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8th
         ISSUE


                     CROSS-BORDER
                     DISTANCE SELLING
          May 2012




                     IN UKRAINE: INFO DIGEST
      WELCOME DEAR COLLEAGUES!
      We are presenting the following issue of the Digest, as usual bringing up
      a short set of news about Ukraine.

      Despite the instability of domestic politics, business, in particular, distance
      selling and postal logistics continues to steadily gain momentum. The
      standard of living rises in Ukraine and this positively affects the levels of
      consumption of goods and services (look up details on the pages of the
      following digest).

      It is my pleasure to point out that Ukraine is increasingly becoming the
      centre of the grand world events. We are happy to welcome you on
      the Football Championship EURO-2012, and the First Kyiv International
      Biennale of Contemporary Art ARSENALE 2012, which will help us to
      open up a completely new Ukraine for you.

      Every day we are getting closer to Europe, which makes our business
      relationships more durable.
                                                                                                                Best wishes,
      We wish success in our projects!                                                                          UADM President
                                                                                                                Valentyn Kalashnyk




      MARKET NEWS
      RETAIL TURNOVER
      OF UKRAINE CONTINUES TO GROW
      The National Statistics Service of Ukraine has announced that       According to experts, retail sales continued to show strong
      in January-April, the turnover of the retail trade and restaurant   growth due to the relatively stable increase in revenue and
      sector in Ukraine has grown by 14.8% compared with the same         reduced devaluation expectations. In general, experts pre-
      period the year before.                                             dict the growth in retail sales in 2012 by 10%. In 2011, retail
                                                                          turnover in Ukraine grew by 14% to 43.2 billion US dollars.
      In nominal terms, the figure exceeded 28 billion US dollars.
                                                                          Based on KORRESPONDENT.NET report
      The National Statistics Service of Ukraine also reminds, that in
      January-April 2011, retail trade turnover grew by 15.4% com-
      pared with the same period of 2010.
  NEWS




             New regulations for mail orders and other goods to cross the Ukrainian border
HOT




             A new Customs Code has entered into force since June 1.
             To learn more read the article on the next page.
CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                           May 2012




UKRAINE AND EU APPROVE CUSTOMS
COOPERATION STRATEGY
Kyiv, May 25, 2012. Ukraine and the EU reached a political agree-
ment on joint cooperation strategy regarding customs. Among
other issues, the cooperation will promote information exchange
and introduce efficient countering of customs violations.

The decision ensued from the meeting of the First Vice Prime
Minister of Ukraine Valeriy Khoroshkovskyi and Algirdas Se-
meta, EU Commissioner for Taxation, Customs, Audit and Anti-
fraud. The new plan of action – Strategic Framework for Cus-
toms Cooperation – will contribute to the quality of bilateral
trade relations and help protect the citizens of both parties
against customs fraud. The draft of the document was first
submitted to the EU in July of 2011.

The strategy includes four components: reform of customs
control, preparation of the expansion of the transit system, in-
stitutional development, and customs information exchange.           the enforcement of the time limit to perform customs control
                                                                     procedure, prohibition to confiscate goods and vehicles, as well
The three priorities for customs cooperation of the EU and           as absence of the right to execute court rulings independently.
Ukraine for 2011-2013 are the creation of safe and smooth con-
ditions for trade (namely, speeding up all of the customs pro-       The code provides the exhaustive list of documents. One is ex-
ceedings, integrated border control, improvement of border           pected to submit for control at the customs. The document also
infrastructure), introduction of the effective analysis of customs   provides a catalogue of items, which are considered personal
violations through information exchange, and modernization of        belongings and cannot be taxed when taken across the border.
Ukraine’s customs service (fight against corruption, simplifica-
tion of procedures, introduction of up-to-date standards).           Among all new Customs Code innovations the most important
                                                                     is the Article 234 for distance selling according to which all goods
The State Customs Service is responsible for the implementation      transferred (sent) are not due to taxing if their invoice value is not
of the customs-related part of the Agenda. One of the practical      more than equivalent of 300 Euro which is 100 Euro more than it
achievements in the field has been the delegation of the right to    was previously allowed. Mostly this new Code is alike its European
issue EUR.1 movement certificate to the State Customs Service.       analogs, because during its creation the perspective for attracting
The certificate is a customs clearance, which contains data on the   foreign capital and liberalization of customs control was being tak-
origin of goods (the manufacturer provides this information).        en into consideration. The consignation service has been available
                                                                     in the Ukrainian market for more than 7 years. With new Customs
As part of Ukraine’s efforts to implement international stand-       Code the terms of the goods to cross the border will considerably
ards, including European, into its customs legislation, in March     decrease, and it means that delivery terms of goods to end con-
of 2012 the Ukrainian parliament adopted a new Customs               sumers will decrease too. In its turn a new customs rate of 300 Euro
Code of Ukraine. The EU customs and logistics experts partici-       will allow importing a more diversified range of goods.
pated in the preparation of the code.
                                                                     The State Customs Service advocates that the code will help
Among the most valuable innovations, introduced by the code,         stimulate foreign economic activity and increase trade volume
is the right of entities of foreign economic activity to be sub-     along with state budget income.
jected to customs processing at any customs body. Additionally,
the customs authorities now face several limitations that include    Source: ECONOMICS.LB.UA


A NEW BRAND WILL APPEAR ON THE
UKRAINIAN MARKET
                                                                     A chain store of Italian fashion clothing OVS has agreed to
                                                                     enter the Ukrainian market of clothes and will work in partner-
                                                                     ship with Martex. OVS unites shops and part of the Gruppo
                                                                     Coin with a yearly turnover of 1.63 billion euros. At the same
                                                                     time Maratex bade farewell with his other partner. Shops of
                                                                     popular British clothing brand Peacocks will no longer work in
                                                                     Ukraine. This chain store used to bring together 9 Peacocks
                                                                     stores in Ukraine and 42 in Russia. The cause of the closure of
                                                                     stores in Ukraine and Russia, was the change of owners of Pea-
                                                                     cocks. The new investor, Scottish Edinburgh Woollen Mil, fo-
                                                                     cused on the development of “the network” in his home mar-
                                                                     ket “- said co-owner of Maratex Dmitry Ermolenko, who
                                                                     expects more benefits from cooperation with the OVS. In
                                                                     Ukraine, four former Peacocks stores together with 20 ones in
                                                                     Russia will work under the signboard of OVS.

                                                                     Based on COMMERSANT.UA report




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                         May 2012




UKRAINE IS CAPABLE OF INVESTING ABROAD
Due to its financial capability Ukraine is not only able to at-
tract foreign investment but also is ready to contribute into
the foreign projects. The vivid example of it has become the
fact of Victoria Tigipko’s Fund which has invested in startup
Urbanara, engaged in textile sales.

A group of international investors, including Blumberg Capital
and Brain-to-Ventures, have invested in a startup Urbanara 3,5
million euros as a result of the investment round A. It is men-
tioned in the official report of fund.

Project Urbanara is an online service for the sale of home tex-
tiles and home accessories. As It has been explained by the
executive Director of Victoria Tigipko’s fund, the ability to
attract investors to the project to the business scaling within
limited time (on the markets of Germany, Austria and the UK).
According to her, Ukrainian suppliers will also be able to work
with the project.

As the Executive Director of the Project Benjamin Esser point-
ed out, customers from Ukraine will be able to order products
in the next 2-3 months, and at the beginning of the next year
Russian version of the site will be launched.                       expected to expand to other European countries.

