Euroset: Europe’s biggest Mobile Phone Retail Network, an audience with Evgeny Chichvarkin - Chairman of the Board

Interview conducted by Neil Johal

In 1997 Russian entrepreneurs Timur Artemiev and Evgeny Chichvarkin installed their first retail outlet for mobile phone services and accessories in Moscow; a bright yellow kiosk that is echoed in the presentation of Euroset’s stores today. Over the years that followed the pair accelerated the expansion of their retail operation to not only service Moscow but delve further a field into Russia, and by the year end of 2003 Euroset had established 328 more outlets.

But it doesn’t end there - Euroset’s fortunes have grown hand in hand with recent gains in Russian prosperity, not least the Russian peoples’ appetite for all things wireless. In 2004 the network had grown to over 800 outlets and Euroset enjoyed phenomenal growth in revenues from $300 million in 2004 to $3 billion in 2005. The Euroset operation has been hailed as a model for retail excellence and has helped stimulate commerce by helping to improve mobile phone penetration across Russia (if we consider the adage that to give a man a phone will in turn enable him to conduct business). In addition to mobile phone services Euroset also sell consumer electronics in the way of Digital Cameras, portable players, DECT phones and so on.

However, there’s still plenty more to come from Euroset and its energetic founders. Further plans for expansion and diversification are afoot and I caught up with Evgeny to discuss just that.

Your achievements to date are impressive to say the least – what do you believe places Euroset apart from your competitors?
We have the largest commercial retail network in Eastern Europe, which provides unprecedented access to customers and the lowest prices for our products and services.

Russia is dotted with your unmistakable yellow outlets – I understand you’ve also made gains in CIS states, how far do you see Euroset stretching?
Our year-end plans are to be in every republic of the former USSR, including the Baltics, and expand into India.

How large is your distribution network exactly? Is it true to say that Euroset is the biggest Mobile Phone retail network in Europe?
Currently, we have 4400 retail outlets in 7 countries of the CIS and 3 Baltic states. If you take Carphone Warehouse, they have slightly under 2000 stores throughout Western Europe.

How do you support and maximise the role of your employees to ensure customer satisfaction as well empowering your staff?
Our employees are our driving force. All sales personnel have to undergo special training and are monitored by their superiors. Various motivational and performance-based programs are in place to further enhance their productivity, for example, we can engage in joint promotional campaign with one of the vendors and the best Euroset salesman will win a car.

Your plans for diversification have helped steer Euroset’s strategic direction for the better – what is the extent of your plans for your MVNO and what other initiatives are you looking to develop to maintain your tremendous momentum in growth?
The MVNO project is awaiting approval from the Russian Ministry of Communications, but at the same time we are working on establishing hosting outside of Russia, for example, in Ukraine we are in talks with Golden Telecom.

1. Our current products and services are:

Products and services: mobile phones and accessories, DECT-phones, CD, MP3 or CD/MP3 players, digital photo cameras, various accessories and headphones, PDA’s (not in all stores), picture developing and printing

Content sales: mobile terminals and TV broadcasts

Ticketing: airline tickets, concerts, cinema, theater

Internet services: VOIP, content-like products, dial-up

2. Our planned products and services are:

Services: MVNO, logistics, provider of Wi-Fi services in the Moscow network, recording custom music and DVD discs (if agreement is reached with copyright providers)

Products: walkie-talkies, watches, laptops

Hosting services: application service provider, multiple zone support

Financial supermarket: collection of utilities (and other) payments, collection of loan installments, money transfers, opening bank accounts/making deposits to bank accounts

What can Western Europe expect from Euroset in the future?
Expansion, growth and strengthening operations in Western European markets (we are already in the Baltics, which are now part of the EU).

How would you define the secret of your success – what makes the Euroset brand so successful?
The ability to deliver on our promises – low price, convenient locations, customer care and outrageously creative promotional activities. We are a lot of fun to be with.

See Evgeny at Marketing Mobile Services Summit where he will be giving a Keynote address on the 5 October 2006.