many representatives of what was once called the weaker sex rose to the positions of school directors, CEOs of farm cooperatives and industrial plants…
I’d disagree. Women were free to climb the career ladder only to a certain level, but the top managerial positions were held by men. Besides, in all fairness, we should acknowledge that there weren’t any private businesses during the Soviet era.
Maybe you’ve got a point there… In 2018, I was invited to a reception given by the French ambassador, Sylvie Bermann. She gathered Russia’s eminent women – public figures, politicians, entrepreneurs, and journalists. Gender inequality in society in general and especially in business was on the agenda. I felt very surprised: in Wildberries your ability to do your job right and your initiative are the sole qualities that really matter. If both are OK, then there are no impediments to professional growth. Regardless of whether you are a man or a woman.
As far as Russia’s business community is concerned, in recent years, I’ve seen many women build successful careers and rise to top positions in their companies.
But the word ‘businesswoman’ still sounds somewhat exotic to the Russian ear.
It’s borrowed from a foreign language, isn’t it? In our language much has been borrowed that doesn’t contain any female forms. Say, author, conductor or composer. Take Anna Akhmatova. Who was she – a poet or a poetess?
The same with business.
Forbes has a special magazine about businesswomen… Incidentally, have you ever paid attention to your neighbors on the list of Russia’s wealthiest women? Yelena Baturina, Tatyana Kovalchyuk, Yelena Timchenko, Liliya Rotenberg, Yelena Rybolovleva…
I’m not acquainted with any of them personally. Just recently, I bumped into Olga Belyavtseva, who created the Frutonyanya (Fruity Nanny) line of baby food products. She’s on the Forbes top ten, if I’m not mistaken. We discussed possible cooperation.
What I’m trying to say is very often talented businesswomen in this country are the wives of their successful husbands, or spouses of governors, mayors and government ministers. In this respect, your success story is quite unusual.
In a sense… A line on Forbes top list is a yardstick of success in business around the world, but in Russia many are not very positive about this ranking. Sometime ago, I was even invited to take part in a debate on whether it would make sense to restart the list from scratch and compile another one consisting of truly self-made personalities who really deserve other people’s respect and pride.
I do not know, whether this may be possible in principle, if people believe this. For the time being, certainly not. I’ve noticed this when it comes to myself. I can compare the way people react today and their response last year, when Wildberries was called a unicorn company.
I think that this description of us is not very correct.
The term unicorn is used with regard to startups that managed to use venture capital to make a billion dollars in a very short period of time, in order to achieve this level of capitalization.
But we had no venture investment to build up from, we earned the money. Wildberries is not about stock market capitalization.
What I’m trying to say is different, though. I immediately noticed changes in other people’s attitude as soon as they saw my name on the top of the richest women’s list published by the Russian edition of Forbes. As if that was not an honor or award, but a label. There was a shower of negative comments, although in 2019, when we were proclaimed a unicorn company, everybody felt very happy and hurried to congratulate us. What changed? Didn’t it look logical back last year when the company was bound to keep growing and the leader of the Forbes list was going to change?
Did you feel changes in the attitude of other people during personal contacts?
I’ve always kept in touch with people I know very well. Lately, the list of my contacts has grown considerably, but I’m very fortunate to meet mostly nice people and interesting conversation partners.
The reaction of young women trying themselves out in business was unexpected. Many have been telling me in person and in the posts they upload to the Internet that they are really proud of me. It is very unusual but very, very pleasant.
Do you know the Korean language, Tatyana? Or possibly did somebody read Korean fairy tales to you when you were a little girl? Is there a Cinderella type of character who eventually turned into a princess?
Regrettably, I do not know the language, and as far as I know, there is no such character in Korean folklore. At least, to my recollection. Frankly speaking, my parents do not know the language of their ancestors very well. They lived in Russia all their lives and I was born here.
What brought you to the Moscow Region?
My mother graduated from a teachers’ training institute in the Chechen capital of Grozny as a primary school teacher. My father finished school in Kazakhstan and then went to Leningrad to enroll in the institute of communications engineering…
Honestly, I’m not in the habit of talking about myself or my family. I believe the focus should be on the company, and not on the personality of its boss.
But don’t you want to reply to skeptics who do not believe that it is possible to build a big business from scratch. Honestly, I have no idea myself of how this was possible. Once upon a time, there was a young woman, an ordinary tutor, who gave birth to a child and then, while on maternity leave, she got the idea of earning some money. She tried and all of a sudden created a business that is now worth one billion dollars (not rubles).
First of all, this did not happen overnight. It took 15 years…
Then let’s start the story from the very beginning. In 1992, a teenage girl graduated from a secondary school near Moscow with honors and enrolled in a Moscow regional institute, and not in the capital city. Your institute was in Kolomna, wasn’t it?
At first, I thought of applying to Moscow State University’s journalism department. I even attended long-distance courses. But after the collapse of the Soviet Union in 1991 my mother talked me out of going to Moscow. She was afraid of letting me go there, where I would be entirely on my own, and not without a reason.
