The red-and-white logo of leading domestic express delivery firm Nova Poshta is becoming ubiquitous. Its nationwide network of 1,800 branches has spread to nearly 800 cities and towns.
The secret to its success: Meeting consumer demand to ship packages quickly within Ukraine, much the same way that others do internationally.
It bucked the deep recession last year, growing by 20 percent over the previous one, shipping more than 60 million parcels along the way. It was a phenomenal achievement, despite the shuttering of 180 offices in occupied Crimea and parts of the war-weary oblasts of Donetsk and Luhansk.
“We accepted the tragic losses of 2014 as external factors that cannot prevent us from reaching our strategic goals,” co-founder Viacheslav Klimov told the Kyiv Post in an interview.
Russia’s invasion cost Nova Poshta 20 percent of its turnover for 2014. Kremlin-backed separatists ransacked some of the branches in Donbas and used the company’s name to illegally conduct business.
Otherwise, growth would’ve exceeded 30 percent and improved upon figures for 2013.
“We lost a lot of money. In Donetsk we built our first most modern terminal. We didn’t even have time to finish it,” said co-founder Volodymyr Popereshniuk during a lecture at the Kyiv School of Economics on May 21.
Innovation and client-oriented service are driving growth at the firm, key factors that let it thrive during the prolonged economic downturn. Once summer starts, plans are to have 200 shops open primarily inside shopping centers that handle parcels of up to 15 kilograms. Nova Poshta has also set up self-use automatic parcel terminals at Privatbank branches totaling 60 so far.
It’s all designed to make the firm’s services conveniently accessible to customers near their homes and workplaces.
“Development is the medicine against a crisis,” Popereshniuk said. “If you are dynamic, if you are moving, it is easier for you to live through any crisis.”
Employing more than 15,000 workers, the express delivery firm plans to grow by at least 30 percent this year. After starting networks in Moldova and Georgia on the back of the Crimea and Donbas closures, the founders are in the process of opening one in Belarus.
Nova Poshta’s roots start at the Kharkiv Aviation Institute where Popereshniuk and Klimov developed a friendship as students. Klimov became an engineer for Antonov, a state-owned airplane manufacturer.
Popereshniuk joined his family’s confectionary business where the entrepreneur got the idea to start a package delivery service. His family constantly faced problems having their products delivered on a timely basis to customers.
So in 2001, using their combined savings of $6,000, they opened the business in Poltova Oblast in the central part of the country.
Not everything went smoothly. Their first order came only after two weeks, and it was unprofitable for the first 6 years. The two co-founders dealt with a lot of skepticism, said Popereshniuk.
Today the company is a business success story.
Volodymyr Popereshniuk
Age: 40
Nationality: Ukraine
Job: Nova Poshta co-founder
How to succeed: “Never stop. I am very glad that one of our values was always being humble. If you do not bring benefit (to society) then no one will pay you
It had Hr 1.6 billion in sales last year while servicing around 300,000 corporate clients and 7 million private ones. Two years ago, the company had 20 percent market share, according to the Ukrainian Association of Direct Marketing. Popereshniuk believes it is now closer to 30-50 percent.
Though they consider Ukraine’s state-owned Ukrposhta postal service a competitor, it isn’t a direct rival. Nova Poshta focuses on express delivery while Ukrposhta mostly delivers regular mail, and also distributes media publications and pensions.
Not sitting still, the company rebranded in 2014 and started a money transfer service under the trademark Forpost.
Personal improvement also has contributed to success. In 2004 Popereshniuk pursued a master’s in business administration at the International Institute of Business in Kyiv. A year later, his partner followed suit since both felt they lacked management skills. The pair also visited trade fairs in Asia and toured the U.S. to observe how logistical giants UPS and FedEx operate.
“All of this was cemented with the deep conviction that U.S., European and Asian companies are multifold times more effective and productive than our company,” Klimov said.
Their main challenge this year is to keep improving customer service as their business grows. “Often corporations… forget that their ultimate goal is to satisfy customer demand,” Klimov said.
“Learning from everyone” and being humble is the solution, according to Popereshniuk. “If you do not bring benefit (to society) then no one will pay you money.”
The Ukrainian customer is demanding, which forces the company to make improvements in quality and service, Klimov said.
Currently, Nova Poshta offers door-step and office delivery, as well as pick-up service at branches.
Rozetka, Prom.ua and practically all of the leading players of e-commerce in Ukraine are Nova Poshta’s clients. Assortment, storage, package labeling are also available as a Nova Poshta service. “E-commerce, with its many demands, teaches us a lot and forces us to change,” Klimov said.
To develop further, Nova Poshta is thinking about advancing to planes and even drones for delivery. Deliveries are now done by trucks and vans.
Both founders want to see minimal government involvement in the business environment. “They (state-officials) need to come and create the conditions and that’s it,” Popereshniuk said.
Changes have only started to happen and the business environment is already benefiting from them, Klimov said. “People began to listen to businesses, the influence of business became stronger,” he said.
Klymov believes Ukraine is destined for success. “Ukrainians just need to learn a little how to control themselves via voting, and how to publicly control the government via businesses,” he said.
Kyiv Post staff writer Ilya Timtchenko can be reached at timtchenko@kyivpost.
