Interview with Sergey Galitsky, the founder of Magnit, the Russia’s largest retailer.
Forbes estimates his fortune at $3.5 billion in 2021. I hope the quotes from his interview will be insightful for everyone who wants to enter the Russian market:
There is no one perfect country for doing business. Where there are good conditions, there are small opportunities. Where there are a lot of opportunities, conditions are an issue.
Yes, we have 10 million customers a day. Considering they’re families, that’s 25-30 million people coming in every day. But it’s a real race for customers. We have very strong competitors.
When we cut the price for bananas by 1 ruble, we sell 100 tons a day more. There are people who live within their budget.
Cucumbers last 7-8 days. We had losses of up to 50% in the winter. So we were forced to start our own production. Now we have the biggest greenhouse in Europe (80 ha).
We do not have more than 10% direct imports. It is not a very significant segment of Russian retail.
Thanks to the government, they did not impose sanctions immediately, we had time to readjust. We added Central Asia, Iran, and found products in other countries [2016].
We’ve been opening three or four stores a day for over three years now. It seems amazing, even to us.
In order not to be disappointed, you don’t have to be fascinated. In business, every day is like a war.
I don’t see anything Wal-Mart can do that other retailers can’t.
The miracles ended two thousand years ago. If the price is lower, the quality is lower. We have to be objective and be honest about it.
In business, you have to not be afraid to go out every day with an open mind and have a chance to lose everything. When you are afraid to lose everything, you have to admit that you no longer have the will that you had.
I only believe in daily, hard work. It’s not self-learning. It’s just hard work. And whoever spends more time on it has more effect.
Over time, I began to realize that I began to lose speed. At some point you have to tell yourself that operational management, with the intensity you’ve had for the last 25 years, is no longer for you.
In business, the element of logic is incredibly important. Chess is a good game model of logic. You should also fantastically love what you do and have an incredible sense of purpose.
Entrepreneurs are a special biological breed. Two, four percent at the most, have entrepreneurial potential. In our country, whoever thought they needed more money in this life declares themselves an entrepreneur, and when it turns out they’re not ready for these risks and these stresses, they start complaining about the FSB or conspiracies by government agencies, just like a person who complains about the weather.
I could do nothing without the team, I’m just an ordinary man.