The project started in February 2011 in Germany and Austria.        Such Ukrainian investment is likely to provide Ukrainian manu-
At present, the project has more than 800 lots of goods re-         facturers with the support in their “conquest” of foreign mar-
ceived from 20 countries worldwide. During the first year of        kets.
service handled more than 10 thousand orders. Services are
available in Germany, Austria and Great Britain, they are also      Source: AIN.UA


THE TURNOVER OF THE ELECTRONIC COMMERCE
IN UKRAINE COULD REACH $3-4 BILLIONS IN 2012
                                                                    kinds of children’s goods). The online books selling cannot be
                                                                    included into the rapidly growing segment. “Ukrainian Ozon
                                                                    does not exist yet, although a lot of companies once claimed
                                                                    to be in his place, like Petrivka and Yakaboo” – said an expert.

                                                                    In total, according to the expert’s rough estimates, Uanet has
                                                                    about 250-300 Internet projects on online selling, operating
                                                                    and profitable. “The others are somehow trying to survive. The
                                                                    amount of such projects is about 2-2.5 thousand” – said Dmitry
                                                                    Lappo.

                                                                    Knigs.biz.ua is a leader in business literature of online selling.
                                                                    According to the editorial office the nearest competitors are
                                                                    Olmaxbooks.com and Bookzone.com.ua

                                                                    Should be reminded, that the assessment of the market is simi-
The turnover of the Ukrainian internet shops in the past year       lar to the estimates of other experts. Thus, according to the
totalled over $2 billion, and it can be close to $3-4 billions in   head of Internet Investor Alexander Olshansky, the volume of
2012. This forecast was announced to the AIN correspondent          cashless payments in Uanet is $200 million a year and in 2011
by Dmitry Lappo, the managing partner of the business litera-       it increased almost a half. And this is just a small part of all the
ture of online-store kniga.biz.ua.                                  sales that Ukrainian online stores have: they are paid mostly in
                                                                    cash on delivery.
According to him, the most rapidly growing segments in Uanet
online commerce is clothing, footwear and toys (generally, all      Source: AIN.UA


UKRAINE: THE COUNTRY FALLING INTO THE RANKING
OF COUNTRIES WITH NO UNEMPLOYMENT
The market for international services, distance selling and mail    vealed nine world countries, where employment is no less
order should pay attention to Ukraine.                              than 95%, i.e. complete. Ukraine is among those countries,
                                                                    FINANCES bigmir.net reported. The majority of countries
As a result of studies the international agency Gallup re-          with full employment are in Asia, the rest are in Central and




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                   May 2012



Eastern Europe.

The rating was made with taking into consideration the
amount of their GDPs, income per capita and a percentage of
full-time workers. As it appeared, only several countries out of
those nine countries may boast of really sound economic situa-
tion. The rest either raise the employment level at the expense
of temporary public works or has a large amount of low-profit
economies.

Therefore, a low unemployment level does not obligatorily ac-
company the strong economy. Thus, Ukraine cannot boast of
high GDP indexes and a considerable per capita income. In
2009, the country’s GDP reduced by 14.8% and it has slightly
grown only during recent years.

The CIA agency reports that a great number of unregistered
workers and part-time workers are revealed in Ukraine. Nev-
ertheless, according to Gallup studies, over 50% of Ukrainians
are full-time workers.

FINANCES bigmir.net report


UKRAINE’S HIGHER EDUCATION TOPS RANKING
IN EASTERN EUROPE




Ukraine ranked higher than any other Eastern European coun-        The researchers ascertained the United States of America,
try in the Nation Higher Education Systems rating developed        Sweden, Canada, Finland and Denmark to be the top five
by Universitas 21, the international research network of 24 uni-   countries in the overall education rating.
versities and colleges.
                                                                   The researchers analyzed the most recent data from 48 coun-
Ukraine occupied the 25th position out of 48 evaluated coun-       tries and it was examined according to 20 different criteria to
tries. Czech Republic, Poland, Slovenia, Russia and Slovakia       find countries best at providing higher education.
placed at positions 26, 27, 28, 32, and 35, respectively.
                                                                   Based on LIGA.NET report


“UKRPOSHTA” PROMISES TO KEEP RATES
UNCHANGED FOR 2 YEARS
State mail service enterprise “Ukrposhta” doesn’t plan to
change its rates for basic postal services in 2012-2013. As it
was reported to the journalists by the General Director Oksana
Plotnikova, states “Interfax-Ukraine”.

According to its authorities, the company can increase revenue
by providing better services to the public, as well as develop-
ing a range of services already existing at present.

Source: Interfax-Ukraine




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                    May 2012




UADM SPECIAL
ABILITY TO REMOTELY MANAGE MAIL ORDER
BUSINESS IS AN IMPORTANT FACTOR
FOR THE COMPANIES’ SUCCESS
IN UKRAINE
No matter how paradoxical it may sound, but in the period
of crisis (2009 - 2011) the market of mail orders in Ukraine
doubled.

It was developing not only due to the growth of increased
volumes of already working players on the market but also due
to arrival of new operators from Europe.

Recently, Western companies more and more frequently con-
sider starting their business on the Ukrainian market. The rea-
sons for this are clear: long-distance and unsaturation retail,
full infrastructure (logistics, contact centers, lettershops and
fulfilment, payment system) prepossessing features of the
mentality of consumption, effective channels of recruitment,
and consumer generated media market, the legislative regula-
tion of transparent playing field for market.

The main advantage that makes Ukraine to a certain extent
unique is a possibility to organize the shipment of goods from
the central office in Europe under the scheme of consignment
(shipment worth up to EUR 300 are exempt from taxes and
customs duties, and most of the goods do not require certifi-
cation) and remotely manage all business processes (without
opening a representative office), thanks to reliable partners.

Companies such as Bon prix, Yves Rocher, WITT, Cellbes, etc.
have already started operating under the following scheme.
In the earlier editions of the digest, we have described the
detailed features of the logistic component of the work on
consignment, but the purpose of this article is to provide a       Partner in Ukraine on behalf of a client may organize and carry
comprehensive picture of the remote control to the business        out a full cycle of the processes necessary for successful busi-
of distance selling in Ukraine.                                    ness in Ukraine.


                                                                       Financial              Contact             Lettershop
     Consulting          Management              Marketing
                                                                      operations              Center            and fulfillment

                                                                                                                Customization
      Business            Operational           Adaptation              Refund              Customer
                                                                                                                     and
       plans             management           of promotional             to the              service
                                                                                                                personalization
    development          of the project          materials             consumer            organization
                                                                                                                    items
                                                                                            Receiving
      Market            Interaction with       Monitoring of           Payment
                                                                                          and processing          Self-mailer
    observations          third parties        competitors          to third parties
                                                                                              orders
                        Communication            Analytical            Taxation                                    Mailing
       Legal                                                                                  Claims
                          with state               data              and business                                    lists
       advice                                                                               processing
                           organs                collection             model                                    organization
                          Import and
     Certificates                                 Media,                                   Client's and           Completion
                            customs
        and                                      planning                                  CRM-systems           and shipment
                          registration
      approval                                  and buying                                     work                of parcels
                          of materials
                                                    SMM




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                          May 2012



We would like to attract your attention to several details worth mentioning:

