An individual approach
– In Italy, we produce high quality ladies’ footwear, paying priority attention to the technical side. It all began with my grandfather. In 1962, he became the owner of a factory which at that time was the biggest in our town. Then the factory passed to my parents. I was born and grew up surrounded by shoes.
David de Vicenzi says with pride that all his footwear collections are unique because they are created with the client’s wishes taken into account. The colour range is selected with particular thoroughness, allowing for the season’s trends in colour, and the colours used in clothing collections.
In Samara, I have never had any problems with the authorities or with the criminal underworld. It is a quiet city, and foreigners are always welcome here.
– I think that footwear is an emotional subject, which is helpful in understanding a woman and her perception of the world on the day in question and in the given situation. Furthermore, shoes are an excellent present. And the emotions caused by the very fact of their being a present are aroused even before aesthetic impressions are formed.
Clothing of the Tuiggi brand is also made in Italy and it too is exclusive. It can only be displayed in the firm’s own boutiques. But what brought this likeable young Italian to a Russian province which seems so remote from the Milan catwalks?
Under a simplified system
Many foreigners prefer to start their business in Russia in Moscow or St. Petersburg, where the purchasing power of the population is greater. Davide de Vincenzi followed the same path. The first Tuiggi shop opened in Moscow on Tverskaya Street in 2005.
– Purchasing power here is indeed greater, but the associated costs are proportionally higher! I like Moscow very much, it has a lot of traffic and life is lived at a rapid pace. At virtually the same time, I decided to open a boutique in Samara. But after two years, I realised that it is difficult to control a business in different cities. And I am used to doing this myself. So then I closed the boutique in Moscow and concentrated entirely on the business in Samara.
Samara (known as Kuybyshev from 1935 to 1991) is a Russian city, a provincial centre in the Middle Volga region. Its population is 1,170,000 (making it the sixth largest city in Russia for number of inhabitants). It is a major industrial, transportation, cultural and science education centre. Its main industries are engineering and metalworking. It is 1064 km from Moscow and 3039 km from Milan.
The Tuiggi trademark has been represented in the Samara market since 2005. Tuiggi products can now be purchased in Samara in two boutiques and in the factory’s own outlet. How did Davide de Vincenzi come to start a business in this city on the Volga? After all, it is even further from Milan than Moscow is.
– Of course it was difficult at first, mainly because my Russian was not very good.
As for the business itself, the problems are just the same as anywhere else in the world: leasing premises and staff, advertising and establishing it in the market.
– In Samara, I have never had any problems with the authorities or with the criminal underworld. It is a quiet city, and foreigners are always welcome here.
Furthermore, staff salary costs are noticeably less than in Moscow or Italy. The average salary in Samara is 22,500 roubles (about $700). The same applies to taxes. But the cost of leasing shops here is two or three times what it is in Italy. This is a significant minus, but the pluses are still greater.
Aleksandr Chernenko, managing director of the company "Biznes-instrument":
– I think the medium and small business market in Samara has great potential. According to the Territorial Statistics Directorate for Samara Oblast, there are now105,353 enterprises in Samara, of which 36,650 are private, involved in wholesale and retail trade and repair work.
It is worth noting that the population of Samara is 1,169,284 (as of 2012), that is, almost one in ten Samarans is involved in retail business. This is partly due to government support and the vast amount of investment funds, Some of them could undoubtedly be useful to a foreign citizen, because an investment fund is not only cash support, it also acts as a mentor. The latter point may be particularly important for those from other countries in the Russia of today.
This high level of development of entrepreneurship in our city is also helped by the increase in the incomes of the population. From January to June 2013, this sum was 491,444.2 roubles, whereas expenditure totalled considerably less – 405,675.3 roubles. In June 2013, as compared with the same period of 2012, consumer expenditure of the population in the use of cash incomes increased by 4.9%, but expenditure on making mandatory payments and subscriptions decreased by 0.3%. Over the past six months, Samarans have spent 346.8 billion roubles on buying goods and paying for services.
– For example, my company operates under a simplified taxation system, enabling me to keep track precisely of all tax payments, since tax is levied per square metre of trading area. And of course, the main plus is our esteemed clients, who show a great desire to acquire my new collections, which inspires me to create new ones which are even more stylish.
The main thing is to work!
What part did the economic crisis gripping Europe play in the Italian’s desire to run a business in Russia?
– I came to Russia long before the crisis, and my desire to conduct business here was in no way connected to the economic situation. Furthermore, it should be noted that the Russian economy today is closely bound up with that of Europe, and Europe’s problems affect Russia too to a certain extent. But any problem has a solution. You just have to work, that’s the main thing!
Any problem has a solution. You just have to work, that’s the main thing!
Incidentally, not only industry, but also commerce, is well developed in Samara. There are about 5,000 shops and stores here. How do you manage to compete with them?
– I am personally busy with the design and production of my footwear, which I sell exclusively in my own shop. I have an exclusive product. It can be bought in my shop and nowhere else. Not every enterprise can offer that to the customer.
But can you compete with the Chinese products which are flooding the market, and persuade Samarans to buy high quality goods? This question also fails to catch Davide out. He agrees that Chinese goods really are flooding the market in all countries. But in Samara, as everywhere else, there are customers who only want Italian quality.
