Must Have, a homegrown women's clothier, employed only 30 people in 2014, its fourth year of business. This year, despite war and recession, the firm has 130 employees.
The secret to its success? Patriotism, politics – and price.
The EuroMaidan Revolution that toppled pro-Kremlin President Viktor Yanukovych and Russia’s war against Ukraine have prompted Ukrainian consumers to support their national merchants, rather than importers.
Of course, along with national pride becoming chic, simple economics plays a dominant role as imports have become prohibitively expensive for more consumers after the hrvynia lost more than half its value in the last two years.
“Five years ago, when people heard that something was made in Ukraine, they thought it was of low quality,” Must Have spokeswoman Alina Yelovenkova said.
No longer. Now promoting Ukrainian origin is a good way to make sales.
One of the first people to notice changing consumer tastes is Yuliya Savostina, a Kyiv-based journalist. In 2013 she started an experiment. She spent one year trying to buy exclusively Ukrainian-made goods and blogged about it.
Eventually, noting the popularity of the blog, she opened a shop that sells only domestically produced goods. “There was a demand,” she said. “I waited for a long time for someone to open it. When no one did, I did it myself.”
The first store named Kupuy Svoye (Buy Local) opened in Kyiv in December. It sells goods from 60 producers all over Ukraine. Wine, handmade chocolate, peanut butter, laundry detergents, shampoo and other items are for sale.
The store broke even within two months. Inspired by the performance, Savostina opened two more shops in the residential neighborhoods of Obolon and Poznyaky, choosing small spaces near metro stations.
While Savostina concentrated on fast-moving consumer goods for the sake of simplicity, other stores focus on clothes, footwear and accessories of Ukrainian origin.
A range of small stores, usually one-room spaces in the city center, popped up in 2014 to sell mostly women’s clothing and shoes made by aspiring local firms and designers. Bigger ones, like Must Have or shoemaker Kachorovska, sell from showrooms and online.
Kachorovska’s waiting list is at least 1.5 months long. As of May, Must Have had 12,000 items in stock. Besides other parts of Ukraine, Must Have sells in 15 cities in Russia.
“Ukrainians have always preferred their food locally made, but when it came to clothes or shoes – the preference used to be with Western brands,” said Maksym Mashlyakovskiy, head of consumer goods market research at GFK Ukraine.
Mashlyakovskiy said cheaper price still is the main factor.
“One will not buy something of poor quality and high price only because it’s Ukrainian made,” Mashlyakovskiy said. “Patriotism plays a role, but rationality comes first, especially in times of crisis.”
Kachorovska, Must Have and most of the up-and-coming brands have kept prices competitive or cheaper than mass market brands, despite having to import some materials.
Every advantage helps at a time when, according to GFK Ukraine, consumer confidence has decreased twice in one year.
While none of the known Ukrainian brands went out of business in 2014, several international fashion retailers left Ukraine, including retail giants like New Look and Esprit. Others cut the number of stores, like Gap.
While that trend may flatter Ukrainian producers, they still have a lot to learn to compete against international retailers. Savostina said she had problems with suppliers not taking the business seriously. Some violated agreements, failed to make deliveries or demanded up-front payment, she said.
“It’s now time for Ukrainian producers to learn and grow,” she said.