1. Consulting                                                                                4. Financial transactions

The successful start of company                                                              It is difficult for a non-resident from a
depends on the properly elaborat-                                                            legal point of view to carry out finan-
ed strategy of its appearance and                                                            cial transactions (such as a refund to
brand positioning on the market. As                                                          the consumer). It is rather expensive
Ukraine is rather a peculiar country,                                                        to implement B2C payments directly
so it is pretty hazardous to blindly                                                         from Europe. Partner in the country
copy other markets conceptions of                                                            will be able to systematically serve
work without preliminary adaptation.                                                         customers (processing all complaints
Mentality of Ukrainians, which great-                                                        from consumers as well as from in-
ly influences the consumer consump-                                                          spection bodies) and to adjust the
tion, is something mingled between                                                           cash flows in Ukraine within the re-
the image of the Eastern European                                                            quired timeframe.
consumer (for example, Polish) and
the Russian one. For this reason it is
important for a partner to be able to                                                        5. Customer Service Center
prepare the high-quality review of
market, define the image of a con-                                                          What makes the Ukrainian market so
sumer, study what and why he (con-                                                          peculiar is the fact that about 60% of
sumer) wants to buy. And last but                                                           orders made through the website,
not the least, it is essential that the                                                     are accompanied by calls. Ukrainian
company process all the documents                                                           people still do not have a sufficient
in obedience to the requirements of                                                         level of trust in online services and
the Ukrainian legislation.                                                                  are looking for human contact. That
                                                                                            is why the contact center remains
                                                                                            to be still an indispensable tool for
2. Management                                                                               communicating with customers. Due
                                                                                            to a clear prediction of load lines, the
A high-quality management is a head                                                         standardization of all processes and
stone in distance-selling business.                                                         system work with operators taking
Clear planning of tasks, their proper implementation, minimi-      calls, it is possible to minimize the cost of contact center.
zation of risks, wrong steps in marketing and service of con-      Taking calls, operators in terminal access put in the informa-
sumers, due to the experience of the Ukrainian partners, will      tion into the CRM-system and then they are able to inform
enable to considerably minimize the expenses on realization        the consumer on-line about the product availability and ap-
of the whole project. It is of special significance to point out   proximate time of delivery. It is vitally important to remem-
such features like, for example, the ability to co-operate with    ber that the service center is the face of the company in
state organs by enterprises, what foreign companies find dif-      Ukraine, and the quality of its operators impacts the client’s
ficult to deal with, even at the working associated company        experience of working with the company.
in Ukraine. What could really help to avoid such difficulties is
the working out mechanisms of partners already functioning
in this sphere for a long time.                                    6. Lettershop&fulfillment

                                                                   With its own manufacturing facility Lettershop & fulfillment,
3. Marketing                                                       a partner company in Ukraine is able to offer good quality
                                                                   services: customization and personalization of items, organ-
One more important factor of success on the market (apart          izing mailings, self-mailer and equipment of parcels. When
from the presence of the entire necessary infrastructure men-      choosing a partner it is necessary to pay attention rather to
tioned above) is the choice of vector of marketing policy on       experience of the successful organization of large-circulation
the market. In Ukraine all standard methods of recruitment         of stamps and mail shipments within the given timeframe
function well but the years of crisis had a good impetus for       than price.
companies, attracting their attention to various kinds of part-
nership programs that can be arranged at minimal cost. Having      If all of these above mentioned services can be realized by
a partner who could make a base platform for the implemen-         one partner company by means of the combination of its re-
tation of cross-project, is highly important from the standpoint   sources, doing business remotely becomes less costly in terms
of the safe use of personal data.                                  of time and money.


                                                                   Source: Pavlenko Yuliya, Ukrainian Direct Marketing Association.




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                         May 2012




ONLINE TRADE IN UKRAINE BECOMES EASIER WITH
“MEEST EXPRESS”
According to Ukrainian Direct Marketing Association research,
the national postal and logistics group “Meest Express” was a
leader in express mail delivery in “from door to door” format
of year 2010. The rapid development of distance selling mar-
ket in 2011 helped to strengthen the competitive position of
the company and reach new market segments. Assessing the
high standards of service “Mist Express”, this year onto the
Ukrainian market came a number of large European distance
trade companies.

The uniqueness of the company’s services lies in simplicity of
ordering services. And at the same time, “Meest Express” pro-
vides customers with “to be a member of” the whole process
of delivering items: to track the movement of origin, receive
text-messages about the status of the parcel, prepare the nec-
essary documents to the client’s workplace, have the ability to
integrate software and client software service delivery.

Major players in the market of logistic transportation are in the
zone of constant competition, trying to keep the price level
acceptable to the customer’s competitive level. Fierce compe-
tition keeps and improves the quality of basic operators.

The development of new market segments do not need deliv-
ery services any longer (and so it is an objective reality ). What
it really lacks is new kinds of services that are becoming more
popular thanks to online trading and are not specific to other       (if the recipient was not home), as well as online order tracking
industries. Another thing is the ability of companies to provide     site, convenience and affordability of communication with the
the appropriate package and level of services. That willingness      courier in order to understand all the nuances.
to do so forms a demand for a particular service - delivery.
                                                                     In 2012, “Meest Express” plans to introduce to the market
Online stores, in cooperation with “Meest Express” are easy to       a range of innovative services for information and customer
produce documents accompanying secure and reliable deliv-            service program and method of delivery of items, namely
ery, as well as the ability to integrate their own software and      the deployment of a network of automatic e-mail terminals
software delivery service. Customers of Internet products, who       (Pachkomativ). The main feature of market leadership is the
are interested in the speed of delivery and adaptation to their      ability to quickly adapt to its needs and ability to grow in
individual needs, ease of production and constant information        new segments. So far, the development of remote com-
on the status (location) of the order, get the whole package         merce (including e-commerce) is one of the priorities of the
of services that meet their expectations. This delivery during       company.
off-hours and pre-dial to customers with the specification of
the time and place of delivery, and a number of free delivery        Viktor Kuchma
attempts, and the message of an unsuccessful delivery attempt        Chairman of the “Trading House” Meest Express” Directors Board




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                      May 2012




LEGISLATION NEWS
STARTUPS IN UKRAINE CAN BE GIVEN THE GREEN
LIGHT: PRESIDENT YANUKOVYCH WANTS TO REDUCE
THE NUMBER OF ALLOWING CHARACTER DOCUMENTS
                                                                    the President for approval by the Verkhovna Rada.

                                                                    Startups can also expect bureaucratic machines to work on-
                                                                    line. The prime minister, Mykola Azarov, following the instruc-
                                                                    tions of the President, must now ensure the completion and
                                                                    implementation of electronic registration of legal entities and
                                                                    natural persons - entrepreneurs.

