In this episode of Start Global Insights, Maksym Pylypenko, the head of the sales department at Collar, a Ukrainian manufacturer of innovative pet products shares the insights from the company's global journey.
With a history dating back to 1995, Collar has grown from a small company into a global powerhouse with 500 employees and distribution to 78 countries. Maksym shares Collar's remarkable journey of international expansion, innovation, and resilience through the challenges of war.
Highlights from the episode:
- The strategic move from local to global: Why Collar chose to expand beyond Ukraine's borders.
- How Collar's commitment to innovation and quality set them apart in the international pet product market.
- The pivotal role of trade shows and industry meetings in building brand recognition and trust with global partners.
- Navigating the complexities of international laws and the importance of adaptability in packaging and marketing.
- The inspiring partnership with NASA and Warner Brothers, and how these collaborations have impacted Collar's brand.
Maksym also shares the challenges faced during the russian invasion, revealing how Collar's international partners rallied in support, and the adjustments made to keep the business thriving. He offers valuable advice to Ukrainian exporters embarking on their global journey, emphasizing the need for a balance between preparation and real-market testing.
For pet owners and enthusiasts around the world, discover how Collar's space technology-infused products could be the next best thing for your furry friends. Tune in for an insightful conversation that crosses borders and shows the spirit of Ukrainian innovation and resilience.
Host, Dmytro Shvets https://www.linkedin.com/in/dshvets/
Explore Collar's products: https://www.collar.com/
You can find their products at official NASA shop under the brand name WOWDOG here: https://officialnasagear.com/pet-gear/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I'm Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
from different countries about local business secrets and international expansion experience.
Today my guest is Maksym Pylypenko, the sales department head of Collar.
Collar is a Ukrainian manufacturer of innovative pet products established in 1995.
The company has evolved into a global entity with 500 employees and distributing its products
(00:33):
across 78 countries.
Collar has successfully developed 16 unique brands for pets and opened international offices
in Poland, United States, and China.
This is a brilliant example of a resilient Ukrainian company that survived Russian invasion
and increased its presence on global markets despite all challenges due to the strong vision
(00:55):
and innovations.
And today we will hear their story of international expansion.
Hi Maxim and welcome to the show.
Hello Dmitry, I'm glad to be here and thanks for such a nice introduction.
Can you briefly tell what is your role in the company?
What are you responsible for?
Well, I came to the company 14 years ago and started as a marketing manager for Ukrainian
(01:21):
part of sales.
And back that time the export was really, really small.
We have a couple of clients abroad.
And the company offered me to start working with some expert clients.
Then I switched to being an expert manager and then step by step we developed a separate
(01:42):
department that works with export.
We have a lot of employees in that department.
We have logistics that provides us with the export import procedures and I am in charge
of the sales part of that export.
So I'm in charge of European sales and I have a colleague.
He is in charge of sales to US region and Asian region.
(02:04):
Okay, so quite a big experience you have within the company.
Maybe you can also describe a bit for our listeners what are the products that your
company is producing and who are your clients?
Well, we are the manufacturer of products for pets, for dogs, cats, aquariums.
(02:29):
So it's mostly colors, leashes, dog clothes, dog toys, stuff like that.
Our company managed to be competitive due to the essence of the company is what is innovations.
So we have an R&D department and the vision of the company owner that what we should do
(02:52):
is we should provide products to the market that have a high level of innovative technologies,
innovative thinking to those.
So we either using some new technologies to the old products or new materials or trying
to develop new products to be able to stand out from our competitors, especially abroad.
(03:15):
Can you tell what was the reason why the company seeing the big potential in Ukraine decided
to go to the global scale?
It was several factors due to that.
One of them was the difference in the currency value.
So getting revenue in foreign currency is always like a warranty policy for a company
(03:39):
in times that are rough.
So this is one of the reasons.
And the other reason that while visiting like first international exhibition company owner
and some top personal of the company who visited it saw the size of the market and the perspective
(04:00):
that it can give to the company because in Ukraine, we already at that time had a pretty
good part of the market.
We were well known.
We have several like brands, for example, our cat litter called Supercat.
It's well known and it's already have a good share of the market.