Those days were quite difficult.
Are you the only child in the family?
There are three of us. I’m the eldest. My choice of Kolomna was because I would not have to go very far away from home. My mother advised me to try the department of philology, which would eventually enable me seek a job in the media. I opted for the department of foreign languages, although the quality of English language instruction in my school left much to be desired. In high school, we had a very good teacher, though. I’m very grateful to her for the knowledge she shared with us and for encouraging me to apply to the foreign languages department and to not fear flunking the exams. Any experience is valuable, she said.
During the first term, I had a very hard time. I was very nervous, because I was not sure I would be able to cope with the first set of exams, but my parents had taught me to never give up. Eventually, I pulled through and performed well.
Upon graduation, I worked as a teacher for one year and then moved to Moscow. I thought I needed to pursue another higher education degree and master some applied profession. But then the August 1998 default erupted, the ruble collapsed and I had to change my plans.
A couple of years ago, I took a designer course for a while only to realize that this is not exactly what I would like to devote myself to. I quit. Perhaps, I’d picked a wrong course…
In 2000, I experienced a deep existential crisis. I was at a loss as to where I should go and what I should do. It was a dramatic moment. Very often, obedient children who excel at school grow up and mature very late. Puberty strikes after 20 years of age. You suddenly realize that the meaning of life is not about rising to somebody else’s expectations, but to do what you would like to do yourself. Then the search for your own identity and your destiny begins.
I really don’t know how to best explain it. From the very first day I went to school, I knew that I would graduate with good marks, then get into an institute or university and obtain a college diploma, then I’d find a prestigious job, meet a man I’d fall in love with and give birth to a child… In other words, my life’s schedule had been shaped for many years ahead and my sole task was not to go astray and not to let my loved ones down.
In the early 2000s, I began to waver. Not suddenly, though. I’d been brought up in the Soviet Union, and I sincerely believed in the triumph of Communism. But then it turned out that nothing of the sort was to materialize, and I’d have to live entirely on my own. Many of my peers came apart at the seams. Some lives were ruined. I believe that this happened because as we grew up and matured, we witnessed the collapse of one country and the birth pangs of another one. We had no idea what we should be striving for and nobody was able to help us somehow. Our parents were plunged into the same chaos. Everything collapsed in the blink of an eye. The previous system of values had vanished.
I was trying hard to find a goal and to realize what I should dedicate my life to. I decided to take a break for some time. I took time out to think. I was not in the mood to do what others were expecting of me anymore. I even shut off contacts with my family. Then I left my job to become a freelance tutor to earn a living. And I never stopped looking for the meaning of life.
I tried self-awareness practices and astrology. I read a lot and started working for a small newly-founded publishing business as a translator. I became fond of Richard Bach’s books, in particular, Richard Livingston Seagull.
And how long did that last?
Until the moment when I realized that my own future was in my hands, and when I shaped my values in life. Then I met Vladislav. We got married six weeks later. I can say that some drastic turn occurred inside me, and I got back to a normal lifestyle.
I turns out that your husband and you think alike.
Vladislav went through his own period of soul searching and re-examining himself and the world around him. He dropped out of his institute for about one year. He lectured students on German philosophy and listened to classical music…
Apparently, we do not quite fit the cookie-cutter image of a business personality, but I am certain that whatever you may be doing in life it should be grounded in clear convictions and principles to rely on.
My colleagues say that I have a very strong feeling of empathy. If I see that something goes wrong, I’ll immediately say: enough, we’ll never do anything like that again, that is not right. I always get very emotional when the company is accused of something unfairly. If it deserves criticism, I get upset just as strongly, but we rush to make amends.
Some say that Wildberries works with small and mid-sized businesses better than with many others, that we create the most favorable conditions for them. This is true, but just recently it turned out that in striving to fully automate the process of interaction with suppliers and minimize possible risks during checks, we probably came close to perfection, however, the process of connecting a new partner has become very complicated and requires not only time and nerves, but ongoing consultations with our support line. There are instances when a new provider has to resort to the services of some commercial “navigator”.
In the end, we completely fine-tuned the system. Now it is enough for any business to key in the individual taxpayer number, legal address and the CEO’s name on our website to obtain registration. The whole procedure lasts five to seven minutes. Before, various questionnaires had to be filled out along with a large number of various documents, extracts and certificates attached… As a matter of fact, a new partner had to go through a real quest to start doing business with us.
We were not the ones who established these rules. The company is checked by the tax service. Our accounting office is obliged to comply with certain requirements. The pandemic forced us change the whole system, which yielded swift results. That said, in April, the growth in the number of new providers was seven times higher than a year ago, and in May, nine times higher. That’s a huge leap forward.
The sales of many of our partners have been steadily rising despite the crisis. I dream of living to see the day when a large share of our GDP will be formed not by the export of oil and gas, but by small and medium businesses and growth in real production, including light industry.