                                                                    To satisfy those, planning to open or grow their start-up in
                                                                    Ukraine, the head of government also charged with approval
                                                                    of an exhaustive list of document forms of a strict accounting,
                                                                    marketed to consumers in the provision of administrative ser-
                                                                    vices, and representation in the established order to Verkhov-
                                                                    na Rada a draft law amending to some legislative acts concern-
                                                                    ing the establishment of requirements for the production of
                                                                    blank documents rigorous accounting, marketed to consumers
                                                                    in the provision of administrative services solely on the state-
                                                                    owned enterprises administered by the Ministry of Finance, on-
Startups in Ukraine will soon be easier to communicate with         Banknote Mint of the National Bank of Ukraine.
the authorities and licensing authorities. At the very least, the
President of Ukraine Viktor Yanukovych instructed Prime Min-        The good news for preparing one’s start-up in Ukraine, is the
ister Mykola Azarov to provide a reduction in the number of         fact that the Prime Minister must also ensure that the Cabinet
allowing character documents up to no less than 70%.                will consider the question of the status of implementation of
                                                                    the activities of the National Action Plan for 2012 on the intro-
Appropriate instruction head of the state placed on his official    duction of economic reform program for 2010-2014, the “Rich
website.                                                            society, competitive economy, effective state, “approved by
                                                                    the Decree of President of Ukraine of March 12, 2012, and on
With the following aim, the head of the government was sup-         the consideration of proposals to strengthen the staffing of
posed to report to Mr. Yanukovych on the process of develop-        the central executive authorities and to take steps to improve
ment and presentation of a draft law on amendments to the           the performance discipline in the executive branch.
Law “On the list of allowing character documents in the area
of economic activity” and other legislative acts suggested by       Based on UNIAN materials


UKRAINE REDUCES PAPER BUREAUCRACY AND MAKES
LIFE EASIER FOR ENTREPRENEURS
Ukraine reduces paper bureaucracy and makes life easier for
entrepreneurs – through the Internet. Really vital reforms for
domestic and external business in Ukraine are being imple-
mented in several directions simultaneously: the soviet legacy
is systematically beaten by modern technologies. Nowadays
it’s a matter of taxation and land trade.

For the first quarter of this year the number of taxpayers, who
started the use of the electronic reporting, increased by 3%.
As reported in the press-service of the State tax service of
Ukraine, at the beginning of the year in the electronic form
of Declaration on VAT sent for 91.3% of the payers, today this
figure is more than 94%.

It says in the statement, that in comparison with the previous
year, the number of such reporting has grown twice. In April
2011 on the Internet accounted for only 45% of the taxpayers.

Tax Professionals note that such kind of statements finds its       reports from 341,5 thousand taxpayers. For the year 2011 322
new supporters, because it considerably saves time and ex-          thousand of payers sent 17.1 million records.
penses on the purchase of forms, and also allows you to avoid
queues in tax inspections in the peak days statements.              At the same time the State agency on land resources of
                                                                    Ukraine is planning to start online land registration document
In total for January-April of the current year made 30.7 million    turnover.




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CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                       May 2012



According to the head of the department Serhiy Tymchenko,          Each of these examples of Ukraine’s modernization can serve
citizens can follow the processing of their documents online       as proof of country’s direct steps to European and world
on the website of the agency.                                      standards of doing business online.

“Such automatization of the process helps improving the sys-       Source: FINANCE.UA
tem of the state agency on land resources, and in my opinion
helps to reduce corruption,” summed up Tymchenko.


UKRAINIAN STATE CUSTOMS SERVICE HAS STARTED
ISSUING FREE ELECTRONIC SIGNATURE KEYS
Ukraine is going to be closer to the                                                       Service has started providing customs
rest of Europe – because the shipment                                                      brokers and foreign economic market
processing will be easier and faster.                                                      players with electronic digital signature
Ukrainian State Customs Service im-                                                        keys in order to execute a cabinet reso-
plements world practice in order to                                                        lution,” its press service reported on
reduce the paper work with goods                                                           May 8, 2012.
crossing the country’s border. The
electronic digital signature keys are is-                                                  Electronic digital signature keys can be
sued to customs brokers to sign docu-                                                      obtained at the electronic key certifica-
ments required for customs clearance.                                                      tion center at 28A, Svitlytskoho Street in
                                                                                           Kyiv.
“Since May 3, 2012 the key certifi-
cation center of the State Customs                                                         Based on the FINANCE.UA report


NO ELECTRONIC GADGETS SHIPMENT FROM THE US
BY THE END OF THE YEAR FOR UKRAINIANS
Since May 16 the U.S. Postal Service (“USPS”) all outbound
international shipment of lithium batteries via USPS has been
prohibited. This innovation opens new possibilities for mail or-
der in Ukraine.

But the ban, implemented by the International Civil Aviation
Organization and the Universal Postal Union, may not be per-
manent.

As USPS officials have informed the customers: by January 1,
2013, small shipments of electronics with lithium batteries may
be able to be sent overseas.

Source: AIN.UA




INTERNET NEWS
INTERNET MARKET IN UKRAINE IS GROWING.
UKRAINIANS REGISTER 650,000 NAMES IN .UA DOMAIN
The most popular public domain com.ua has almost 250,000           April 1, 2012). Domen.UA was registered in December 1992 by
names. In April the total number of domain names in the .UA        Dmitry Kohmanyuk and Igor Sviridov, now it is run under the
domain reached 650,900, an increase over the same period           actual administration of the company “Hostmaster”.
last year by 15.6%, Hostmaster told proIT.

At the same time the number of second level domain names
was 13.6 million (growth of 19.9%).

The most popular public domain com.ua has almost 250,000
names (17%). Among geographic domains, the most popular
domain is the capital’s domain kiev.ua, which numbers 53,890
names (8.7%).

Registration services in the domains .UA, com.ua, kiev.ua are
provided by 182 registrars. A market share is controlled by five
major registrars, with 52.41% (0.42 percentage points to the       Based on the proIT report




FRESH DISTANCE SELLING NEWS                 FOLLOW OUR PAGE ON
                                                                                                                      9
CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                          May 2012




ANNOUNCE
UKRAINE IS READY FOR EURO 2012
AND ARSENALE 2012
Ukraine is a country of easily breaking stereotypes. Especially
in the case of grandiose project hosting: like Euro 2012 or AR-
SENALE 2012.

Despite all sad forecasts concerning Ukraine’s capability to
hold Continental football championship, EURO 2012 co-host
Ukraine is ready to welcome thousands of football fans, after
years of work to revamp and build match venues as well as
upgrade vital air, road and rail infrastructure.

Four venues in Ukraine are hosting 12 Group B and Group D
matches in Lviv, Donetsk, Kharkiv and Kyiv as well as two quar-
terfinals and a semi-final before the final at the Olympic Sta-
dium in the capital, Kyiv, on July 1.

Despite controversial political news from Ukraine, the Union of
European Football Associations President Michel Platini called
“extraordinary” the progress made by Ukraine in preparing the
football cup.

Ukraine has bought a number of high-speed trains from South
Korea to improve rail services.

Ukraine’s biggest and most up-to-date airports were mod-
ernized in the four host cities for EURO 2012: Kyiv, Kharkiv,
Donetsk, and Lviv.

Along with new airports, Ukraine has built and modernized
four football stadiums. Kyiv’s Olimpiyskyi, second largest
stadium in Eastern Europe, can host up to 70,050 fans. The
newly built Arena Lviv was named “the most comfortable sta-
dium for fans among EURO 2012 venues” by UEFA officials.
Kharkiv’s Metalist became known as a “spider”: the roof of
the stadium is supported by 24 towers resembling the ten-
tacles of a spider. Thanks to massive support the roof can
withstand an earthquake with a magnitude of 8.0. Opened
in 2009, Donetsk’s Donbass Arena became known as the first
elite stadium in Eastern Europe. Ukrainian stadiums of the
EURO 2012 football championship are ready to ensure safety
to the highest level.

The Emir of Qatar, Hamad bin Khalifa Al Thani, will visit
Ukraine during the finals of the 2012 UEFA European Football
Championship. In particular, he is planning to inspect person-
ally the stadiums during EURO 2012 so as to invite Ukrainian
companies with experience in building sports facilities for the
championship to participate in tenders for the construction
of stadiums in Qatar within preparations for the World Cup
in 2022.

The host cities Kyiv and Lviv are all popular tourist destinations,
unlike Donetsk and Kharkiv - but they can become the tourist
discoveries of EURO 2012.

