Russia gets a second female billionaire

Russia gets a second female billionaire
Russia gets a second female billionaire, Tatyana Bakalchuk, the founder and owner of Russia's biggest online store Wildberries
By Ben Aris in Berlin February 21, 2019

Moscow has more billionaires per square kilometre than any other city in Europe, but they are almost all men. Almost. But not quite.

Until this year Russia has had only one female billionaire – Elena Baturina, who made her money in Moscow’s construction sector in the wild 90s.

An impressive figure and astute businesswoman, but by an odd coincidence her husband was Moscow mayor Yuri Luzhkov, who also was in charge of handing out building permissions in the capital and managed a city budget the size of New York’s for more than decade.

Luzhkov was replaced by Sergei Sobyanin in 2010 and has retired to Latvia where he keeps bees.

Now there is a second female billionaire, who hasn’t needed the sort of luck that made Baturina rich.

According to the calculations of the Russian issue of Forbes, the owner of Russia’s largest online store Wildberries Tatyana Bakalchuk has seen her fortune rise from $600mn last year to break the magical barrier and top $1bn this year.

Tatyana Bakalchuk, the owner and founder of Russia's biggest online store Wildberries, is Russia's second female billionaire. 

It should be emphasised that the valuation is only an estimate by the magazine as Wildberries is not a listed company (yet) and so the writers at Forbes are still guessing. But it is unlikely they are far off the mark.

The online retailer is doing very well indeed in Russia’s burgeoning e-commerce sector with an audience of over 60mn people a month, $1.7bn in revenue, and is investing into a 150% expansion of its pickup point network.

Founded by Bakalchuk in 2004 with her husband Vladislav, the company has ridden the wave of Russia’s ballooning volume of online sales. Last year Wildberries was the biggest online retailer in Russia for the third year in a row.

Wildberries is expecting to earn RUB120bn ($1.8bn) in 2018, a surge of 74% year-on-year, Kommersant daily said on December 17 citing the representatives of the company.

"This figure would make Wildberries the leading e-commerce operator in Russia for the third consecutive year and the largest online retailer overall," VTB Capital commented on December 17. The store focuses on non-food categories and covers 1.5mn stock keeping units (SKUs) from 10,500 suppliers, the bank said.

Wildberries expects the number of orders to almost double to 80mn in 2018, attributing the growth to expanding the assortment, including with premium brands. Analysts surveyed by Kommersant link the fast expansion of the online retailer to the creation of the federal delivery chain, increasing the assortment, and engaging new audiences, including TV ads.

Like many other retailers in its niche, Wildberries started out selling women's clothing from the German Otto and Quelle catalogues, but has since branched out to cover kids clothes, shoes, accessories, books, sport, electronics and home & dacha, to name a few of the categories.

Analysts say that one of the things that keeps Wildberries in the lead is the effort and investment it has put into its distribution system. The company’s main rival is Ozon Holdings where growth is being held back by an inadequate fulfilment system.

And the growth in Bakalchuk’s wealth is unlikely to stop there. The volume  of sales of Russia’s e-commerce grew 19% in 2018 to RUB1.15bn in Russian stores and another RUB348bn that was spent in foreign online stores, up 29%.

Russia’s e-commerce is only starting to mature now and still has plenty of growing room. According to research conducted by the global market research company Nielsen, 90% of Russians have made at least one online purchase in the last ten years as a result of a growing consumer trust in online stores.

And according to the Russian Association for Electronic Communications, almost two-thirds of the domestic e-commerce increase last year was delivered by growth at Wildberries and Ozon between them.