Last year, we toured Russia’s regions a lot and were able to see changes for the better in some places. In fact, just recently I heard many say that manufacturing clothes and footwear in Russia is possible. However, that’s not so for children’s toys, because factories need special plastics that are not made in this country. Now it turns out that plastics are starting to be made here, too.
I wish to explain to people that they are capable of making money on their own. They should not wait for anyone or anything; they should just go and do it. And I see many more people who are prepared to create something themselves.
Last year, I flew to France where I emerged as the winner of the Veuve Clicquot Business Woman Award contest. There were many competitors from around the world. The French hosts were complaining that in their country women who wish to start a business on their own are far rarer than men. Only 42% of young women are ready to open their own businesses upon graduating from university, while among young men the rate is far higher.
As I sat there listening to all this, I thought that given the domestic realities, 40% of young women eager to go in business would’ve been an incredibly high rate. It would be very good if one-fifth of all young people in Russia attempted to try themselves out in business after college. Some are afraid of going broke. Others have no idea what to start with. Those who manage to break through do so against the rules, without counting on anybody’s help.
How did you make up your mind, Tatyana?
I can’t say that I had plans to start a business. I didn’t spend any time on delving into what is to be done to create a business project that would eventually grow into something big. There was nothing like that. I moved forward subconsciously, with only my intuition to count on. And I never formulated my ideas out loud.
Why did I decide to create an online retailer? Vladislav had a small company in Moscow. He had registered it together with a friend. First, they tried to sell computers, but it made no profit. Then, they became Internet providers and spent sometime laying networks in Moscow’s southeast.
Our family budget was always tight. I tried to get back to freelancing as a tutor. I gave classes to students at home, with my little daughter crying now and then in another room. I felt uneasy all the time and my state of mind affected the students. In a word, the idea didn’t pan out. As I recall now, I was very upset that I was unable to help my husband to support the family. Psychologically, I was down and out. And I also experienced postnatal depression. Many women are familiar with this. In particular, this occurs after their first child is born. You wait for it to happen. You get prepared. You feel anxious. At last, the baby is born and the young woman goes a bit crazy…
I still recall the feeling I had then. For some reason, I always felt uneasy when visiting department stores. Salespeople approach you with advice and offers, though you may not like a particular item. Still, another does not match your style. But how can you say this? These people try really hard to do their job as best as they can, while you are just being snobbish. Or, still worse, somebody may think you don’t have the money to pay for it. What a shame! Though it’s true we barely made ends meet back then.
So, I stopped to think if there can be a way of buying things without visiting department stores. I realized that I was not the only one with such problems.
I tried to sell things online. Many of the people I knew tried to talk me out of it, claiming it was a bad idea. Nobody would agree to buy anything without trying clothes on.
I decided to take the risk. I had no clear concept or any business plan. I was acting on my own intuition. Vladislav referred me to his friend, a programmer, who created an online retailer website for 700 dollars. Frontend and backend, as some would now say. There appeared an opportunity to take orders. Then we placed our first add on a portal for women and slowly but surely, clients started trickling in…
Did you focus on goods from Western catalogues from the outset?
No, first I thought I would be selling things that I’d buy from some factory. Let me say once again, I had no detailed business idea. At times, Vladislav would clue me in on what to do. Usually, he would say something like: “Don’t do this. That idea is silly. It’s doomed to fail.” Then I’d go and think up something else.
One day, I recalled my student years. For me and all the other girls I knew, a trip to Moscow was always a great occasion. At the institute, we studied foreign languages and as soon as we got our hands on French and German catalogues, we started ordering things we could find there. The office that accepted the orders was near Pushkin Square. So, we used to go there, make an order and leave a prepayment. In about a month, we’d get a note in the mailbox that the order had been delivered. We would pick up the parcel and head home. I still remember how happy we were when beautiful things, as beautiful as those in the catalogue pictures were ours at last. Besides, things that were purchased that way cost far less than at regular shops.
That’s how I got the idea of working with catalogues. A standard pattern. I contacted some French partners from 3 Suisses. As soon as I did, they went bankrupt and were sold to Otto. Then, I had to start building bridges with the Germans.
I’ve read some place that the first orders were delivered to your home address?
At first, I had to use public transport to pick up the orders.
First, I would take the subway across town. Fortunately, the ride was along a direct Metro line. Following the subway ride, I’d hop on a bus and then I’d walk a bit. I’d pick up the parcels at some warehouse and then go back home.
Did you have an apartment of your own back then?
No, we rented one. At one point, we had to sell our car and could not afford to buy another for some time. We used my father’s when we needed it. And we rented an apartment next door to Vladislav’s office.
I would bring the orders there and phone my clients to let them know the item had been delivered. Quite often, I used to get this reply: “Very good. Send your deliveryman to this address.” So, I’d take the parcels and bring it to the clients myself. I was also a messenger running errands.
