Russian e-retailer Ozon caps prices for the most sought-after goods to prevent gouging

Russian e-retailer Ozon caps prices for the most sought-after goods to prevent gouging
Ozon capped prices of on the most sought after goods, citing social responsibility in a time of crisis
By bne IntelliNews March 20, 2020

One of Russia’s “big three” online retailers Ozon Holdings announced that it was capping the prices of essential goods that are currently in high demand to prevent manufacturers gouging customers. 

Russia currently has only 199 confirmed coronavirus (COVID-19) cases and one death, but supermarkets have been emptied as the population in Moscow and other big cities anticipate being put on lockdown. Russian shoppers have moved online en masse for their daily esentials and groceries.

“In these conditions, multi-category e-commerce sites have become, for many, the most convenient place to order all of their necessary goods. As a result, Ozon has seen an increase in demand over the past 1.5 weeks, with sales of everyday products more than doubling and sales of personal care products growing by a factor of 3 or more,” Ozon CEO Alexander Shulgin said in a statement. “The company also offers 2 types of contactless delivery options, whose popularity is rapidly growing: over the past week, the number of door deliveries increased by 60-70%, while the use of parcel lockers increased by another 20%.”

Afraid of panic buying spreading to the online stores, the company has adopted several practices to ensure shoppers have access to goods. As Ozon operates a marketplace, a channel where manufacturers can reach a large audience, the manufacturers retain control over prices. Ozon has moved to prevent its partners from gouging their customers.

“In the current situation, it is especially important to maintain quality service and fair prices,” said Ozon marketplace director Anna Kaleeva. “Marketplace sellers already account for more than 70% of Ozon’s assortment, and we have unfortunately seen massive attempts to take advantage of the increased demand and the mood created by the current information field. Therefore, in addition to monitoring prices 24/7, we decided to limit the maximum price threshold for the most popular goods. We sent out an informational letter to the more than 9,000 sellers on our site and warned that they may face penalties in the event of violations.”

Over the past 48 hours, the company has blocked several hundred product cards from dozens of companies on its platform. If Ozon’s monitoring system detects a violation of the maximum price, then the site blocks those goods. If the seller continues to ignore the rules, Ozon may block all of their products on the site.

The company has also moved quickly to block product cards with inflated prices that have been brought to Ozon’s attention by customers via social networks. To do so, individuals can send Ozon a private message through its public pages on Facebook, VKontakte and Instagram.

In its letter to sellers, Ozon has asked sellers working from their warehouse to carefully monitor the situation if the warehouse is closed for quarantine. Marketplace partners are asked to mark the entire period during which their warehouse will close as days off in their personal account on the site, in order to give customers a better understanding of the possible delivery time for their orders.