By the way, one of the Tuiggi clothing and footwear boutiques in Samara is on Kommunisticheskaya Street. Is this a sign that capitalism and communism can live together in present-day Russia?
Aleksei Shestoperov, Deputy Director of the Department for the Development of Small and Medium Entrepreneurship of the Ministry of Economic Development of Russia:
– Taking into account that the greater part of small enterprises in Russia are operating in the field of trade (primarily trade in consumer goods), it is easier to get together and fill in the set of documents required to conduct commercial activities than in other fields (industrial, for instance). Firstly, the firm has to register and be put on account in the tax inspectorate, and pass through registration in off-budget funds. You have to obtain a certificate from the Fire Inspectorate and a sanitary-epidemiological certificate from Rospotrebnadzor. An important procedure is the registration of the cash register. Any shop needs a sign. For this you need a permit to display outside advertising. If a shop is opened by a foreign citizen, the pack of documents is the same. The only other thing you need is a work and residence permit for Russian territory.
The cost of opening a shop depends on many factors. Firstly on the speciality of the shop: what clothing will be sold in it? The business plan must answer this question, and many aspects of expenses depend on the answer, in particular expenses on premises and on the equipment to be used. The cost of equipment includes buying and fitting a counter, mirrors and fitting rooms, and also on the acquisition of other essential requisites (such as coat hangers and dummies). Personnel costs are certainly an important heading. You will need salespeople and shop-floor staff, though you can economize on these costs if you personally are going to take an active part in the shop's work. You will also have to put money into fulfilling essential requirements (fitting a fire extinguishing system and servicing the cash desk equipment, for example). Furthermore, do not forget communal payments. The purchase of the first batch of goods also comes under expenses. Altogether, it has proved in practice that to open and start up a clothing shop of small floor area (40-50 sq.m), free capital of at least $40,000 is needed.
– I think that capitalism and communisms are purely historical terms. Nowadays, throughout the world, including in Russia, one can only speak of globalisation.
At the same time, the Italian considers that globalisation should not suppress fashion. Fashion, after all, is not unconditional subordination to modern trends. Therefore, in creating collections, he does not just follow the trends in fashion, he follows his own feelings too. Fashion is dictated by inspiration. And the people of Samara seem to like this. He constantly reminds clients that it is extremely important to learn how to choose, from the numerous collections offered by well-known designers, precisely that which corresponds to their own image and character, and underlines their individuality, i.e. their style. That’s what good taste is all about.
His efforts are bearing fruit. More and more Samarans are rejecting cheap mass-produced goods and acquiring at least a few stylish articles from Tuiggi for their wardrobes. This shows that the fears of Western marketing experts that no-one in the Russian provinces want stylish shoes and clothes from Europe are quite unfounded.
– My work takes up the greater part of my life. It is my calling, and gives me great satisfaction. I am always in search of new ideas. I like travelling about in the world, visiting other countries and cities and getting to know people. That is how new images are born and reflected in my collections.
A new policy
Does he intend to develop his business, and go to other Russian regions?
– Seeing the success of our boutiques, and in view of my seven years of experience in Russia, we are now starting a new franchising policy, to enable the Russian investor to benefit from our experience. In seven years of working in Russia, in constant contact with clients, I have come to understand well the specific requirements of the market from the design point of view. In producing a new collection, I take all sorts of factors into account, from the wishes of my clients to the region’s climatic conditions. This helps me give the market just what is needed. Many designers, in creating their collections, base them only on aesthetic factors, sometimes not even knowing, for example, that a rubber sole on demi-saison footwear freezes at minus 20 degrees and becomes very slippery. I have paid attention to this fact and have solved the problem by selecting a material which does not become hard at low temperatures for the soles of my demi-saison footwear.
In producing a new collection, I take all sorts of factors into account, from the wishes of my clients to the regions climatic conditions.
This is far from being Davide’s only trump card in the market. And he is willing to share his knowledge with new business partners. We are of course talking about franchising here.
– Anyone opening a Tuiggi franchise boutique can make use of all my experience, and also have professional assistance in selecting premises for a shop and working out designs for it. Everything we offer for the franchising collection has been developed specially for the Russian market. Delivery of the collection to the shop door means that our partner does not have to worry about the inconvenience of filling out import and delivery documents.
The Italian also considers that a Russian partner is not essential for conducting a business in Russia. It is quite sufficient to have a knowledgeable and experienced consultant.
The Land of Long-Legged Lovelies
The Italian very much likes Russia in general. He feels at home here.
– I am probably not the first to say that from the beginning, Samara amazed me by how many long-legged beauties there are here. Because I am a designer, I not only admire beautiful legs in women, I also mentally measure them up for my new creations.
What Davide does not like is bad behaviour in traffic, to which he says he will never become accustomed. But there is hope that Russian drivers will come up to the European level one of these days. However, on the whole, he is quite comfortable in Samara, particularly in summer, when he can take an easy morning run along the river bank or dine in the evening with friends at an open-air restaurant, enjoying the splendid view of the Volga.
– I think Samara is Europe. Stylish, lively and striving to dress ever more attractively. And I help it to do this.