Besides Euro 2012 one more important event is to take place
in the artistic life. It is the First Kyiv international biennale ARSE-
NALE 2012 to take place from May 24th to July 31st.

Mystetskyi Arsenal (Art Arsenal) is one of Ukraine’s most prom-
ising projects in the field of culture and has a fair chance of
becoming one of the world’s largest museums.




FRESH DISTANCE SELLING NEWS               FOLLOW OUR PAGE ON
                                                                          10
CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST                                                                May 2012




           The mission of Mystetskyi Arsenal is to combine many Ukrain-     taste: from arts specialists to curious EURO 2012 fans. Even
           ian cultural achievements and initiatives into one conceptual    children are to meet unusual artefacts and to learn unbeliev-
           national project thus presenting the Ukrainian historical and    able stories about contemporary art.
           artistic heritage as part of world cultural heritage.
                                                                            For further details relating to EURO 2012 or ARSENALE 2012,
           This year exhibition will comprise the works of about 100 art-   please visit UKRAINE2012.GOV.UA or ARTARSENAL.IN.UA
           ists. A large scale and diverse excursion program to fit every

                                                      Welcome to Ukraine and be our guest!
    SOON




                How Ukrainian Internet companies should handle the users’ personal data
                New penalties for violations of the personal data protection law are to enter into force in
                Ukraine in July 2012.


                 If you want to decline or recommend digest                  Hot Line +380 (44) 495 7885
CONTACT




                 to your colleagues, please feel free to contact us by
   US




                 distance_selling_in_UA@uadm.com.ua                          © UDMA, 2012

                 Follow us on Twitter: @DistanceSell_ua                      Follow us on Facebook: DistanceSellingInUA




           FRESH DISTANCE SELLING NEWS          FOLLOW OUR PAGE ON
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Udma digest 8th issue

