Existination of the railway in the auto parts market

A minute of surrealism. Abandoned railway crossing in a remote Siberian village. Almost midway between Vladivostok and Moscow. The double red traffic light flashes dimly. The sound signal for a year already does not work. Towards each other, dissecting the snow dust, approach the goods. One of them consists almost entirely of JelderExpedition containers. On some you can see the logo Exist.ru. Another structure belongs to the HCV group and everywhere their brand is flaunted, as well as the IsNext.ru logo. Both carry all kinds of auto parts to warehouses and from warehouses - orders in online stores. Somehow miraculously lost in Siberia, Vladislav Domoratsky stops on his car before this move. He looks at this railway coincidence. And at the moment when one logo for a split second equals another, Domoratsky thinks in emptiness: "And if they go one way, who will win? HCN is a partner of RZD or ZheldorEx - a protégé of Alfa Group? Nonsense Still, it's good that I left "
 
 
Existination of the railway in the auto parts market
 
 
Now this is exactly different a photo. Or not? CJSC - the oldest of all found "Exxists" under the direction of Domoratsky - 1997). Which also gave the name of a chain of shops. However, the philosophical name is beneficial for any enterprise - be it the online store of underwear "Stoicism" or the beer bar around the corner "Sophistry" - even all lowland takes on a deeper meaning (if you think about it for a long time). The existential philosophy approached auto parts, maybe a little more.
 
 
At first, the "existentials" did everything themselves, even by customs clearance. But after they received 25 stamps in one piece of paper because of the lost part, they decided at least to delegate the customs clearance to the broker.
 
 
Turnover of $ 300k was not easy ("hoods on the humps!"), But quickly. There was a question of the first expansion, which was solved soon after falling into the close bumper office on the client. The client was not injured, but the company prudently moved.
 
 
The site Exist.ru appeared in 1999. Prior to its introduction, Exist had very sophisticated requirements for staff. Workers had to understand English or German at the level of the auto parts catalog, know by heart the device of any car, and also be able to transfer this knowledge and understanding in digestible form to a client who came to the office and explained the order on the fingers or (much worse) by phone.
 
 
Most of the employees who passed Exist's first school worked there until 2016. There were programmers who automated the internal sales process. They also took the initiative - they made the site. Domoratsky took it as a fashion, despite the fact that it was possible to take orders through the site - and this is an additional sales channel. The first six months did not even notice that the site exists. But the fact (the main fact that predetermined the split of business) that the site and the trademark were decorated, except for Domoratsky, on the trio of programmers, hardly speaks of the blindness of the owner. Rather, his gratitude to the team for their work. Otherwise, he would not have divided the already existing business into several hundred thousand with his managers - Maxim Martynov and Alexei Belov. That's why the most successful programmers of the company - Yuri Bukovnikov, Valery Chikin and Yury Polyakov - also became co-owners of Exist, more precisely of its information technology side ( .A + aExist-Info LLC ).
 
 

 
Source: rusprofile.ru
 
 
In two years the site has become more than just an additional sales channel. The digitized catalogs were uploaded there, the buyer was able to place an order online, and also track up to 97 transactions in his personal account with his order. And everything happened again on time - when the flow of customers stopped growing, because it was impossible to deal with the existing ones. The process of actively dragging customers online has begun. By 201? the site processed 2 million requests a day and issued more than 100 million offers for details. In 200? the company Exist already had an annual turnover of $ 6 million
 
 
In the same 200? regional expansion began. There are two explanations for the fact that Exist did not need third-party investments. The first is the highest margin on the part. The second is a franchise. The lack of the desire to open their own representation in every region has, as it were called, allowed to live within its means. There is money - it was discovered, no - it was given to a franchise. The task was facilitated by the presence even in the smallest town of many sales points for auto parts. It was necessary simply to choose the largest. At the same time, Domoratsky and the team acted wisely - if the city already has their franchise partner, then they opened their representative office in another city. As a result, sales through partners occupied at the end of happy times a solid 40% of the turnover of Exist.
 
 
And one more step that allowed Exist to become first among online stores in 2015. This is a conversation with the official and unofficial distributors of foreign parts about placing their catalogs on the site. Two years went by at the Domoratsky for negotiations with the first of them. Then all the suppliers themselves already asked for catalogs to the Exist. And the developed system of percentages of details (automatic search in catalogs, the formation of analogues and actual prices) freed from the huge amount of work of managers. And made it easier for clients.
 