And on the market where you present in a big share for a long time, it's harder to grow
(04:26):
fast.
So we can grow a couple of percents each year and that's okay for the steady market.
But in the international market where we come in as a new player, we can grow 10%, 100%
a year because we get in a new share of the market.
So I guess those two reasons were that we decided to go international and the innovation
(04:52):
as a tool going international was developed during like first three, four years doing
that.
And if we were talking about this time, so this is like 15 years ago and the expert activities
among Ukrainian companies at that time, especially for a small business was not so highly developed.
(05:15):
Did you have any strong challenges and how did you get this understanding?
How to go abroad?
What steps to take and what you have begun with in this journey?
Well, to be honest, back that time, we didn't have like a map of steps that we followed.
We didn't have the idea that those are the steps that 14 years we are going to do.
(05:40):
And we were developing by taking chances and checking what works best.
And like one of the major changes we made and that I can mention as a really successful
step, first our export, all of our export were done directly from Ukraine to our customer.
(06:01):
And that's the way we are doing now, for example, for Asian regions, for like US sometimes.
And that successful step was back that time, the problem was that you not only have to
find a customer, work with him on the price and explain him the value of your products
(06:23):
and the competitiveness of your products.
You also have to make him sure that the company is trustworthy.
And back that time, Ukraine was not well known and all of those points were hard.
And then you will have to explain to him that, hey, guys, you have to do direct import from
(06:43):
Ukraine.
And Ukraine was not the popular country to buy products from.
They didn't know any procedures.
Most of our customers said, yeah, we can do that from China.
We know everything how to do that.
And we do not know how to do that from Ukraine.
And that was a big barrier on the path to export.
(07:03):
And one of our successful steps was to open our own companies as we have now in Europe
and US.
So speaking about Europe, first, we opened a company, the same owner as we have here,
opened a bank account, hired Polish accountants.
(07:26):
And this way, we had a huge opportunity when we're looking for a customer.
And when he places order, we can say to him that everything is manufactured in Ukraine,
but all the economic relations and the documentary relations will be done inside the European
Union.
So there are no differences for you with any your current procedures.
(07:53):
And that was a huge, huge advantage that we get.
And now we already have also and back that time, we also hired outsource warehouse where
we brought products.
That was not our warehouse and there were no our employees there.
It was like a hub.
We were getting like 10, 20 orders from the clients, putting them in one car, bringing
(08:17):
to that warehouse and loading and giving them directions where to send those products using
European carriers.
We still do that for our clients.
But since the beginning of the war, we also opened our own warehouse, rented it, we hired
our own Polish employees.
So we and brought the stock of products there.
(08:40):
So that's the next our advantage that we can supply products faster using the stock we
have there.
So do I understand correct that your clients that you were serving through your European
Department and warehouse were the B2B customers, your partners that were selling that goods
to the direct direct to the B2C customers afterwards?
(09:01):
Yeah, all our customers are B2B clients.
So it's either pet shop.
That's the smallest of our customers is a pet shop.
He buys like our our minimum order is 500 euros and pet shop order rate through our
B2B portal online.
He can pick the products, order them and speak to our manager.
(09:23):
We will deliver them.
Then we also do have customers like pet shop chains.
For example, in Britain, we are supplying pets corner pet shop chain, they have 140
huge pet stores across the Britain.
And we deliver in them to their main warehouse in a like in a one truckload and they distributing
(09:47):
to their own pet shops.
And one other way we also supply our customers is like we have a wholesale partner, some
kind of a distributor who works with his region and we supply him a truckload of our products
that he chooses.
And then he distribute them to his own clients, which are also pet shops.
(10:12):
So that's the other way we also work.
Clear, clear.
You are now exporting to 78 countries.
How did you choose?
How did you made the selection of the countries?
And what was the approach?
First of all, let's make clear 78 countries is the number of countries we ever exported.
(10:33):
Some of them were like one time expert because sometimes our products doesn't fit the market.
Sometimes the customer just looking for something and trying lots, lots of different products
and manufacturers.
Right now we have about 20, 30 countries that we do supply regularly.
Still quite a big number.
(10:53):
Yeah, quite a big number and like the most powerful of the regions are surely European
region, US sales, also Asian sales.