  • 1. 8th ISSUE CROSS-BORDER DISTANCE SELLING May 2012 IN UKRAINE: INFO DIGEST WELCOME DEAR COLLEAGUES! We are presenting the following issue of the Digest, as usual bringing up a short set of news about Ukraine. Despite the instability of domestic politics, business, in particular, distance selling and postal logistics continues to steadily gain momentum. The standard of living rises in Ukraine and this positively affects the levels of consumption of goods and services (look up details on the pages of the following digest). It is my pleasure to point out that Ukraine is increasingly becoming the centre of the grand world events. We are happy to welcome you on the Football Championship EURO-2012, and the First Kyiv International Biennale of Contemporary Art ARSENALE 2012, which will help us to open up a completely new Ukraine for you. Every day we are getting closer to Europe, which makes our business relationships more durable. Best wishes, We wish success in our projects! UADM President Valentyn Kalashnyk MARKET NEWS RETAIL TURNOVER OF UKRAINE CONTINUES TO GROW The National Statistics Service of Ukraine has announced that According to experts, retail sales continued to show strong in January-April, the turnover of the retail trade and restaurant growth due to the relatively stable increase in revenue and sector in Ukraine has grown by 14.8% compared with the same reduced devaluation expectations. In general, experts pre- period the year before. dict the growth in retail sales in 2012 by 10%. In 2011, retail turnover in Ukraine grew by 14% to 43.2 billion US dollars. In nominal terms, the figure exceeded 28 billion US dollars. Based on KORRESPONDENT.NET report The National Statistics Service of Ukraine also reminds, that in January-April 2011, retail trade turnover grew by 15.4% com- pared with the same period of 2010. NEWS New regulations for mail orders and other goods to cross the Ukrainian border HOT A new Customs Code has entered into force since June 1. To learn more read the article on the next page.
  • 2. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 UKRAINE AND EU APPROVE CUSTOMS COOPERATION STRATEGY Kyiv, May 25, 2012. Ukraine and the EU reached a political agree- ment on joint cooperation strategy regarding customs. Among other issues, the cooperation will promote information exchange and introduce efficient countering of customs violations. The decision ensued from the meeting of the First Vice Prime Minister of Ukraine Valeriy Khoroshkovskyi and Algirdas Se- meta, EU Commissioner for Taxation, Customs, Audit and Anti- fraud. The new plan of action – Strategic Framework for Cus- toms Cooperation – will contribute to the quality of bilateral trade relations and help protect the citizens of both parties against customs fraud. The draft of the document was first submitted to the EU in July of 2011. The strategy includes four components: reform of customs control, preparation of the expansion of the transit system, in- stitutional development, and customs information exchange. the enforcement of the time limit to perform customs control procedure, prohibition to confiscate goods and vehicles, as well The three priorities for customs cooperation of the EU and as absence of the right to execute court rulings independently. Ukraine for 2011-2013 are the creation of safe and smooth con- ditions for trade (namely, speeding up all of the customs pro- The code provides the exhaustive list of documents. One is ex- ceedings, integrated border control, improvement of border pected to submit for control at the customs. The document also infrastructure), introduction of the effective analysis of customs provides a catalogue of items, which are considered personal violations through information exchange, and modernization of belongings and cannot be taxed when taken across the border. Ukraine’s customs service (fight against corruption, simplifica- tion of procedures, introduction of up-to-date standards). Among all new Customs Code innovations the most important is the Article 234 for distance selling according to which all goods The State Customs Service is responsible for the implementation transferred (sent) are not due to taxing if their invoice value is not of the customs-related part of the Agenda. One of the practical more than equivalent of 300 Euro which is 100 Euro more than it achievements in the field has been the delegation of the right to was previously allowed. Mostly this new Code is alike its European issue EUR.1 movement certificate to the State Customs Service. analogs, because during its creation the perspective for attracting The certificate is a customs clearance, which contains data on the foreign capital and liberalization of customs control was being tak- origin of goods (the manufacturer provides this information). en into consideration. The consignation service has been available in the Ukrainian market for more than 7 years. With new Customs As part of Ukraine’s efforts to implement international stand- Code the terms of the goods to cross the border will considerably ards, including European, into its customs legislation, in March decrease, and it means that delivery terms of goods to end con- of 2012 the Ukrainian parliament adopted a new Customs sumers will decrease too. In its turn a new customs rate of 300 Euro Code of Ukraine. The EU customs and logistics experts partici- will allow importing a more diversified range of goods. pated in the preparation of the code. The State Customs Service advocates that the code will help Among the most valuable innovations, introduced by the code, stimulate foreign economic activity and increase trade volume is the right of entities of foreign economic activity to be sub- along with state budget income. jected to customs processing at any customs body. Additionally, the customs authorities now face several limitations that include Source: ECONOMICS.LB.UA A NEW BRAND WILL APPEAR ON THE UKRAINIAN MARKET A chain store of Italian fashion clothing OVS has agreed to enter the Ukrainian market of clothes and will work in partner- ship with Martex. OVS unites shops and part of the Gruppo Coin with a yearly turnover of 1.63 billion euros. At the same time Maratex bade farewell with his other partner. Shops of popular British clothing brand Peacocks will no longer work in Ukraine. This chain store used to bring together 9 Peacocks stores in Ukraine and 42 in Russia. The cause of the closure of stores in Ukraine and Russia, was the change of owners of Pea- cocks. The new investor, Scottish Edinburgh Woollen Mil, fo- cused on the development of “the network” in his home mar- ket “- said co-owner of Maratex Dmitry Ermolenko, who expects more benefits from cooperation with the OVS. In Ukraine, four former Peacocks stores together with 20 ones in Russia will work under the signboard of OVS. Based on COMMERSANT.UA report FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 2
  • 3. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 UKRAINE IS CAPABLE OF INVESTING ABROAD Due to its financial capability Ukraine is not only able to at- tract foreign investment but also is ready to contribute into the foreign projects. The vivid example of it has become the fact of Victoria Tigipko’s Fund which has invested in startup Urbanara, engaged in textile sales. A group of international investors, including Blumberg Capital and Brain-to-Ventures, have invested in a startup Urbanara 3,5 million euros as a result of the investment round A. It is men- tioned in the official report of fund. Project Urbanara is an online service for the sale of home tex- tiles and home accessories. As It has been explained by the executive Director of Victoria Tigipko’s fund, the ability to attract investors to the project to the business scaling within limited time (on the markets of Germany, Austria and the UK). According to her, Ukrainian suppliers will also be able to work with the project. As the Executive Director of the Project Benjamin Esser point- ed out, customers from Ukraine will be able to order products in the next 2-3 months, and at the beginning of the next year Russian version of the site will be launched. expected to expand to other European countries. The project started in February 2011 in Germany and Austria. Such Ukrainian investment is likely to provide Ukrainian manu- At present, the project has more than 800 lots of goods re- facturers with the support in their “conquest” of foreign mar- ceived from 20 countries worldwide. During the first year of kets. service handled more than 10 thousand orders. Services are available in Germany, Austria and Great Britain, they are also Source: AIN.UA THE TURNOVER OF THE ELECTRONIC COMMERCE IN UKRAINE COULD REACH $3-4 BILLIONS IN 2012 kinds of children’s goods). The online books selling cannot be included into the rapidly growing segment. “Ukrainian Ozon does not exist yet, although a lot of companies once claimed to be in his place, like Petrivka and Yakaboo” – said an expert. In total, according to the expert’s rough estimates, Uanet has about 250-300 Internet projects on online selling, operating and profitable. “The others are somehow trying to survive. The amount of such projects is about 2-2.5 thousand” – said Dmitry Lappo. Knigs.biz.ua is a leader in business literature of online selling. According to the editorial office the nearest competitors are Olmaxbooks.com and Bookzone.com.ua Should be reminded, that the assessment of the market is simi- The turnover of the Ukrainian internet shops in the past year lar to the estimates of other experts. Thus, according to the totalled over $2 billion, and it can be close to $3-4 billions in head of Internet Investor Alexander Olshansky, the volume of 2012. This forecast was announced to the AIN correspondent cashless payments in Uanet is $200 million a year and in 2011 by Dmitry Lappo, the managing partner of the business litera- it increased almost a half. And this is just a small part of all the ture of online-store kniga.biz.ua. sales that Ukrainian online stores have: they are paid mostly in cash on delivery. According to him, the most rapidly growing segments in Uanet online commerce is clothing, footwear and toys (generally, all Source: AIN.UA UKRAINE: THE COUNTRY FALLING INTO THE RANKING OF COUNTRIES WITH NO UNEMPLOYMENT The market for international services, distance selling and mail vealed nine world countries, where employment is no less order should pay attention to Ukraine. than 95%, i.e. complete. Ukraine is among those countries, FINANCES bigmir.net reported. The majority of countries As a result of studies the international agency Gallup re- with full employment are in Asia, the rest are in Central and FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 3