 
As a result, in 201? the Exist had the following figures:
 
 
 
6066824 registered on the client's website;
 
30 million unique visitors (for 2015);
 
7363955 cars in the section "Garage" (social network for car lovers from Exist);
 
1670 working with the company of suppliers;
 
3816 electronic catalogs of auto parts.
 
the above-mentioned first place in turnover in the top of online stores.
 
 
And all this again without foreign investment.
 
 

Conflict


 

 
Exist smoker. Behind him are the Exists of a healthy person.
 
 
In March 2016 in the Russian-language edition of Forbes came the first is and the only great interview of Vladislav Domoratsky and his closest partners. A few months after it all the stock problems of Exist surfaced. Breakthrough. But even from this interview you can indirectly guess that it started much earlier.
 
 
 
In an interview, in addition to Доморцкого took part 7 more top-managers, but among them there were representatives of IT-division of the company - those of Bukovnikov, Chikin and Polyakov. In the interview, they were mentioned casually, in the photo and in the text, only the names of Martynov and Belov appear, except for Domoratsky. That is, already or at all there was tension or misunderstanding.
 
In an interview there are words of Domoratsky about the ongoing consolidation of the company's assets. Given the previous point, it is unlikely that the share of IT people in these assets was supposed to be in the future, which could also be seen in the conflict. And now directly to the reasons.
 
 
Perhaps the conflict in Exist stems from those ancient times when the first manager on Earth gave the task to the first programmer. And an incomprehensible and impossible task began to spin from one to the other with clarifications and bewilderment, and early deadlines were replaced by later ones until our days came. The eternal conflict of managers and IT people, in other words. But maybe not so simple. Domoratsky says , that insurmountable disagreements began from the moment when the deadline for delivery of the self-written ERP-system, which was supervised by Bukovnikov, and which was supposed to link the new logistics center and the site, came to the end. The deadline was determined - by May 1? 2015. But a month before the project was handed over, Bukovnikov said that he would not write this system. As a result, in a hurry, I had to switch to popular SAP (which was already equipped with a logistics center), the torture lasted 8 months, which was very acute for customers - the quality and timeliness of delivery of auto parts fell.
 
 
After this incident, Domoratsky decided to part with Bukovnikov, offering to buy out his share and shares of Chikin and Polyakov, and also suggested that the latter two stay in the company on a salary.
 
 
The trio of owners of it-shnikov (mostly Chikin), without going into the reasons for handing-over of the ERP system, said that Domoratsky forced them to sell shares at a lower price (total $ 25 million vs. $ 10 million), and also imposed strange conditions for further work. Hardly the software itself was the cause of the conflict. Most likely, personal insults, misunderstandings or just fatigue from each other. This is how to live with a man of another worldview for 20 years? A manager and a programmer are people, at least different vectors, as a maximum, and views on life. But the true reasons are given only from the primary sources, which are still silent.
 
 
When the owners could not part ways to compromise, at the initiative of Bukovnikov, regulars of joint-stock conflicts, representatives of the alpha-banking group A1 intervened. They themselves like to call these conflicts "special situations" and are drawn into them solely for the sake of "special remuneration," namely, the beneficial share or "their" person in the leadership.
 
 
And at that moment, Domoratsky, seeing the forcing and, possibly, watching Hulmart, who is already mired then in courts and in which Alfa groups also came, they perform a very elegant and seemingly noble move. Suggests to buy his share in A + a Exist-Info for the same amount he asked for the share of Bukovnikov, Chikin and Polyakov - $ 10 million
 
 
The result of the round - the business is split in two. Domoratsky forever parted with a team of leading developers, as well as a trademark, website, royalty payments with the franchisee and the percentage of turnover of the company.
 
 

 
It is more difficult to assemble than to destroy
 
 

IsNext'ence


 
It was necessary to do something urgently with the Axist-M - the main one left by the Domoratsky company. She and her daughters were warehouses, shops, equipment, as well as relations with suppliers. There were two options - either to sell the "balances" at a bargain price, or to solve something with IT. Staying in a contractual relationship with "A + a Eksist-Info" was expensive, mutually strung due to the split in the price of services did not suit anyone. Domoratsky chose the second way. And in early 201? the new Axist-M website appeared - IsNext.ru. By that time, the bulk of "A + a Eksist-Info" migrated to the head of "ZheldorExpedition" - the largest transport company - Evgenia Nazarova. And the base of clients from the site of Exist.ru suddenly appeared on IsNext.ru, about which there were a lot of disputes, including judicial ones, which did not end in any way, since in the contract for the sale of the share of Domoratsky - nothing was said about the customers. In addition, part of the franchise partners began to renew agreements with Iznekst. In this connection, Exist had to look for new representatives in almost every city.
 
