History of Entrepreneurship in Russia
Yves Rocher History of Entrepreneurship in Russia Introduction In Russia, any cosmetic coming from France has a special aura. The reason is that, for the Russian and a lot of other countries, France rimes with glamour, fashion and elegance. That is why I decided to study one of the most successful French business abroad, Yves Rocher, created in 1959 and now implemented in more than 50 countries all over the world.
We are going to see how the company spread in Russia starting in the beginning of the 90s, first in Moscow, to reach today Vladivostok and we will observe the very specific political context the firm settled in and how it contributed, in a way, to the success of the French business. History The man who created Yes Rocher Company was Yves Rocher himself, his concept was to use plants to make cosmetics and to sell it by mail order. Yves Rocher is born in 1930 and died in 2009; he was an industrial and a politic. He grew up in La Gacilly in France, where everything started for him.
When he was 14, an old lady gave him the recipe of a hemostatic cream, and then he decided to create it in his attic and to sell it by mail order. Natural products and mail order constituted the foundation of his cosmetic business founded in 1959. Early he was focused on the biological agriculture and he wanted to democratize access to beauty products. His business won’t stop to grow up and 3 years after the beginning he opened his first shop. At the late 80’s Yves Rocher group was a prosper business with international dimension, and open its irst shop in Russia, in 1991 in Moscow. The Arrival To begin, we must situate the context in which arrived the company. In 1991, Perestroika year, the country’s borders are closed; it is impossible to find any product coming from abroad. For a foreign company, it is very complicated if it is almost impossible to enter the Russian market. However, shelves in the stores are empty, diversity of products is very low, competition is inexistent. In that way, Russian women represent the perfect target for Yves Rocher, which has in its hands the product that they desire the most.
The company, combining ambition, audacity and smelling potential success, decides to open a store in Moscow, on the Pouchkine Place, next to Tverskaya, the “Russian Champs Elysees Avenue”, street in which, the same year, the American multinational company Mac Donald’s, settled in too. Results are instantaneous, the company’s arrival starts the buzz, thousands and thousands people are queuing in the street during the opening day, on the 15th of August 1991, not only people living in Moscow but coming from other cities, in order to buy and bring home a French product.
It was the first store in Moscow where you could see all the products and test them. Yves Rocher was the first foreign cosmetics company coming to Russia, in addition it turns out it was French and the firm was offering to the market a luxury product. The supply could not have been more in line with the demand of the time. Yves Rocher cosmetics are made of vegetal product only, that is what the brand wanted to highlight and that contributed also largely to the company’s success. The spread Given its size and complexity, Russia is not a territory to be conquered overnight.
It was therefore extremely important to proceed gradually and logically. First, by creating a network of stores in cities that were counting more than one million inhabitants, then, in their periphery. That is what generated notoriety. Only after that, the brand developed distance selling through catalogs and then via the Internet (representing 10% of the distance selling). The increase was insane from the start. Sales networks are complementary; distance selling meets the geographical constraints of the country, the clients can find Yves Rocher products everywhere.
Another main reason that made the company successful is the marketing policy it decided to apply in Russia. Indeed, since 1991, the company had to face two main crises: in 1998 and in 2009. Instead of undergoing those financial crises, Yves Rocher decided to face it and take some risks by doing, in 1999, a rebranding: the brand changed its visual identity, the logo and its graphic charter. These actions had important consequences; whereas the other brands were stagnating, this way of doing was considered as a remarkable event in the world of cosmetics.
It was an unusual decision for a period of crisis when, ordinarily, companies do not move and wait. This generated a lot of new clients. Today Unlike the other countries it is settled in, Yves Rocher has, in Russia, a high-end image and still enjoys the aura of the first foreign cosmetics brand in Russia. In 1991, Yves Rocher was a luxury brand. Nowadays, it is assimilated as a premium brand, French, from natural cosmetics plant and a high quality brand, which is prestigious to own. Yves Rocher is neither a luxury brand nor a “mass market” one, it is the French brand of natural products which are not interchangeable.
Today, Yves Rocher Russia represents several brands and distribution networks, more than 200 millions euros of turnover, more than 200 point of sale covering 95% of the cities with more than 250 000 inhabitants, including 50 in Moscow and 13 in St Petersburg. The French company owns half of the Moscow stores network, and all the St Petersburg one. It counts 700 employees, including 150 in the headquarters, in Moscow. The other part of the network is our franchise partners all over the country. This contributes to the development of the micro-enterprise in Russia.
Conclusion For a foreign company, entering the Russian market is an ambitious thing; administrative, bureaucratic and culture barriers make Russia difficult to touch. But it was in this country Yves Rocher decided to settle in just after close European countries, twenty years ago. The company dared to take the necessary risks to arrive at a delicate time and offer the right product. Yves Rocher was the first to be able to anticipate and detect the fact that Russia represents a huge potential market. With this gamble, the French firm is now the leader on the cosmetics market in Russia