New Apple office in Ukraine, changes ahead

Apple has opened an official representative office in Ukraine. The company itself does not comment on changes in the market (secrecy is a common practice of Apple). Market participants talk about a decrease in smuggling. AIN.UA has spoken to several insiders to gain insight on what changes will occur with the arrival of an American company in the market and how it will affect the business of official resellers of Apple products. There will be both positive and negative consequences.

Hardware import to Ukraine 

The first and foremost change in terms of business in Ukraine is the fact that Apple will bring their goods and take care of customs on its own. Previously, Asbis did this. As the company’s representatives told AIN.UA, Asbis used to get Apple goods to their warehouse in Prague and then bring them to Ukraine.

From now on, Apple will import products to Ukraine and then provide them to the Asbis’ local warehouse. It is the official distributor in Ukraine, and it will carry shipments to its partners around the country. 

“Apple indeed will now import to Ukraine and do the customs clearance by itself. But the rest of the work we will keep doing in the usual way. Basically, before Asbis-Ukraine used to get the goods at  Asbis-Group’s warehouse in Prague, while now we will get them in Ukraine,” said Asbis.

So is there any real change? According to AIN.UA’s information, several market players were circumventing the official schemes and were still importing some goods illegally by getting them from abroad first. Thus, some retailers had only about 20-30% of Apple goods legally.

And because of the fact that Apple will carry imports by itself, it will be easier for the company to control its partners from inside the country. Thus, the situation can turn upside down, causing the share of illegal products to decrease rapidly. So, there are two chains that will really suffer from the change. Noteworthy, these are the two who are arguing about the illegal trade the most. 

Combating unofficial sellers

Another problem of the Ukrainian market is the large number of players who openly sell smuggled Apple products. These companies operate in big cities, shopping malls and even have their partnership programs with banks.

One should not expect Apple to start up a brutal war with them. Apple is a big international brand, and they do not want the press accusing them of killing small businesses. Such actions bear a huge reputation loss.

Most probably, there would be negotiations with the big seller of contraband to clean up their product range. And ultimately, it may lead to starting a partnership between this chain and Asbis. They might send requests to change domain names, take away the logo from some websites. There won’t be any harsh measures.

Also, immediately after the launch of the business in Ukraine, Apple became a member of the American Chamber of Commerce (ACC). So, the interests on its behalf, most likely, would be provided by this organization.

Changes in B2B

Apple may become part of the b2b model once it enters the market. Currently, Asbis works with large official chains and can work directly with the biggest customers who buy large quantities of official products for themselves at once.

But now, Apple can take those biggest customers for itself and squeeze out Asbis. As a consequence, Asbis would take its smaller customers, and small private businesses would have to fight for their market share, having received another competitor represented by its main supplier, Apple.

Changes for customers

  • After entering the market in other countries, Apple began to cooperate with two distributors (it is only Asbis in Ukraine now). The purpose of this is to strengthen the competition. Better competition usually results in better conditions, services, discounts, etc. There was no indication that such an approach would be used in Ukraine. Meanwhile, our insiders report that the situation might change shortly. As a result, customers can get better offers.
  • Apple is actively hiring coaches to train the staff in the shops. The important thing to understand is that the company does not plan to open offline Apple Stores. The training is for the partner stores that are officially selling devices in Ukraine. Ideally, it should lead to better services. 
  • There would be a Ukrainian version of the official website. 
  • There could be a faster launch of some services in Ukraine. But one should not count on it too much. 

It is important to note that Apple is not planning to open an Apple Store in Ukraine. Also, it will most likely be impossible to buy electronics in the country through the official website in the next year or two.

We should not expect that Apple’s entry into the market will change prices either. It depends on the economic situation in Ukraine, not the company’s plans. There will be no American prices here (as well as in Europe).

To summarize, the state treasury is the main beneficiary of Apple’s official entry into Ukraine. The company is going to try to reduce the volume of “grey” imports, pay more taxes and make the market of Apple products in Ukraine more transparent.