Russia is one of the most important and leading markets for Kärcher
The slogan “We are making the world cleaner!” is used by us not only for production by the German company Kärcher, the name of which is quite often taken as a synonym for cleanliness, but it also reflects this concern’s philosophy. Being a world leader in the development and production of cleaning technology, Kärcher makes a wide spectrum of equipment which is used in 65 countries, and the concern’s annual returns exceed 2 billion euros. The general director of Kärcher’s Russian branch, Oleg Minaev described the concern’s work in Russia to Capital Ideas journal.
When did the Kärcher company come to Russia? What expectations did the company have for the Russian market, and were they justified in the end?
Kärcher’s official Russia branch was opened in 2004, but this was preceded by a preparatory stage. It is probably hard to believe now, but not many were aware of the concern’s production in the 90’s in Russia. Indeed, even the standards of cleanliness were entirely different. I traveled to various cities with a pressure washer and showed people how it worked. Then the first truckload came from production and potential distributors were sought out. Later the concern’s management said that, of course, they were certain of success, but did not expect this dynamic.
Returns in 2011 exceeded 100 million euros for the first time. The symbolic “sound barrier” was broken, and by 2013 Russia became the fourth largest market in the world for Kärcher by size, after the US, Germany, and France. The main goal was for production to be perceived in combination with the brand’s values, which have their own traditions and rich history. The drive for stable development is one of the fundamental laws for the basis of the concern’s philosophy. Therefore, along with the development of the sales network, social projects, a responsible ecological policy and high standards of service were important for us. Currently, Russia is one of the most important and leading markets for Kärcher.
How is Kärcher’s work in Russia organized, which of the company’s structures are active in the Russian Federation? Are there are any local branches in Russia’s regions, and what functions do they fulfill?
Aside from the main office, which is located in Moscow, the company has 11 regional branches (Krasnodar, Yekaterinburg, Rostov-on-Don, Samara, Volgograd, Stavropol, Tyumen, Surgut, Sochi, Saint Petersburg, Kaliningrad). Work is conducted through a network of dealer centers, which do sale and service. This network covers the entire country, as we are convinced that good, reliable equipment should be available to all, regardless of what region you live in.
Today we have 3 logistics centers which guarantee uninterrupted – equipment and parts delivery to more than 100 Kärcher centers in 60 cities. There are more than 150 service centers in 95 cities. This is a fine-tuned system which gives every client the most important thing – trust in Kärcher.
Who is your main client in Russia?
There is no one answer to this question, as all our clients are divided by sector and focus. Kärcher is the world leader in cleaning equipment production for both household and professional needs.
B2B clients are composed of industrial and production manufacturers, cleaning and transport companies, hotel and logistics complexes, agricultural companies, state institutes and communal services. The choice of equipment depends on the specific task, and the range of solutions is very broad – from devices for cleaning with dry ice, vehicle cleaning systems, sewage and drinking water treatment systems, to pre-integrated complex solutions for cleaning large cisterns and tanks.
A separate and significant group is household equipment: high pressure washers, vacuum cleaners, garden equipment, window vacs, steam vacuum cleaners and much more.
Which well-known Russian companies, firms, or local branches of companies widely use Kärcher’s equipment? Please provide a couple of examples.
In terms of fuel and energy companies, we work closely with such giants as Lukoil, Surgutneftegas and Taneco. In the metallurgy field there is Evraz,Magnitogorsk Iron and Steel Works and Rusal. Our equipment guarantees the cleanliness of such companies as Kellogg, Cargill, Nycomed, Tarkett, Alfa Laval, Renault, Scania, Coca-Cola, Liebherr, BASF,Toyota, Mercedes, Mars, Cherkizovo and Kamaz. In construction, we work with, for example, the Russian branch of the large Europe concern Strabag; in trade with Magnit networks, Azbuka Vkusa, OBI, Kesko and Auchan. Among transport-logistics companies our clients are Russian Railways, Kuehne + Nagel and the Moscow Metro. In the sector of operation and maintenance of buildings we have Chisty Svet, Idalika, ISS, in the hotel and restaurant business – Marriott, McDonalds, Sodexo and Carlsson. This is far from the full list, there are also non-commercial companies such as the Hermitage.
What household equipment from Kärcher is greatly sought after in the Russian Federation?
The most popular category is high-pressure washers. The word “Kärcher” has already become a common noun for this category of equipment – people call all car cleaners this, regardless of the brand. This is better than any statistic for proving Kärcher’s lead in the Russian market for high-pressure washers.
This year our window vac – one of the most well-known products which was first patented and introduced to the market by our company – is celebrating its 10 year anniversary. A special limited-edition line in black was released especially for this event.