And who was looking after your daughter all that time?
Grandma. My mother.
My advice to everybody is to never make the mistakes I’ve made. All your steps should be calculated beforehand. Fortunately, this period in my life did not last long… I recall the day when we received three orders at once. What a joy that was!
I made up my mind from the very beginning that I would not be charging prepayment. Nobody had done anything like that before. And I set the agent’s commission at 10% for all, while in Moscow the standard rate was 15%, and the farther away from Moscow, the higher the rate was. I thought that it would be fair, if people were charged the same rate whether they were in the center of Russia, or in Yuzhno-Sakhalinsk.
I did everything myself for some time until Vladislav told me: “Stop fiddling with the parcels until three o’clock in the morning. Hire some college student to help you.” I invited my younger sister and then one of Vladislav’s female staffers. But the orders started ballooning, and we could no longer manage on our own. All of our relatives and friends had to be asked to help us out. My father had retired on pension by then, but he agreed to work for us when we registered as a limited liability company. My aunt became the accountant. Almost all of our relatives extended a helping hand.
Wildberries began to pick up steam.
By the way, where does the name come from?
We wanted to have something stunning and unusual. I liked violet very much. At first our website was all violet, whatever page you opened. However, in 2006, when we decided to redesign the website, marketing specialists explained that this color should be avoided by all means, because it is aggressive and unreadable. White, they suggested, would be far better.
Yet, I kept looking for something violet. The word wildberries caught my eye immediately. It’s the color of blueberries and blackberries. Alas, this name drew objections, too, at first. My colleagues criticized it for a long time. It’s too hard to pronounce in Russian, they argued.
We registered the web domain. For a while it was in the ads. Now everybody has gotten used to it and that says that my choice was good and that Wildberries sounds fine and it is easily recognizable.
Have you resorted to external financial assistance to get the company going and bolster publicity?
No. I can tell you that in 2006, Vladislav sold his share in the joint business to his partner. All proceeds from that transaction were invested into the company. I won’t tell you exactly how much. Three or four million rubles, something like that. Nothing astronomical. But the money helped us a lot then.
By 2009, when the first serious crisis erupted, we’d already gained a firm foothold and buyers made it pretty clear that Wildberries is really serious. Ours has been mostly female clientele and it remains so. Both young girls and ladies of various ages are in the habit of making themselves nice little presents from time to time. First you order some beautiful thing for yourself and then spend two or three months waiting and looking forward to it. It’s like some sort of entertainment and psychotherapy.
Shopping is a great cure for boredom.
Precisely. The past few months saw soaring demand for lipstick. I’ve read some place that the first time this phenomenon was observed was a little less than 100 years ago. During the Great Depression in the United States, industrial production slumped by 50%, yet the sales of cosmetics soared. An economic crisis forces people to refrain from spending on expensive items, but they still can afford some little joys in life. A lovely means for struggling against emotional stress! There’s even a special term for it – the lipstick effect…
Now back to the previous subject. We felt that people began to consider e-commerce as a real alternative to visiting shopping malls or department stores. Nevertheless, it was a great challenge to achieve a 100-percent service level, yet the catalogues were unable to provide such a guarantee. We started searching for solutions and eventually turned to the distributors of famous European brands that were available in Russia at that time.
At first, they looked down on us. Who are you? An online retailer? What is it you would like to purchase? When we mentioned the approximate turnover that we hoped to achieve by selling their brand, and then their attitude drastically changed.
In fairness, I must admit that other problems popped up on the way. We had to work on arranging photo sessions to create attractive pictures of the clothes on offer. I must confess that the first snapshots were awful…
Some manufacturers began to provide their products under deferred payment or on only a small prepayment. The 2009 economic crisis turned out to be helpful in a sense. Some major brands finally set their eyes on the Internet. Everybody was eager to do business with Wildberries. We managed to hire many employees. Also, we rented a large facility which we used as our office and a warehouse at the same time. We worked there for nine years.
The facility is in Milkovo, a suburban village outside the Russian capital, right?
Yes, two kilometers away from the Moscow Automobile Ring Road, MKAD. We relocated all of our assets, including goods and wooden racks, there to see that only one-twentieth of the floorspace was occupied… I remember some wisecracks like: “Let’s play football here.” In less than a year, the hangar was packed to capacity and was already too small for us…
So that was the day when the ugly duckling transformed into a beautiful swan.
As I’ve already told you, there was no magic transformation. It all happened gradually, without any fairy tale miracles. We built our company entirely on our own. Step by step. From the very first moment we set out to create the best service for our clients. Then, we drastically revised the pattern of our work with providers. This allows me to look each of them in the eye openly and frankly. I have nothing to be ashamed of.
In 2019, we decided to slash our commission from 38% to 15%. It was a risky decision to make. We feared what would happen if it did not work. The net effect was great. We managed to grow, because we let people earn more.
