Nowhere Too Remote for Online Fashion

Lamoda

Niels Tonsen

With consultant stylists and changing fashion lines, Lamoda is an eCommerce phenomenon. customer-friendly policies like "try before you buy" and right to return are a revolution in Russian retailing, as co-founder and CEO Niels Tonsen told Marina Marshenkulova.

Where did the idea to create Lamoda come from?

By the time when we founded the company, the Internet as a channel of retail sales had grown rapidly in the United States and Great Britain. People realized how convenient it was to choose from a huge range, and then get them with free home delivery. We saw that in Russia this business model had great potential in the mass-market segment.

When was the first time you felt like an entrepreneur?

I became interested in business at an early age, when I started to read books about successful entrepreneurs. I admired the opportunity to build a successful business out of nothing. At 16 years I started helping the local German retailers to sell products online. It was a very interesting time when the owners of small shops were just beginning to look closely at the Internet.

Have you attracted investors for your projects?

The project Lamoda was created with the support of the world's leading investor, Rocket Internet. Over the past three years, we have attracted several major investments, including a record for the Russian e-commerce market attachment in the amount of $130 million from Access Industries, Summit Partners and Tengelmann. Other investors are Holtzbrinck Ventures, Investment AB Kinnevik, JP Morgan Asset Management and PPR Group.

What challenges did you face while leading your business?

As the business develops, the problems change. First, the main difficulty was the prejudice of clients toward online shopping: many simply didn't understand why and how to use an online store, they had doubts about the quality of goods, etc. We made the purchase conditions so transparent and beneficial that gradually we managed to overcome those fears.

Then we saw there was not enough technology capacity for development: the infrastructure of Russian market just couldn't cope with our requirements. So we had to build our own: to open a delivery service, to build a warehouse.

Are you going to expand the business further?

It is one of the priorities. We started with a regional expansion, aiming to cover the entire Russian market, then we went outside of Russia. In 2012, Lamoda started working in Kazakhstan, becoming a leader among online clothing and shoe stores, then, in 2014, Ukraine. In the future, Lamoda will continue its international expansion and will be released in the new markets of the CIS. We strive to ensure so that in Russia and the CIS everyone knew that for the fashion goods they should turn to Lamoda, and get the most out of shopping at our online store. For this it is necessary to expand its geographic presence, constantly improve the service level and create new service benefits enabling customers to make the process of buying clothes and shoes as easy as possible.

How would you define the internal culture of your organization?

Lamoda's corporate culture is based on the principles of mutual respect and teamwork that requires demonstrations of personal responsibility and initiative at all official levels. Our company is committed to actively contributing to their employees to achieve their potential. Thanks to the team spirit, the employees identify themselves with the company and help to fulfill our commitments to the customers because they are interested in the success and prosperity of the company.

How do you motivate your employees?

We have a motivation system in Lamoda including remuneration, development of the social package, guarantees and compensation, assistance to the staff in addressing social and domestic issues. We encourage staff development and offer trainings, free foreign language education, mentoring system for new employees and, of course, prospects for career advancement.

What is unique about the products and services that Lamoda provides?

Lamoda offers the best level of service and a wide selection of products — our range includes more than 1,000 brands of clothing and accessories. In addition, thanks to the courier service Lamoda Express residents of 45 Russian cities can receive their order the next day after clearance and try things on for free before buying.


Russia - Germany 2014
Russia - Germany 2014
ItТs a challenging time for German and Russian businesses, especially smaller and mid-sized companies. Some had recently localized production in Russia, making long-term commitments to the country. Large investment funds had been looking for prospects in the real estate market. Now some of these investors have put their plans on hold. ItТs a challenging time for German and Russian businesses, especially smaller and mid-sized companies. Some had recently localized production in Russia, making long-term commitments to the country. Large investment funds had been looking for prospects in the real estate market. Now some of these investors have put their plans on hold.
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