With post offices in Poland and Moldova, a NovaPay branch in Lithuania: How Ukrainian post company is conquering the global market
With the outbreak of a full-scale war, Nova Poshta became one of the Ukrainian companies that did not stop its operations even for a day; on the contrary, it continued to work and rapidly scale up. For example, in September, the fintech project NovaPay, which is part of the Nova Poshta group of companies, opened an office in Vilnius and began working on the development of a fully-fledged financial application to work in European markets. Nova Poshta launched in Poland in early October, opening 18 post offices there. At the same time, the company is still working on its own airline.
AIN.Capital found out why Nova Poshta is not afraid of competition in the Polish market, how it is doing in Moldova, and what the company’s plans are for 2023.
Now Poland is the second-large market of Nova Poshta beyond Ukraine. Why Poland? Why is this market so attractive for the company?
Statistics say over 9 million people left Ukraine (Reuters referring to the United Nations High Commissioner for Refugees), three million of which Poland has welcomed. During the full-scale Russian invasion, we have got an increasingly growing number of requests like: “When will Nova Poshta follow Ukrainians who are temporarily abroad?” We knew people needed to send their luggage from home while leaving with a minimum in hand. So that’s how we introduced our new product, a package from home in Ukraine to Europe with a 75% discount.
But we had plans for Poland before the big war. And it just forced us to follow our clients who migrated from Ukraine. So we started looking for a credible partner in Poland with an extensive network and close to Ukrainians, allowing them to receive packages from home comfortably. Our choice was InPost, which has the largest parcel locker network in Poland (about 20,000) and courier delivery to any settlement on the Polish map.
Since then, Ukrainians got a chance to receive their belongings from home safely. This partnership also resulted in 2.5 times cost decrease for the delivery to Poland. We also planned to help our citizens quickly and easily send parcels home and back. So our next step was opening our own offices in Poland with those two services: “A package from home” and “A package for home.”
We are not currently competing with local postal operators in Poland. We focus only on helping our displaced people from Ukraine.
How many post offices do you have in Poland? What services are available there?
We opened our first post office in Warsaw on October 3. Today, there are 18 Nova Post locations in eight Polish cities: Six of them are in Warsaw, two each in Krakow, Poznan, Gdansk, Wroclaw, Lublin, and one each in Rzeszów and Łódź. To open our branches, we are looking for places with a concentration of our citizens.
All our branches are open every day, and we hire Ukrainians to work as operators. The delivery time takes an average of five days.
You can send clothes, shoes, food products in its original packaging, appliances, generators, batteries, etc. However, there is a list of goods that are not allowed to be shipped by customs, such as tobacco, alcohol, narcotic substances, money, medicines, etc. You can find the full list here.
You can also easily send a parcel from any Nova Poshta office in Ukraine to Poland: to a Nova Post branch, to pick up station or by inPost courier delivery.
What are your first operation results in Poland? What are your numbers?
At the beginning of October 2022, 90 to 100 parcels went to Ukraine daily. This number has been assured thanks to the NP Shopping service as well, which was launched long before. Our customers can buy anything online in Europe, and we deliver it by using our warehouses.
Every new point of sale in Poland resulted in growing revenue. Nowadays, 800 parcels are sent from Ukraine to Poland daily, 25% of which are conducted between Nova Poshta units, and 1,500 go in the opposite direction, with a 55% share correspondingly. Warm clothes like coats, jackets, and boots are the most sent to Poland, and personal summer things return to Ukraine.
What is about Moldova? Please share some information about locations, services, and market numbers there.
In 2014, Nova Poshta entered the Moldovan courier delivery market. In 2021, we had 19 standalone post offices in the biggest cities countrywide (Chișinău, Bălți, Cahul, Edineț, Căușeni, Orhei, Fălești, etc.) with the largest locker network, including 300 units.
Today, the company is on TOP 3 Express Delivery Providers in Moldova. Last few years, there was a stable growth of 20-25% per annum. For example, 2021 ended with 216,000 parcels and cargo. And for 9 months of 2022, we already have reached 308,000 or 30% more.
In our offices, customers can use the whole package of services, from the in-country parcel and document delivery to cargo delivery worldwide. Most ordered in Moldova are goods in beauty & health and home electronics categories.
To support Ukrainian refugees in Moldova, we decided to lower our rates double. We want our citizens to have a stable and easy connection with their homeland. This year, we will continue to develop the network of post offices and parcel lockers in Moldova, introduce new digital tools, and improve our service to make it more comfortable and convenient for customers to use the services.
Nova Poshta Moldova also actively participates in humanitarian aid activities. Since March 2022, Nova Poshta, in cooperation with the Congress of Ukrainians in Moldova, delivered over 10,000 kg of humanitarian aid to charitable organizations and hospitals in Ukraine. It was drugs and essential medical equipment.
What other markets does Nova Poshta operate in?
We currently have our own post offices and pick-up stations in three countries: Ukraine, Moldova, and Poland. However, our Nova Poshta Global can deliver an international parcel or cargo from Ukraine to 200 countries and territories of the world.
Also, for Ukrainians who want to shop on the websites of international online stores that do not offer direct delivery to Ukraine, Nova Poshta Global has developed the NP Shopping service. This service helps people to buy clothes, appliances, household items and more from online stores in nine countries: The United States, the United Kingdom, Germany, Italy, Poland, France, Spain, Turkey, and the Czech Republic, and order delivery to any Nova Poshta post office or pick-up station.
Please tell us about the plans of Nova Poshta for both the Ukrainian and global markets. Which countries or cities are waiting?
This year, we are going to open two new terminals in Odesa and Kyiv. The construction works renewed in the summer. We will continue to automate operational routines to accelerate the delivery.
Nova Poshta will continue its foreign expansion in neighboring countries. In 2023, our financial company NovaPay will launch its mobile app and conquer Europe as a financial service.
We will also improve our NP Shopping service and make it so simple that when a customer enters the app, it will be like visiting a regular online store. We continue to negotiate aircraft for our own airline, and we will be able to tell you more about this later. The plans are ambitious, as always.
In September, NovaPay opened an office in Lithuania. Have you already hired a team? What is the team working on?
We want to unite Ukrainian families and friends separated by the war. We want to strengthen Ukrainian business in the world, and provide foreigners with not only high-quality logistics, but also financial services. To achieve this ambitious goal, NovaPay decided to open an office in Europe.
Currently, part of the senior management is working in Vilnius to form a team. We plan to obtain an EMI (Electronic Money Institution) license in Lithuania. The EMI license gives you the right to provide payment services to customers, open accounts, issue payment cards, and much more.
According to Lithuanian law, in order to obtain a license, a company must have financial monitoring, lawyers, accountants, and other employees on site. We are hiring the specialists who understand the intricacies of the local market and the Baltic countries.
What are NovaPay’s global development plans?
The discussion about entering the international market has continued for several years. As a result, we plan to enter the European market in two significant areas:
- Supporting financial transactions at Nova Poshta offices abroad, similar to our Ukrainian business.
Nova Poshta is expanding and entering European markets. NovaPay’s goal in this project is to support all the financial services abroad provided for Ukrainians, plus cross-border transactions, lending, and many other benefits.
However, for NovaPay to start operating fully in Europe, we must obtain licenses and certification in the European Union.
- We plan to develop a separate financial service, primarily for Ukrainians and secondarily for Europeans, which will be localized for several markets first.
The project’s announcement will depend on how quickly we get the license. We will make a big announcement after obtaining permits and developing the product, which we are actively working on.