Also, we introduced free delivery in the same way, although we were accused of changing the market forever.
Did you resort to dumping policies?
There was a hectic situation. Online commerce was booming. Everybody wanted to get a bigger piece of the market. Many companies jumped into the game. Some offered free delivery for three days, and others for one week. Marketing specialists were chasing each other trying to see what the competitors were doing. All this impeded the normal business process.
We got together, made some calculations and decided: let’s offer free delivery for three months, for the whole summer, and never get back to this issue again. We did as we planned. Then it turned out that everything went well and we experienced no slump. On the contrary, the flow of orders climbed. So we made free delivery permanent.
Now, we have a vast and diversified network and outlets all over the country. The pandemic has forced us to make some adjustments, but only temporary ones. We’ve put an emphasis on logistics. There were no other options left. We tried to cooperate with the market leaders, but their quality was unsatisfactory. If you are not responsible for all the processes, there can be no chance that you can guarantee the result. There is no certainty they will do everything the right way. It is not enough to deliver an item to the recipient. The client must have an opportunity to try the purchase on. The delivery agent must be prepared to wait and, if something is wrong, or if the client does not like the purchase, to take it back and return it to us. For those companies engaged only in logistics, this is totally unreal. They are not in the habit of working this way.
We had to fine-tune our own system across the country. We opened our first remote outlet in St. Petersburg. This city is in a class by itself. There is no other place like it…
Could you go into further detail about that, please?
People there buy things in a different way, so to say. For instance, St. Petersburg’s residents don’t like to see delivery service personnel in their homes. Although it might seem very convenient… these sorts of subtle aspects cannot be forecast in advance. We had to play it by ear.
Another logistic facility opened only six months later in Vladivostok.
But in the following six months, we managed to spread out to nearly all of Russia’s big cities. As soon as we gained experience, we covered the whole country.
And all that was done with your own money, correct?
Yes. This explains why we had to work so fast. Otherwise we would have not managed financially.
In 2010, we had the first proposal from a large investment fund that asked us to sell a stake in Wildberries. We refused. We said that such deals are of no interest to us. We would like to develop on our own.
The company’s position has not changed since.
Of course, it is impossible to carry on without borrowing altogether. We had a CFO who once remarked that although Wildberries does not need any loans today, a cash gap would emerge inevitably when there are too many orders. So it is better to take loans for the sole purpose of building a credit history.
Since then we’ve been cooperating with the banks and actively using such instruments as guarantees or short-term loans, but we always stay alert and make sure that we do not end up drowning in debt. Loans account for about half of our monthly turnover. This risk is absolutely normal. Opening pickup retail outlets costs money. Just as the acquisition of motor vehicles and the construction of warehouses. We decided against taking out investment loans. We use the banks to cover operating expenses only. It would be correct to say that we live and work only by virtue of our own money…
Ours is a profitable business and it has always been so. We cannot afford to operate at a loss. This is one of the key rules for the company’s success that we’ve painstakingly adhered to for the 16th year in a row.
What is the business model that many startups prefer to use (not only in Russia, but around the world)? A business is established and investors are invited. At first, the company operates at a loss for a rather long time. But the company grows and so does its capitalization. Then there follows another round of talks with the investors and so on and so forth, indefinitely. This mode of operation is not for us. I’m making no comments, I’m not saying what is good or what is bad. We are different.
Wildberries did not become a billion-dollar business overnight. We grew gradually.
Now you are Russia’s biggest online retailer. You’ve enjoyed this status for the past four years. What’s next, Tatyana?
In 2020, we ventured into Europe. First, we went in business in Poland and in May we started sales in Slovakia. We’ll try to compete with our EU counterparts.
In reality, we are very eager to help the Russian manufacturer. We do believe that this is possible. We are ready to furnish support to small and mid-sized businesses in order to let our fellow citizens make competitive products.
Do you believe that this is the right moment for it?
These aren’t easy days for businesses, and not only for them. There is no denying that but people are slowly getting adjusted to the situation and they are looking for and finding ways out. On the one hand, foreign currency exchange rates have risen, but on the other, goods produced in this country have become more competitive in Europe, for instance. We see this as a window of opportunity for growth. People are more eager to start businesses of their own.
Of course, support from the federal government and the regional authorities is essential. It is hard for me to make comparisons, because I began to contact civil servants relatively recently, but I can see that among them there are many forward-thinking people, who have an open mind and are aware that businesses should be helped to develop and that a company’s size and turnover do not matter. At the level of the country’s leadership changes are in progress and the process of decision-making is being accelerated. For instance, the digitization program has received a powerful boost.
We, too, make many things simpler and easier. A qualitative leap forward is imminent. I do believe in this.
I’ve directly addressed the country’s top officials with a request for supporting the development of a network of technoparks for manufacturing light industry products. We are prepared to invest from 2.5 billion rubles to 7.5 billion rubles into each of them.
Have you changed a lot in your operations due to the pandemic?