  • 4. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 Eastern Europe. The rating was made with taking into consideration the amount of their GDPs, income per capita and a percentage of full-time workers. As it appeared, only several countries out of those nine countries may boast of really sound economic situa- tion. The rest either raise the employment level at the expense of temporary public works or has a large amount of low-profit economies. Therefore, a low unemployment level does not obligatorily ac- company the strong economy. Thus, Ukraine cannot boast of high GDP indexes and a considerable per capita income. In 2009, the country’s GDP reduced by 14.8% and it has slightly grown only during recent years. The CIA agency reports that a great number of unregistered workers and part-time workers are revealed in Ukraine. Nev- ertheless, according to Gallup studies, over 50% of Ukrainians are full-time workers. FINANCES bigmir.net report UKRAINE’S HIGHER EDUCATION TOPS RANKING IN EASTERN EUROPE Ukraine ranked higher than any other Eastern European coun- The researchers ascertained the United States of America, try in the Nation Higher Education Systems rating developed Sweden, Canada, Finland and Denmark to be the top five by Universitas 21, the international research network of 24 uni- countries in the overall education rating. versities and colleges. The researchers analyzed the most recent data from 48 coun- Ukraine occupied the 25th position out of 48 evaluated coun- tries and it was examined according to 20 different criteria to tries. Czech Republic, Poland, Slovenia, Russia and Slovakia find countries best at providing higher education. placed at positions 26, 27, 28, 32, and 35, respectively. Based on LIGA.NET report “UKRPOSHTA” PROMISES TO KEEP RATES UNCHANGED FOR 2 YEARS State mail service enterprise “Ukrposhta” doesn’t plan to change its rates for basic postal services in 2012-2013. As it was reported to the journalists by the General Director Oksana Plotnikova, states “Interfax-Ukraine”. According to its authorities, the company can increase revenue by providing better services to the public, as well as develop- ing a range of services already existing at present. Source: Interfax-Ukraine FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 4
  • 5. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 UADM SPECIAL ABILITY TO REMOTELY MANAGE MAIL ORDER BUSINESS IS AN IMPORTANT FACTOR FOR THE COMPANIES’ SUCCESS IN UKRAINE No matter how paradoxical it may sound, but in the period of crisis (2009 - 2011) the market of mail orders in Ukraine doubled. It was developing not only due to the growth of increased volumes of already working players on the market but also due to arrival of new operators from Europe. Recently, Western companies more and more frequently con- sider starting their business on the Ukrainian market. The rea- sons for this are clear: long-distance and unsaturation retail, full infrastructure (logistics, contact centers, lettershops and fulfilment, payment system) prepossessing features of the mentality of consumption, effective channels of recruitment, and consumer generated media market, the legislative regula- tion of transparent playing field for market. The main advantage that makes Ukraine to a certain extent unique is a possibility to organize the shipment of goods from the central office in Europe under the scheme of consignment (shipment worth up to EUR 300 are exempt from taxes and customs duties, and most of the goods do not require certifi- cation) and remotely manage all business processes (without opening a representative office), thanks to reliable partners. Companies such as Bon prix, Yves Rocher, WITT, Cellbes, etc. have already started operating under the following scheme. In the earlier editions of the digest, we have described the detailed features of the logistic component of the work on consignment, but the purpose of this article is to provide a Partner in Ukraine on behalf of a client may organize and carry comprehensive picture of the remote control to the business out a full cycle of the processes necessary for successful busi- of distance selling in Ukraine. ness in Ukraine. Financial Contact Lettershop Consulting Management Marketing operations Center and fulfillment Customization Business Operational Adaptation Refund Customer and plans management of promotional to the service personalization development of the project materials consumer organization items Receiving Market Interaction with Monitoring of Payment and processing Self-mailer observations third parties competitors to third parties orders Communication Analytical Taxation Mailing Legal Claims with state data and business lists advice processing organs collection model organization Import and Certificates Media, Client's and Completion customs and planning CRM-systems and shipment registration approval and buying work of parcels of materials SMM FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 5
  • 6. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 We would like to attract your attention to several details worth mentioning: 1. Consulting 4. Financial transactions The successful start of company It is difficult for a non-resident from a depends on the properly elaborat- legal point of view to carry out finan- ed strategy of its appearance and cial transactions (such as a refund to brand positioning on the market. As the consumer). It is rather expensive Ukraine is rather a peculiar country, to implement B2C payments directly so it is pretty hazardous to blindly from Europe. Partner in the country copy other markets conceptions of will be able to systematically serve work without preliminary adaptation. customers (processing all complaints Mentality of Ukrainians, which great- from consumers as well as from in- ly influences the consumer consump- spection bodies) and to adjust the tion, is something mingled between cash flows in Ukraine within the re- the image of the Eastern European quired timeframe. consumer (for example, Polish) and the Russian one. For this reason it is important for a partner to be able to 5. Customer Service Center prepare the high-quality review of market, define the image of a con- What makes the Ukrainian market so sumer, study what and why he (con- peculiar is the fact that about 60% of sumer) wants to buy. And last but orders made through the website, not the least, it is essential that the are accompanied by calls. Ukrainian company process all the documents people still do not have a sufficient in obedience to the requirements of level of trust in online services and the Ukrainian legislation. are looking for human contact. That is why the contact center remains to be still an indispensable tool for 2. Management communicating with customers. Due to a clear prediction of load lines, the A high-quality management is a head standardization of all processes and stone in distance-selling business. system work with operators taking Clear planning of tasks, their proper implementation, minimi- calls, it is possible to minimize the cost of contact center. zation of risks, wrong steps in marketing and service of con- Taking calls, operators in terminal access put in the informa- sumers, due to the experience of the Ukrainian partners, will tion into the CRM-system and then they are able to inform enable to considerably minimize the expenses on realization the consumer on-line about the product availability and ap- of the whole project. It is of special significance to point out proximate time of delivery. It is vitally important to remem- such features like, for example, the ability to co-operate with ber that the service center is the face of the company in state organs by enterprises, what foreign companies find dif- Ukraine, and the quality of its operators impacts the client’s ficult to deal with, even at the working associated company experience of working with the company. in Ukraine. What could really help to avoid such difficulties is the working out mechanisms of partners already functioning in this sphere for a long time. 6. Lettershop&fulfillment With its own manufacturing facility Lettershop & fulfillment, 3. Marketing a partner company in Ukraine is able to offer good quality services: customization and personalization of items, organ- One more important factor of success on the market (apart izing mailings, self-mailer and equipment of parcels. When from the presence of the entire necessary infrastructure men- choosing a partner it is necessary to pay attention rather to tioned above) is the choice of vector of marketing policy on experience of the successful organization of large-circulation the market. In Ukraine all standard methods of recruitment of stamps and mail shipments within the given timeframe function well but the years of crisis had a good impetus for than price. companies, attracting their attention to various kinds of part- nership programs that can be arranged at minimal cost. Having If all of these above mentioned services can be realized by a partner who could make a base platform for the implemen- one partner company by means of the combination of its re- tation of cross-project, is highly important from the standpoint sources, doing business remotely becomes less costly in terms of the safe use of personal data. of time and money. Source: Pavlenko Yuliya, Ukrainian Direct Marketing Association. FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 6
  • 7. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 ONLINE TRADE IN UKRAINE BECOMES EASIER WITH “MEEST EXPRESS” According to Ukrainian Direct Marketing Association research, the national postal and logistics group “Meest Express” was a leader in express mail delivery in “from door to door” format of year 2010. The rapid development of distance selling mar- ket in 2011 helped to strengthen the competitive position of the company and reach new market segments. Assessing the high standards of service “Mist Express”, this year onto the Ukrainian market came a number of large European distance trade companies. The uniqueness of the company’s services lies in simplicity of ordering services. And at the same time, “Meest Express” pro- vides customers with “to be a member of” the whole process of delivering items: to track the movement of origin, receive text-messages about the status of the parcel, prepare the nec- essary documents to the client’s workplace, have the ability to integrate software and client software service delivery. Major players in the market of logistic transportation are in the zone of constant competition, trying to keep the price level acceptable to the customer’s competitive level. Fierce compe- tition keeps and improves the quality of basic operators. The development of new market segments do not need deliv- ery services any longer (and so it is an objective reality ). What it really lacks is new kinds of services that are becoming more popular thanks to online trading and are not specific to other (if the recipient was not home), as well as online order tracking industries. Another thing is the ability of companies to provide site, convenience and affordability of communication with the the appropriate package and level of services. That willingness courier in order to understand all the nuances. to do so forms a demand for a particular service - delivery. In 2012, “Meest Express” plans to introduce to the market Online stores, in cooperation with “Meest Express” are easy to a range of innovative services for information and customer produce documents accompanying secure and reliable deliv- service program and method of delivery of items, namely ery, as well as the ability to integrate their own software and the deployment of a network of automatic e-mail terminals software delivery service. Customers of Internet products, who (Pachkomativ). The main feature of market leadership is the are interested in the speed of delivery and adaptation to their ability to quickly adapt to its needs and ability to grow in individual needs, ease of production and constant information new segments. So far, the development of remote com- on the status (location) of the order, get the whole package merce (including e-commerce) is one of the priorities of the of services that meet their expectations. This delivery during company. off-hours and pre-dial to customers with the specification of the time and place of delivery, and a number of free delivery Viktor Kuchma attempts, and the message of an unsuccessful delivery attempt Chairman of the “Trading House” Meest Express” Directors Board FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 7
