Almost no one has survived in the footwear market over the past 10 years, footwear companies have gone bankrupt one after another. There is no Centrobuv, no Mattino, Obuvkom has left the market and many other companies. Because it was almost impossible to survive. The market is grey, and I have provided our authorities with some interesting statistics: The Republic of Dagestan, legal production of footwear in 2016 is 50,000 pairs. But my company alone in Dagestan made 192,000, and my company's share is 2-3%. That is, about 5 million pairs of shoes were actually produced in Dagestan last year. In the official statistics (it's a pity that neither the FAS nor Viktor Yevtukhov, who is responsible for the light industry, are present at our session) - 50,000. Here are the indicators of the shadow market.

Andrey Pavlov

Born in 1974 in the Leningrad region. In 1997, he created a company specializing in the production and wholesale of footwear. In 2005, he opened the first Zenden retail stores.

In January, RBC posted statistics on the shoe market on its website. They examined three cities. The most interesting one was Ivanovo. In the small city of Ivanovo, in the poor city of Ivanovo, there were 284 shoe stores. Can you even imagine the competition? Half of these stores sell counterfeit goods, contraband, etc.

When I entered the market in St. Petersburg, my hometown, four years ago, they told me: "Andrey, don't even try." But over these four years, we have managed to take a leading position there. In principle, we are company No. 1. With three brands, we have taken leading positions in a hyper-competitive market. Now we are waiting for a real whitening [of the market]. All my main trends and what I think about my business when I start developing are - first whitening, and then everything else. In 2017, the market was whitened by 100 million pairs: official import and production in 2016 was 300 million pairs, in 2017 - already 400 million. There is ASK VAT, the tax service is working and has already scared everyone with online cash registers. Plus, they will introduce labeling, I hope, from January 1, 2019 (mandatory labeling of clothes, shoes, perfumes, bed linen, car tires and cameras with special codes. – Vedomosti). I think that in 2019 we will already see 550 million pairs, and maybe 600 million.

Zenden Group

Owner: Andrey Pavlov. Revenue (2017) – RUB 23 billion. Shoe sales (2017) – 12 million pairs. Unites about 400 shoe stores under the Zenden, Thomas Munz and Mascotte brands.

Now, through the prism of the tragedy in Kemerovo, all of a sudden all of the authorities have started to raise the issues that I have been talking about for the last two or even three years. [Presidential aide] Andrei Removich Belousov recently said that it is time to pass laws on business fragmentation. I started talking about this 2.5–3 years ago. We need to give everyone clear parameters: this is a small business, this is a medium business, and this is a large one. Everyone should live in their own niche. (A large number of microenterprises generates government expenses on administration, while medium-sized businesses do not develop, Pavlov’s presentation says; he cites figures citing Federal Tax Service data as of mid-February: there are more than 5.7 million microenterprises, 266,256 small businesses, and only 20,219 medium businesses. – Vedomosti.)

We launched a project in another area – a market (Zenden announced a network of markets in different cities. – Vedomosti). Now I want to make a miniature Caucasus on 3 hectares in the city center [of Pyatigorsk], the Silk Road from China to Europe used to pass through there. I will have a Chinese pagoda at the entrance, and the Leaning Tower of Pisa at the exit. There will be a food court, 20 kitchens of the North Caucasus. And then the Ministry of Industry and Trade sends me this story about small-scale trade. I say: excuse me, are we going to start putting up tents everywhere again? What they are tearing down now? And they want to make 150,000 cars there, a food truck. It is very interesting. I have an entrepreneur, he sells meat, he made a store, built his business – and then a food truck drives up next to him and opens the door. What kind of competition is this? For example, in Europe everything is clear. Everything is calculated there, there are no extra retail outlets. Because everyone must earn. An entrepreneur must earn - it is bad when an entrepreneur goes bankrupt; the budget must earn.

The text was prepared based on the speech at the XIV annual conference "Retail in Russia", held by the newspaper "Vedomosti" on March 29, 2018 in Moscow. The positions of the conference participants and persons mentioned in the speeches are indicated at the time of the conference

The market must become white