We have a really huge customer in Japan, even though the country is small, but the market
there is big.
Just before our recording, I made an episode with two parts with Japanese expert and we
(11:19):
exactly discussed that they love pets and they just adore their dogs and cats.
So this is quite a good market.
So for those listeners that would like to understand more the Japanese market, look
for the episode about Japan and maybe you will find the color production on the shelves
(11:39):
of Japanese supermarkets and pet stores as well.
Yeah, that might happen.
One of our most popular products, Puller, that's a purple ring for dog training.
That's one of the products our partner in Japan sells a lot.
And as you mentioned, Japan is really interesting market due to the culture.
(12:01):
They have a culture of caring for pets and high level of care for pets.
But our success on that market was through our partner because he is a wholesaler.
We do not deal with separate pet shops because to do that you have to have a deep understanding
(12:21):
of the culture of the market, of the language, and all of that is provided by our partner.
We communicate with him, we do wholesales and he distribute that to pet shops and provides
marketing activities through those.
Coming back to the country choice, how did you choose, what was the approach of choosing
(12:42):
the countries?
There were two main ways that we used while approaching.
First one was thought out approach.
It's when, hey, let's think where we should go.
And obvious choice was Europe because Europe, lots of countries, different countries, but
(13:03):
united by one currency, by one laws of import-export and being really close across the border going
to Poland.
So that was like first and obvious choice and we opened their company and that was really,
really powerful thing to do.
The second country done the same way was US.
(13:25):
And even though lots of difficulties due to the distance and delivery, due to the different
laws much more different than ours or European, but the size of the market is so big that
it worth it.
So mostly those two directions were chosen by us and pushed by us right now.
(13:52):
Did you narrow down in Europe because Europe is also quite a bunch of countries with different
mentality and I don't know, the number of pet owners, et cetera?
To be honest, we did not.
We always thought about that and tried that, but we really did not because the size of
(14:14):
the market is huge and we work on the principle of the bottleneck.
So we looking at the factor that stops us the most and try to overcome that.
And at that time, and that was the factor of delivery, export-import procedures and
getting those boundaries of the customer.
(14:36):
When we did that, and that's probably the point I would like to mention later on in
our communication, but one of our main ways to get new customers is exhibitions, international
pet exhibitions.
And there are customers from all the countries.
So we just went with working on those exhibitions, displaying our products and all the rest of
(15:02):
the concentrations were worked out by itself.
Lots of customers are coming and some countries like our products more.
Some markets with, for example, Scandinavian market, the price expectations there are really,
really nice for exporters from Ukraine because they can pay high price for their top quality
(15:27):
products.
And it happened so that by itself, we have a nice presence in Scandinavian market, but
we never like aim there intentionally.
So this is the second way that works for us.
The same way works for Asian region.
We do have a department that works for Asia and they just try to reach all countries,
(15:50):
all customers, visiting exhibitions, connecting to them through emails, through like international
online resources.
But then it's like the invisible hand of the market that works for us narrowing down the
countries we are present at.
(16:11):
So in fact, you used exhibition trade shows to narrow down the country choice.
Yeah.
So that was the filter for your focus markets.
I will say that the trade shows are the funnel that taking the clients to us and then our
competitiveness and characteristics of our products are the mesh that divides and narrows
(16:39):
down customers for us.
For example, we have less presence in countries like Romania, Bulgaria, because their price
expectations are different.
They will eagerly buy products from company Trixie, which brings everything from China
and sells less quality, but much less in price.
(17:03):
And our products are innovative, are high quality, and we never try to associate ourselves
with like the cheapest product because that's first of all, that's not our approach.
Second of all, that it would be really hard to compete with China this way.
(17:26):
And using those, it's by itself narrowed down the number of countries that are eager to
work with us.
But still there are lots, lots of possibilities and lots of room to expand even at those countries.
Okay.
How did you find apart from the trade show?
When you realized that, for example, Sweden is the potential market for you, how did you
(17:52):
find these partners, distributors, pet shops?
What were the channels and the approach for doing that?
Well, as I said, trade shows are the most successful channel for us.
The other channel is industry meetings.
