Luxury & Fashion
Dec 1, 2014
Strategy for Success
Due to its own distribution network Vitebsk-based company Belwest has become one of the footwear sales leaders on the post-Soviet era.
In his annual State of the Nation Address to the Belarusian People and the National Assembly of Belarus the President said: "Having ensured quite a high level of development of the economy, and having learnt how to produce competitive goods, we still have not mastered the art of intelligent trade".
That is why one of the main goals of the national manufacturers is to build up their own distribution networks in order to create added value, to promote brands and to establish direct contacts with consumers in Russia, Latvia, Lithuania and Ukraine. In Q1 2007 the company expanded sales by 12%. In many ways Belwest has achieved such success due to its own commodity distribution network which unites eight outlets and several wholesale representative offices in the Russian Federation and an affiliate in Riga with ten shops in the biggest Latvian cities. Belwest has also set up an extensive sales network in Belarus. According to Yuri Sumaneev, Belwest is in fact a trade and industrial holding company selling products through its distribution network Belwest General Director Yuri Sumaneev which in turn forms a stock of orders. Trading implies making profit, in other words, the offering range should quite big to meet the demands of the most discerning clients.
Every year Belwest exports up to 0.5 million pairs of shoes to Russia, Latvia, Lithuania and Ukraine. Belwest takes a cautious approach to the formation of its distribution network. First of all, the company targets a certain group of consumers, those who prefer high quality, comfortable and stylish footwear priced between $30 and $100. Belwest opens shops in the areas where its products are well-known due to dealers and wholesale customers.
Belwest commodity distribution network includes eight outlets and several wholesale representative offices in the Russian Federation and an affiliate in Riga featuring ten shops in the biggest Latvian cities.
Creation of a distribution network is a rather costly enterprise. A manufacturer's outlet store means special interior design, high quality and up-to-date trading equipment and highly skilled personnel. Being a popular trade-mark, Belwest encounters the same problems as other companies, namely the problems connected with the buying or leasing of shopping space, among others.
Nobody offers any discounts and privileges. On average, the company spends over $500 thousand to open one store. All Belwest outlets sell footwear under Belwest trademark only. And the choice should be really wide to generate profit. To completely satisfy the demand, the company's stocks 20 times more footwear than is displayed for sale in shops. This in turn requires big current assets.
Every year Belwest funnels between BYR 3 billion to BYR 5 billion into production development, with one third of the funds being utilized to extend the distribution network.
Belwest enjoys good exposure in Russia, where it works with trading companies who build up big retail networks and often use Belwest brand for advertising purposes. Such retail networks offer footwear made by Belwest and other companies.
"Building brand awareness is crucial for success in business," Yuri Sumaneyev continues. "Belwest invests big in advertising campaigns; in 2006 the expenditures amounted to Br250 million," he said. Belwest trademark emerged almost 20 years ago to grow into a specimen of quality, immaculate taste and high standards in footwear.
Belwest has been focusing on quality, putting clients first. The company invests heavily into upgrade of its production.