S. Porter

Until 1992, systems engineer Plutalovsky worked at the department of his native Bauman Institute. Then he was forced to go into commerce: his salary was barely enough to cover travel expenses. He got a job at a company selling audio and video equipment. “A friend from America came to the owner of the company and brought a batch of postcards for sale,” the businessman says. “There were no such postcards in our country, and they turned out to be in great demand on the empty market.” This is how the Art and Design company was created – one of the leaders in the Russian postcard business. True, in 2000 Plutalovsky left Art and Design – he wanted to work for himself. He started distributing cardboard and paper.

But the market is busy

"For a whole year, my partner Marina Finogenova tried to persuade me to create a publishing house and issue postcards. I watched the market: the economy segment was saturated, and no one dared to take a step into the expensive one," the entrepreneur recalls.

"The number of postcard companies in Russia is approaching 60," says Ravil Shakerov, executive director of Art and Design. "According to our estimates, the potential capacity of the Russian market is 350-400 million pieces of medium-sized and medium-priced postcards over the next few years."

"The growth of the greeting card market has slowed down sharply in the last two years and has now practically stopped," says Nikolai Solodovnikov, CEO of ZAO Mir Pozdravleniy. He sees the reason in the relatively low level of greeting culture (especially in small towns) in Russia as a whole. And in the low level of development of the distribution network, which poorly covers real demand on a national scale.

Distribution of cardboard turned out to be profitable, which allowed the partners to invest $100,000 earned over two years in the new project. In 2002, Plutalovsky (20% share) and Finogenova (80%) founded the publishing house "Lakart". Finogenova does not participate in the operational management of the company. The founders agreed that as the business grows, the shares will gradually equalize. Now Plutalovsky's share has increased to 30%.

Lakarta decided to conquer the market with expensive design and new technologies. The postcard had to stand out right away. Plutalovsky turned to the trendsetters of postcard fashion – the English. “We received samples from English partners – five full boxes. The difference in design with what was sold here was colossal,” Plutalovsky smiles.

The networks looked with interest at the expensive, beautiful postcards that newcomers offered at a price 40% higher than the established price, but were in no hurry to clear the shelves.

Not like in Europe

“The first year was a year of sheer nightmare,” recalls Plutalovsky. “We spent the money, printed the cards, but it was unclear how to sell them. We had to give them to wholesalers, reducing the price almost to the cost price.” In the second year, the founders had to invest another $92,000. And only in the third year did things start to improve. “In Europe, publishing houses, selling cards at retail, get 200-300% of the cost price, and sellers mark up the price by about the same amount. We get 50-80% from wholesale, and when working with retail, we try to budget up to 100%. In Europe, postcards at retail cost 2-3 pounds, i.e. 100-150 rubles, while here they cost 35-50 rubles. A high margin gives Europeans the opportunity to develop,” Plutalovsky is convinced.

"The market's development is hampered by low retail prices for postcards compared to prices for other everyday products," agrees Anastasia Goremykina, commercial director of the Open Letter company. "For example, a carton of milk costs the same in Russia and England, but the average price of a postcard in England is four times higher."

Networks don't understand

"It is almost impossible to get into federal chains: the entry price is so high that it will eat up all profitability, but in the regions there is a chance," hopes Plutalovsky. "We also received favorable conditions in Krasny Kub and Azbuka Vkusa."

"Retailers do not understand this category of goods," laments Goremykina. "They believe that if the price is lower, they will buy more, although if a person needs to congratulate his mother on her birthday, he does not need four cards at a low price, he needs one, and the price does not matter." "Indeed, the profitability of working with chains is low," confirms Shakerov. "But still, this market segment is the most promising."

Andrey Golubkov, press secretary of the supermarket chain Azbuka Vkusa, says that it is important for his chain that the supplier's products comply with Azbuka Vkusa's policy: "Lakarta postcards fully meet this requirement: excellent design and print quality, wide and "intelligent" assortment, timely deliveries and pleasant business relations."

In 2008, Lakart's turnover exceeded 70 million rubles, which is 60% more than in 2007. The year before, the growth rate was approximately 40%. Since 2002, Lakart has released 1,250 types of greeting card designs. The first 24, from Watermark Publishing, included in the Dandelion Jam collection, have been on sale for seven years now.

"The high production costs of Lakart are related to the specifics of the niche (upper price level, advanced style), but most importantly – to the need for constant investment in design, materials and printing," says Oleg Klepikov, CEO of inFolio Research Group. "But the company's distribution policy is well-structured, the products are presented in 18% of retail chains – this is a solid 5th place on the market."

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