Article
ALLO Group during the War
Destroyed stores and supply chains, lack of goods, danger to employees, drop in the number of financially sustainable people – those are the realities that the Ukrainian retail business has faced as a result of the war. Nonetheless, the business continues operating, finds ways to its optimization, and resumes gradually the work of sales points ensuring that the Ukrainians have the most essential things.
Dmytro Derevytskyi, Chairman of the Board of Directors of ALLO Group, has told about challenges of the early days of the war, efforts on arranging new channels for the delivery of goods, and plans for the period after Ukraine’s victory.
ALLO Group is one the largest distributors of digital equipment and household appliances that has both a network of offline stores and a marketplace. Before the beginning of the full-scale invasion, ALLO Group had 340 stores located in 140 cities of Ukraine.
On Losses during the War
In the early days of the war, only about 30 sales points succeeded to be opened, but, gradually, most of them resumed their operations. As at early April, approximately 240 stores of the network were operating. Part of the stores that failed to resume their operations were located in the areas of active hostilities, on the temporarily occupied territories or were ruined.
“We are coming to life to the maximum extent possible. To date, we are focused on ensuring the Company’s sustainability,” says Derevytskyi.
If, as at 24 February, the network employed about 4,000 people, in mid-April, this figure dropped almost twice. More than one hundred of ALLO’s employees serve in the Armed Forces of Ukraine, and we keep their working places for them.
On Transformation of Business and Logistics
One of the greatest challenges faced by us was a complete transformation of logistics. In addition, the Company was exposed to a lack of drivers and employees of warehouse facilities. Gradually, ALLO succeeded in arranging for a supply of goods, first, to offline stores and, then, to fulfill Internet orders.
Since it is impossible now to deliver goods into Ukraine by sea, the Company sends containers from China to the ports of Turkey, Greece, or Romania, where from they are carried by road transport into Ukraine. Certainly, this has its impact on the timing and cost of delivery.
On Changes in Demand
In total, the demand for the majority of commodity categories has moved to average and economy segments. Thanks to this, a share of goods manufactured by the Chinese consumer electronics companies has significantly grown.
Also, the goods are popular that may be useful to the military: disposable cellphones, power banks, and laptops; and the internally displaced people: heaters, boilers, microwave ovens.
On Future Plans
“We are waiting for the victory. We as a multichannel retailer with a well-developed offline network have taken a hit of all the war risks that are not measured anymore by virtual figures, but are quite real,” says Derevytskyi.
According to him, in the future, the Company is going to stake on the development of online retail business. At the same time, it hopes to restore operations of all its stores in all 140 cities of Ukraine and not decrease the number of its sales points. As a result of the war, ALLO have suspended the development of innovation projects, but are planning to return to their pre-war growth development strategies.
Marathon with Ukrainian retail
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