  • 8. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 LEGISLATION NEWS STARTUPS IN UKRAINE CAN BE GIVEN THE GREEN LIGHT: PRESIDENT YANUKOVYCH WANTS TO REDUCE THE NUMBER OF ALLOWING CHARACTER DOCUMENTS the President for approval by the Verkhovna Rada. Startups can also expect bureaucratic machines to work on- line. The prime minister, Mykola Azarov, following the instruc- tions of the President, must now ensure the completion and implementation of electronic registration of legal entities and natural persons - entrepreneurs. To satisfy those, planning to open or grow their start-up in Ukraine, the head of government also charged with approval of an exhaustive list of document forms of a strict accounting, marketed to consumers in the provision of administrative ser- vices, and representation in the established order to Verkhov- na Rada a draft law amending to some legislative acts concern- ing the establishment of requirements for the production of blank documents rigorous accounting, marketed to consumers in the provision of administrative services solely on the state- owned enterprises administered by the Ministry of Finance, on- Startups in Ukraine will soon be easier to communicate with Banknote Mint of the National Bank of Ukraine. the authorities and licensing authorities. At the very least, the President of Ukraine Viktor Yanukovych instructed Prime Min- The good news for preparing one’s start-up in Ukraine, is the ister Mykola Azarov to provide a reduction in the number of fact that the Prime Minister must also ensure that the Cabinet allowing character documents up to no less than 70%. will consider the question of the status of implementation of the activities of the National Action Plan for 2012 on the intro- Appropriate instruction head of the state placed on his official duction of economic reform program for 2010-2014, the “Rich website. society, competitive economy, effective state, “approved by the Decree of President of Ukraine of March 12, 2012, and on With the following aim, the head of the government was sup- the consideration of proposals to strengthen the staffing of posed to report to Mr. Yanukovych on the process of develop- the central executive authorities and to take steps to improve ment and presentation of a draft law on amendments to the the performance discipline in the executive branch. Law “On the list of allowing character documents in the area of economic activity” and other legislative acts suggested by Based on UNIAN materials UKRAINE REDUCES PAPER BUREAUCRACY AND MAKES LIFE EASIER FOR ENTREPRENEURS Ukraine reduces paper bureaucracy and makes life easier for entrepreneurs – through the Internet. Really vital reforms for domestic and external business in Ukraine are being imple- mented in several directions simultaneously: the soviet legacy is systematically beaten by modern technologies. Nowadays it’s a matter of taxation and land trade. For the first quarter of this year the number of taxpayers, who started the use of the electronic reporting, increased by 3%. As reported in the press-service of the State tax service of Ukraine, at the beginning of the year in the electronic form of Declaration on VAT sent for 91.3% of the payers, today this figure is more than 94%. It says in the statement, that in comparison with the previous year, the number of such reporting has grown twice. In April 2011 on the Internet accounted for only 45% of the taxpayers. Tax Professionals note that such kind of statements finds its reports from 341,5 thousand taxpayers. For the year 2011 322 new supporters, because it considerably saves time and ex- thousand of payers sent 17.1 million records. penses on the purchase of forms, and also allows you to avoid queues in tax inspections in the peak days statements. At the same time the State agency on land resources of Ukraine is planning to start online land registration document In total for January-April of the current year made 30.7 million turnover. FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 8
  • 9. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 According to the head of the department Serhiy Tymchenko, Each of these examples of Ukraine’s modernization can serve citizens can follow the processing of their documents online as proof of country’s direct steps to European and world on the website of the agency. standards of doing business online. “Such automatization of the process helps improving the sys- Source: FINANCE.UA tem of the state agency on land resources, and in my opinion helps to reduce corruption,” summed up Tymchenko. UKRAINIAN STATE CUSTOMS SERVICE HAS STARTED ISSUING FREE ELECTRONIC SIGNATURE KEYS Ukraine is going to be closer to the Service has started providing customs rest of Europe – because the shipment brokers and foreign economic market processing will be easier and faster. players with electronic digital signature Ukrainian State Customs Service im- keys in order to execute a cabinet reso- plements world practice in order to lution,” its press service reported on reduce the paper work with goods May 8, 2012. crossing the country’s border. The electronic digital signature keys are is- Electronic digital signature keys can be sued to customs brokers to sign docu- obtained at the electronic key certifica- ments required for customs clearance. tion center at 28A, Svitlytskoho Street in Kyiv. “Since May 3, 2012 the key certifi- cation center of the State Customs Based on the FINANCE.UA report NO ELECTRONIC GADGETS SHIPMENT FROM THE US BY THE END OF THE YEAR FOR UKRAINIANS Since May 16 the U.S. Postal Service (“USPS”) all outbound international shipment of lithium batteries via USPS has been prohibited. This innovation opens new possibilities for mail or- der in Ukraine. But the ban, implemented by the International Civil Aviation Organization and the Universal Postal Union, may not be per- manent. As USPS officials have informed the customers: by January 1, 2013, small shipments of electronics with lithium batteries may be able to be sent overseas. Source: AIN.UA INTERNET NEWS INTERNET MARKET IN UKRAINE IS GROWING. UKRAINIANS REGISTER 650,000 NAMES IN .UA DOMAIN The most popular public domain com.ua has almost 250,000 April 1, 2012). Domen.UA was registered in December 1992 by names. In April the total number of domain names in the .UA Dmitry Kohmanyuk and Igor Sviridov, now it is run under the domain reached 650,900, an increase over the same period actual administration of the company “Hostmaster”. last year by 15.6%, Hostmaster told proIT. At the same time the number of second level domain names was 13.6 million (growth of 19.9%). The most popular public domain com.ua has almost 250,000 names (17%). Among geographic domains, the most popular domain is the capital’s domain kiev.ua, which numbers 53,890 names (8.7%). Registration services in the domains .UA, com.ua, kiev.ua are provided by 182 registrars. A market share is controlled by five major registrars, with 52.41% (0.42 percentage points to the Based on the proIT report FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 9
  • 10. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 ANNOUNCE UKRAINE IS READY FOR EURO 2012 AND ARSENALE 2012 Ukraine is a country of easily breaking stereotypes. Especially in the case of grandiose project hosting: like Euro 2012 or AR- SENALE 2012. Despite all sad forecasts concerning Ukraine’s capability to hold Continental football championship, EURO 2012 co-host Ukraine is ready to welcome thousands of football fans, after years of work to revamp and build match venues as well as upgrade vital air, road and rail infrastructure. Four venues in Ukraine are hosting 12 Group B and Group D matches in Lviv, Donetsk, Kharkiv and Kyiv as well as two quar- terfinals and a semi-final before the final at the Olympic Sta- dium in the capital, Kyiv, on July 1. Despite controversial political news from Ukraine, the Union of European Football Associations President Michel Platini called “extraordinary” the progress made by Ukraine in preparing the football cup. Ukraine has bought a number of high-speed trains from South Korea to improve rail services. Ukraine’s biggest and most up-to-date airports were mod- ernized in the four host cities for EURO 2012: Kyiv, Kharkiv, Donetsk, and Lviv. Along with new airports, Ukraine has built and modernized four football stadiums. Kyiv’s Olimpiyskyi, second largest stadium in Eastern Europe, can host up to 70,050 fans. The newly built Arena Lviv was named “the most comfortable sta- dium for fans among EURO 2012 venues” by UEFA officials. Kharkiv’s Metalist became known as a “spider”: the roof of the stadium is supported by 24 towers resembling the ten- tacles of a spider. Thanks to massive support the roof can withstand an earthquake with a magnitude of 8.0. Opened in 2009, Donetsk’s Donbass Arena became known as the first elite stadium in Eastern Europe. Ukrainian stadiums of the EURO 2012 football championship are ready to ensure safety to the highest level. The Emir of Qatar, Hamad bin Khalifa Al Thani, will visit Ukraine during the finals of the 2012 UEFA European Football Championship. In particular, he is planning to inspect person- ally the stadiums during EURO 2012 so as to invite Ukrainian companies with experience in building sports facilities for the championship to participate in tenders for the construction of stadiums in Qatar within preparations for the World Cup in 2022. The host cities Kyiv and Lviv are all popular tourist destinations, unlike Donetsk and Kharkiv - but they can become the tourist discoveries of EURO 2012. Besides Euro 2012 one more important event is to take place in the artistic life. It is the First Kyiv international biennale ARSE- NALE 2012 to take place from May 24th to July 31st. Mystetskyi Arsenal (Art Arsenal) is one of Ukraine’s most prom- ising projects in the field of culture and has a fair chance of becoming one of the world’s largest museums. FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 10
  • 11. CROSS-BORDER DISTANCE SELLING IN UKRAINE: INFO DIGEST May 2012 The mission of Mystetskyi Arsenal is to combine many Ukrain- taste: from arts specialists to curious EURO 2012 fans. Even ian cultural achievements and initiatives into one conceptual children are to meet unusual artefacts and to learn unbeliev- national project thus presenting the Ukrainian historical and able stories about contemporary art. artistic heritage as part of world cultural heritage. For further details relating to EURO 2012 or ARSENALE 2012, This year exhibition will comprise the works of about 100 art- please visit UKRAINE2012.GOV.UA or ARTARSENAL.IN.UA ists. A large scale and diverse excursion program to fit every Welcome to Ukraine and be our guest! SOON How Ukrainian Internet companies should handle the users’ personal data New penalties for violations of the personal data protection law are to enter into force in Ukraine in July 2012. If you want to decline or recommend digest Hot Line +380 (44) 495 7885 CONTACT to your colleagues, please feel free to contact us by US distance_selling_in_UA@uadm.com.ua © UDMA, 2012 Follow us on Twitter: @DistanceSell_ua Follow us on Facebook: DistanceSellingInUA FRESH DISTANCE SELLING NEWS FOLLOW OUR PAGE ON 11