The past few months saw a major breakthrough in development, which enabled us to cardinally reform a number of business processes.
What is it about?
Look. We believe we are an advanced IT company. On the other hand, our HR office procedures have remained in a near-primordial state. Wildberries’ HR department has long experienced some problems due to a process that’s drowning in red tape, but nobody took care of it in earnest. All of a sudden, we had to higher personnel for our logistic facilities and to build up the capacity of our delivery services. Mind you, all that had to be done in the context of teleworking. We had to rearrange the existing system and to take a fresh look at it from a different angle.
The most difficult thing is to overcome an entrenched mindset.
For some reason, many think that the e-commerce segment hasn’t experienced any pandemic-related hindrances. It seems that the government had no doubts that our sector would keep on working as usual.
In the meantime, on the morning of March 28, when the lockdown was declared, endless phone calls came flooding into the Wildberries head office from all of Russia’s largest cities. People were trying to understand what they were expected to do. In the next two or three weeks, all of the company’s services and departments, including developers, worked non-stop.
Difficulties arose also due to the fact that at the onset of the lockdown, 90% of all orders were taken away by our customers at pick-up points, and there was practically no prepayment. Our prepayment rate was less than one percent, while some of our counterparts in the online commerce segment had a rate of prepayment close to 40%.
We coped and weathered the storm.
You even announced that you would be prepared to temporarily hire those who lost jobs in other companies.
Yes, it’s a classical win-win affair. Many of our partners started complaining they were forced to fire people because they did not know how to keep them employed. On the contrary, we felt we needed more employees. I had a word with some counterparts in various retail chains and suggested pooling efforts. I do not know how long this will last, but for now the effects are positive.
The pandemic accelerated many processes and forced everybody to get moving.
We’d made a decision beforehand that in 2020 we would highlight domestic tourism. It would be wonderful if people started touring their own country! We will certainly bring this issue to the fore again as soon as the situation permits. For the time being, we’ve launched lectures, master classes and other online products, for instance, those concerning fitness, education, rest and leisure, and healthy diets.
We’ve discovered that 60%-70% of those self-employed do not have this status officially, because they pay no taxes, although they keep working. If they begin to cooperate with us officially, then they will automatically emerge from the shadows. This will be very important for the national economy…
During the height of the lockdown– in April and May – we hired more than 20,000 people – 8,000 of them on a temporary basis and the others, on a permanent basis. And not just for our delivery service and distribution centers. The IT staff has grown in strength, too.
Has the pandemic affected the range of goods Wildberries has to offer?
We’ve sold sanitizers, medical masks and medical gloves for quite a long time. However, in March, the demand for them skyrocketed. We began asking the providers if they had the items in stock and told them to come and sell. Yet, certain shortages occurred. Say, 100,000 masks would be gone within a matter of two hours.
We did our best to make such situations as rare as possible. We also controlled prices. We were obliged to see to it the providers do not overcharge prices. As soon as we noticed the price was unduly high, the provider was blocked. Profiteering on such items is impermissible.
We purchased one million masks in China, chartered a flight, brought them to Russia and distributed them to hospitals, volunteer organizations and charities, free of charge, naturally. Just like an ambulance we bought for a substation in Podolsk.
Tatyana, when did you realize that this coronavirus was really serious and would stick around?
I won’t say that we’d been perfectly prepared for all possible scenarios. Such things cannot be foreseen in principle. But we had the feeling that the pandemic would come to Russia at some point, so we starting changing the logistics system as early as February.
Approximately 90% of all of our orders were delivered from one warehouse in the Moscow Region. That was a major weakness and a potential risk. We hurried to rent other facilities around the Russian capital.
Also, we tried to test a new system of shipping. The measure was not very well timed and made business somewhat harder. But we managed in the end.
When did I realize the threat as a mother and a wife? Possibly with the introduction of passes. Suddenly, it occurred to me that ordinary shopping to buy food may become a problem. We decided to create a small emergency reserve. I confess that I have a box of canned stewed beef and another one with packs of buckwheat at home.
Incidentally, where do you go shopping?
Most of my purchases are from Wildberries. And I get the rest at shopping centers and supermarkets.
Are you entitled to a personal discount as the company’s CEO?
Mine is the same as that of all other employees. And it does not differ from the maximum discount of a permanent client.
How many people are working for your company at the moment?
Around 50,000, and at the end of 2019, there were slightly more than 30,000. This growth is considerable.
I’ve heard that many employees come and go due to the harsh system of fines.
We can take a look at the HR statistics, and you will see for yourself that the turnover of employees is not very high. True, jobs may be hard there where physical work prevails. But Wildberries has many young girls and adult women.
We introduced the trendy KPI parameter eight years ago, if not earlier. The company then had a staff of 5,000. We realized that to achieve greater effectiveness, each one should spare no effort at work. People should know that the quality of their work determines their wages and that their earnings depend on their performance.