 
Otekstu managed to hold out only until October 2017. Domoratsky noted the positive dynamics of development, and the fact that in the allotted time the company will not be able to break even, and therefore can not pay its debts with suppliers. For the first time he started looking for an investor, but nothing happened right away. In October 2017 it was found out that the company Exist-M and a number of associated with it are liquidated.
 
 

 
Source: rusprofile.ru
 
 
That is characteristic:
 
 
Over the past three years, the Exist-M has consistently increased both planned and unscheduled inspections by state agencies, and the number of administrative violations has increased, especially at the time of the discord in 2016.
 

 
Source: rusprofile.ru
 
 
At the same time, the Axist + Info has no checks.
 
 
The administrative resource involved in Alfa Group? Or is it just the fact that the Exist-M is closer to earth and reality than the virtual Axist + Info? Questions without answers.
 
 
And the crown of the whole history of the split (at the moment). In December 201? Domoratsky still found a buyer. Ironically or according to the calculation of was also the railway "Management Company HCV group "(As usual in Russia, with offshore owners). Already having warehouses and transportation, the company purchased a brand, a customer base, 103 stores, a supplier base with contracts, and the largest logistics center (by the way, find the difference on
and in this video). ??? all documents were reissued from the Exist-M at OOO "Iznekst-Avto" .
 
 
And here is the most important mystery in this story is - OOO "Iznekst-Avto" appeared on the arena only in 2018 year. From ??? all relations with suppliers and customers and were hanging on this company. processing personal data. But it is registered on November ? 2016 (!). This is the moment when the split was already obvious , but it was not even known that Domoratsky wants sell your share. Leave without comment. Too many different guesses.
 
 

Consequences of


 
1. Of course, the conflict that took place attracted a pullback from Exist's former positions.
 
For example, the visitors of Exist in 2015 had 30 million, in 2017-18 the number fell by half.
 
 

 
According to SimilarWeb
 
 

 
Information from the site Exist.ru
 
 
Iznekst could not have such a number, but since the liquidation of Exist-M began in October, the figure also significantly decreased from 3 million to 1.5 million
 
 

 
According to SimilarWeb
 
 
2. It seems that there is competition - but whether it is healthy, that's another question. Everything depends on the administrative resource, which can theoretically be applied, as in the case of the same Yulmart.
 
 
3. Because of the conflict was completely lost the Belarusian branch of Eksist (10 million euros of annual turnover and 16 offices) and their website is closed. In the Eksist + Info they did not even get into the problems, they just established the percentage, which because of the other taxation system in Belarus was extremely unprofitable.
 
 
4. The quality of service during this period of timelessness has definitely dropped.
 
 
5. There is a plus - the Exist appeared on the railway, and after him and Iznekst - how it will be organized - and whether this is a plus - we will see, but the prospect is big. In any case, it will be interesting to follow the competition of "railway workers" in online sales of auto parts.
 
 
6. It is noteworthy that none of Ekzist's closest competitors took advantage of this conflict and did not break out ahead. Neither for Emex.ru, nor for Autodoc.ru of outstanding development for one and a half year it was not noticed. This can be explained by another business model and segment.
 
 
In general, the auto parts market is grows , despite the crisis (and thanks to him too), the growth rate and, accordingly, the prices of foreign parts. It grows as in world scale, and in Russian . Therefore, the Exist with Iznekst can peacefully coexist with each other, rolling along the railway in all directions. But this is hard to believe.
 
 
And two more points in the end.
 
 
 
The principle of "Divide and conquer" works only from the outside. If you apply it within the company - you can not manage and control one alone - you need to reckon with the opinion of other executives. There is, of course, the hope that the emergence of new types of decentralized organizations will help to look at this old and hardly good principle on the other hand or change it to something like "divide, delegate and co-manage". But in Russia at the global level, everything is sad. And on the local all locally.
 
In Russia everything is just as difficult to develop business independently. It hurts a lot of people who want to come to the ready, have plenty to eat and throw away the scraps. This is an indicator of our development, the culture of our business. And the indicator is consistently low compared to the West, where a hundred years for the company in one hands is the norm. It is necessary to change. But from the head, from the tail or from the inside - that's the question.
 
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