In general, the whole household equipment division is developing: vacuums, steam cleaners and equipment for dry and wet cleaning. With the onset of spring demand traditionally increases for pump stations, irrigation systems and other solutions for out-of-town houses and cottages.
What forms of business do you practice? How many shopping centers does your company have in the Russian Federation. Do you sell online?
We made sure that the client could acquire our equipment by any means convenient for them. First, there is our retail network “Kärcher center” and our stores in large shopping centers (currently there are 5), as well as official distributors – Kareks, Chistaya kompaniya, Kristofer, and others. Second, there are household goods and electronics networks – M-Video, El Dorado and DNS. Third, there are construction stores (Leroy Merlein, OBI, Castorama, Tvoi Dom) and electric tool shops (Bigam, Enkor). For fans of virtual shopping there are online retailers (like Citylink and Ulmart) and, of course, our own internet store which, by the way, have the option for delivery via company ambassadors. In contrast to couriers, company ambassadors are employees who not only bring equipment to your home, but will also instruct you on how to use it and will demonstrate other goods which might be useful.
Have the economic sanctions against the Russian Federation in any way reflected on Kärcher’s business in Russia?
The sanctions have had a negative effect on the general economic situation in Russia and, naturally, the majority of international companies (including Kärcher) without their own production located in the country have been subject to changes in the country’s economy.
Kärcher has many daughter companies in various regions, including in North America, Africa and Australia. Does the concern plan on opening, for example, a factory in the Russian Federation, taking into consideration that a whole series of western companies active in Russia have moved towards localizing production.
The question of production localization is being discussed, but currently no decision has been taken.
It is well know that Kärcher traditionally takes part in socially important events for preserving and protecting historical and cultural legacy, helping to support the cleanliness of monuments and buildings. Among the company’s large projects are cleaning the Brandenburg gate in Berlin, the statue of Jesus Christ in Rio-de-Janeiro and many other architectural monuments. Have similar events taken place in Russia and other countries of the former Soviet Union?
As a market leader, Kärcher company has been working free of charge on preserving historical monuments and buildings for 30 years already. By now we have confirmed our competency by participating in more than 100 restoration projects across the world: the Hermannsdenkmal monument in Deltmond, the London Eye in Britain, the colonnade on St. Peter’s Square in the Vatican, Mount Rushmore in the USA, the Statue of Liberty in New York and many others.
In Russia, the largest project was the cleaning of the unique historical building, the Moscow Rizhskaya railway station, dedicated to the 180 year anniversary of Russian railways. The building was constructed in 1901 and is one of the largest transport hubs of Russia with a daily carrying capacity of 10000 people. The work lasted two weeks, and cleaning the complex-shaped facade of 4000 square meters required a unique solution – a hydraulic tower. The ultimate height at which the cleaning took place was 16 meters. The work was done by an operator, and Kärcher representatives were constantly at the site for supervising and guaranteeing work safety.
I can disclose one secret: right now we are looking at the possibility of restoring other historical sites.
Kärcher proclaims that one of its key values is a healthy lifestyle. Is there any actual embodiment of this in the company’s work in Russia?
Of course it does because these values are close to and clear to every employee. You should see how many people arrive to the office on two-wheel transport during the “Bike to Work” event! As sports fans, we always love to support sports events of different sizes – both as sponsors, and with personal participation. Right now projects for supporting large automobile festivals which might take place in Russia are being examined this year. We traditionally act as partners for the Moscow bike parade, ski marathons, trophy raids and motocross. Our list even includes tractor races!
Well, of course, we also are very proud of our participation in the Olympic Games in Sochi, where Kärcher acted as supplier for the cleaning services. This was an excellent opportunity to check our equipment in the most difficult conditions and once more confirm that our devices have an athletic character. The most well-known sports project in the world which Kärcher supports is sponsoring the Dakar rally.
Created to ensure cleanliness and order, your goods make a real contribution for protecting the environment. Does Kärcher enact any kind of ecological initiatives, including in Russia?
One of the main principles of the company is the production of ecologically clean and safe goods. Kärcher’s system of ecological management was the first one in the field that was certified according to DIN EN ISO 14001 standards. We support ecological projects of a global scale such as the “Clean Water for the World” program, which is implemented alongside the World Wildlife Fund. As part of this program we provide financial support to organizations which build environmental water treatment stations with green filters, mainly in developing countries and countries with transition economies.
In Russia, our annual subbotniks have become a tradition, during which the company and local residents pick up parks and city plots and clean memorials. This useful undertaking is taking on a growing popularity and contributes to the formation of ecological awareness and to the preservation of the environment for future generations.