As for the mandatory eight-hour working day, this rule applies to those who do office work, while everybody else has other criteria in the business process. Wildberries has always paid wages and salaries above the market. This is true for the call center, the warehouse staff and the delivery personnel.
Did your sales seriously slump when you stopped accepting cash payments in the spring?
At first, yes. Since recently the company Data Insight has been gathering information from everybody and building weekly charts. When we made the decision, the sales curve took a steep dive. Only to recover virtually in no time. At first, many people were outraged. Not so much because they were unable to pay with cash, but because the fitting rooms were closed. Some were demanding their “legitimate right” should be restored, although strictly speaking it is our own knowhow. You won’t find such an option anywhere else.
Then everybody calmed down, as soon as it became clear that we just took care of the health of our clients and sales personnel. At the beginning of June, when the coronavirus epidemic situation permitted, the fitting rooms began to reopen.
Has the lockdown changed your daily routine a lot?
I had to stay at home from March till June, which I think feels quite strange. Last year, I took many trips.
In general, after speaking with my colleagues and friends, I concluded that everybody basically had the same scenario. The endless Zoom video conferences with a chance of only having a glass of water between them and the low mobility, because you literally were glued to the office chair. In the past, at least you could stand up and walk around the office to attend a business meeting.
And how have you managed to cope with four kids?
They tried to arrange their daily routine on their own. My younger daughter was not very successful in all respects, so I felt obliged to give advice and assist her from time to time. Distance learning is a daunting task! Spending 45 minutes in front of the PC monitor is way harder than attending an ordinary lesson in a classroom. Also, you have to switch between programs and applications, because there were many self-study assignments… I reckon that the parents of all schoolkids had the same experience. In any case, whoever I ask, everybody tells me they’ve had the same problems.
Naturally, without my mom and my nanny I would’ve failed.
Do you still rent an apartment?
Yes, it’s a principle of our lifestyle. We cannot stay at one place for too long. We pick up and move once every three or four years. For a while, we lived near the office in Milkovo. Then we moved. The environment there is not very friendly. The MKAD expressway is nearby. A construction boom began. And traffic jams are an eternal problem…
When we settled down at a new place, we even started thinking about buying a plot of land. The price was reasonable, below the market. There was a forest nearby, but a friend of ours talked us out of it, saying: “What do you need this hole in the wall for?”
And we realized once and for all that we need permanent change. This is a way of tapping into energy.
As soon as Vladislav and I got married, some relatives gave us advice, they said: “Tanya, you are going to have a baby soon. You should think strategically. Apply for a mortgage and buy a studio apartment. You’ll have housing of your own.” As I listened to such recommendations, I kept asking myself: what’s the point of buying a studio apartment with a mortgage?
My husband and I teach our kids that it is very wrong to spend your life pursuing material wealth. I call it subconscious consumerism. I don’t know how appropriate this term is, though.
Of course, I now regret that I did not spend more time with my kids when they were younger. I’m really sorry about that! Also, I can see my own mistakes I made when bringing them up. My girls still complain: “There were years when we did not see you and dad for weeks.”
Although we lived within a 5-10-minute walk away from the office…
The girls have grown now, but we had the first normal family holiday two years ago. Before that we’d managed only to spend three or four days in Sochi to go Alpine skiing. Or we might take either daughter to Europe for a weekend.
Then do you have at least a rented house on Rublyovskoye shosse, like most of our VIPs?
No, we do not need it. And I hope that there are many other people like us. A new class of people has emerged with a totally different set of values in life.
Health. Sports. Impressions. Travel.
And it absolutely does not matter how much money you make.
I would like to teach my children the right ideas about life and ensure that they never face the problems I had to grow up with.
Will you explain, please?
My childhood and youth were overshadowed by the understanding that I’m not like everybody else. My nationality and looks stand out right away.
Many people around us viewed my parents as sort of strange people. Not only because they looked different. They were regarded as strangers and aliens, although I must repeat that they were born and grew up in Russia. Perhaps, it was just a wrong impression, but in my childhood I used to get very anxious and upset over this sort of bias.
Now, I understand that without those problems, Wildberries might have never come to be. These types of tests in life make us stronger.
Sometimes, I feel somewhat uneasy that everything goes like clockwork in the lives of our kids. We take care of them, we let them do many things, and we never impose prohibitions. I strongly oppose excessive taboos. Say, if my son gets into a puddle, I won’t stop him. I'll let him roll around in the mud and get dirty from head to toe. It is most important to make sure that he doesn’t catch a cold or hurt himself. Yet my mother says this is wrong. And she brought me up accordingly. I’m for greater freedom and trust. Psychological traumas should be avoided by all means.
Naturally, I want to see my children show their potential, to achieve something important, but for that they will have to make up their own mind regarding the basic principles in life. Remember Karen Shakhnazarov’s comedy drama Messenger Boy? At the end of the film the main character, Ivan the teenager asks his pal: “Do you have a dream?” The other guy says: “My dream is to buy a warm coat.” Then Ivan takes off his coat, gives it away to his friend and says: “Here you are. Have it. And do dream about something great.”
I wouldn’t say I’m an ideal person. All sorts of things happen in life. I like to hear other people say nice things about our company and point to it as an example to follow. And I feel terribly upset when we are criticized. In particular, when we do not deserve it. When slapped on one cheek, I won’t turn the other. I will try to retaliate.
Also, I always seek to remain my own self, and not be arrogant or a show-off. We now have an office driver. We hired him five months ago. It was my colleagues’ persistent demand. They said that I needed a personal driver for security reasons. Previously, I used to take taxis. It’s been a long time since I was in the driver’s seat, because I’d gotten into two traffic accidents.
Also, I have a personal aide. My colleagues persuaded me that this was essential to make the business process more effective. Last year, there were far more business meetings and flights. My schedule was far tighter. I realized that I wasn’t using my time rationally enough.
I had to acknowledge that it would be better for the company and for myself, so I agreed to have a female assistant.
And still I feel terribly awkward when something is done for me personally. For this reason, we’ve created a special support service for office employees. It’s a very simple one for the time being, but I hope that we will upgrade it functionally and make it available not just to the head office.
There’s still a question about your dreams that remains to be answered. I’ve already realized that it’s not a new coat…
It would be great if people were able to live forever and never get sick.
It’s utopian. An earthly paradise.
I do know this can never be, but you’ve asked me about a dream, haven’t you? One should always seek something great and good. Then something will come of it. I feel that we are moving in the right direction. If there are many people in the country who can do what they like and earn money from it, a lot of problems will vanish. Life is easier when you are happy. Together they will be able to think up something nice and useful and strive forward. Our job is to assist and create conditions for doing business and for achieving a better life. Sounds like a slogan, but you see my point, I hope.
When was the last time you cried, Tatyana?
When doctors said that a close relative was seriously ill… I feel I can manage to cope with my own problems myself, but I get really terrified when the lives of my relatives and children are at stake. Certain things are beyond our power…
Generally, I’m a strong person. Women are stronger than men in principle. I’ve been a tough nut to crack as far back as I can remember myself. During my college years, I had a hard time. It was immensely difficult, but that didn’t get me down. My pride did not let me give up my studies, although you will agree it is hard to wake up at five each morning, go to another city, study there for a whole day and then go to bed at one in the morning…
And I had to struggle by the sweat of my brow to build the company. At first, there were eons of problems, but I realized that had I quit, had I given up then, there would have been no Wildberries. In the end, I got up and pushed ahead.
What are your personal ambitions today?
I don’t quite understand what you are asking me about. Let’s say I certainly do not want my family name to become a brand. I enjoy a tranquil life. What’s the point of extra discomfort that publicity generates? Today, I can go to any place without worrying that somebody might recognize me. Being in the public eye a great deal is neither good for the family, nor for the kids. I hope that they maintain tranquility in their lives.
I do have some short-term goals. For instance, I’d like to run in a marathon.
What else? The company certainly needs new horizons, that’s clear. If you stop developing and growing then somebody else will beat you to the punch. Ours is a highly competitive market. There is no chance of stopping. We wish to become number one in e-commerce in Europe.
Do you ever compare yourself to Amazon or Alibaba?
Never. They are different companies. Each makes its own contribution to the market.
Can we say that you believe IPO prospects are unimportant?
We see no sense in it.
Would you like the company to remain a family enterprise, to see your children inherit it?
I hope my children do what they like, what they find really exciting. Of course, it might be great, if some of them agreed to work for Wildberries, but it remains to be seen whether my son or my daughter will be able to run the company. You’ve got to mature to a state that will enable you take a certain position. Appointing a person to a senior post is not enough.
Besides, any business should exist as long as it yields benefits. When it turns old and obsolete, a different direction has to be chosen. You’ve got to roll with the punches.
Tatyana, what will you do once we finish this interview?
I’ll go and… have some yogurt beverage, what we call kefir. It so happened that I’ve had 24 hours of unexpected fasting, which is a means of cleansing the body. Now is the right moment to end it. When I was fond of esoteric practices, I could refrain from eating for two days in a row. There are different cleansing methods. Sometimes I use them.
And then I’ll go and see another episode of The Lord of the Rings in the company of my family. We’ve gathered in front of the TV for several evenings in a row.
Also, I read bedtime stories to my son. This time it will be Paddington Bear. And my girls adored books by two women authors – Astrid Lindgren and Anne Katherine Westley. I try to treat my son to something different. He is a boy after all.
To tell you honestly, I still love books for children and I read them again and again. During the lockdown, I intentionally read only Scandinavian children’s literature. It’s like some type of psychotherapy. Everything around was in turmoil, while the world these books describe is calm and reasonable.
Even the gloomiest events can elicit some positive conclusions. That’s how I prefer to see life.