We've been visiting for, I guess, 13 years already industry meeting called Global Pet
(18:18):
Forum, which is a conference organized by oldest European magazine, pet product magazine,
called Pets International.
And the third one I will say is online presence and European printed magazines.
And also there is an advice I would like to give if somebody will try to do the same.
(18:42):
Keep in mind that first about three pet shows, three years, you will be getting less customers
because in Europe they are looking if you're trustworthy, if you come into several shows
in a row, and then if they see you, if they recognize you, if they know you, they will
do business with you.
(19:03):
So from the first show we got about 100 business cards, but we get only about one order, one
partner.
And we spend much more money and time into the show than we get back.
But the next year it was better, the year after that it was better.
And that's the thing you should expect.
(19:25):
So this is kind of a long-term investment into growing global, yeah?
Right.
Long-term investment and you should have an amount of investments to do that.
You should be profitable in your current business, get some money saved to start export because
you will have lots of things to adjust like packing, like your documents being connected
(19:51):
to the laws of the countries you export into, different documents that allows you to export.
And all of that takes time, all of that takes money to pay for the specialists.
So that's the thing you should be expecting for three years and a couple hundred of thousand
dollars to spend that.
(20:12):
That's a really interesting notice that you made because in most cases what I hear now
is the expectation of potential exporters is to have quick money from export.
Yeah, like we are now losing the Ukrainian market, we don't have the ability to earn
here.
So the cure for that might be the export and we are expecting quick money from that.
(20:35):
But reasonably it is not so quick, yeah?
So you need to have patience, you need to have investments that you will put in that
to have the result afterwards that will pay back this activity.
Yeah, sure.
It can be a quick money, but that will not be a steady flow.
You can go to the exhibition, especially if you're not used to B2B export or you're not
(21:02):
that big in Ukraine, you are going to international exhibition, you're exhibiting there, you're
getting one client and you have an order of hundred thousand euros.
That's a nice money, that's a nice order.
And if you're selling in Ukraine about like 20,000 euro a month, that's like a jackpot
for you.
(21:23):
But you will not be able to copy that result going to the next exhibition, next exhibition.
It's like a lottery and a chance.
Okay, so you have chosen the regions or directions where to play and then you've got this organic
filtering through the exhibitions about the markets, the potential markets.
(21:44):
And then I suppose that your way was to invest in PR, in brand awareness through these magazines
and online presence.
Can you tell a bit more about that?
Yeah, that's an interesting thing because in general, it would be the same exact thing
I've just told about export.
It takes time.
(22:05):
We started by going to the exhibition and there those magazines are coming by themselves
because they're also looking for the clients.
And we set up an advertisement plan for like a year ahead and to be honest for us, those
prices were pretty high.
(22:26):
We do one time under advertisement and then next month they say, hey, let's do that again.
And we're saying, no, we don't have that much of a budget.
We will go with other magazines this time.
And they offer us something.
Most of the time they say, hey, let's do one more advertisement and then I will get you
two news blogs next month and the one next month free.
(22:49):
Okay, we say, okay, let's go with that.
And slowly we established firstly those relationships.
And a couple of years ago, I guess four or five years ago, a company established a separate
PR department.
And what they've done is a really, really great thing.
They established relationships with most of those media when we advertising for free.
(23:16):
How did they do that?
Because those media are desperately looking for information.
Their resource is an information.
So right now our PR department have like, I guess, more than 10 huge media over the
world in US, in Britain, in Europe.
Our PR department sending them newsletters, for example, hey, guys, we are going to that
(23:40):
exhibition.
We will have that new product there.
Or our R&D department announced that we are partnering with NASA.
And I have to say that paid advertisements work worse because when it's a news article,
when it's some overview of the market mentioning our new products and our presence at the exhibition,
(24:05):
it gains much more trust from a customer than just a paid advertisement that says, hey,
our products are great.
Please buy them.
That's the content.
Can you tell a bit more about the NASA case?
I know that you have this partnership with NASA and I think that you are the only one
Ukrainian product that is sold on NASA website.
(24:27):
Can you tell this story?
How did you come to NASA and how did you agree about that?
That's an interesting story because personally, I am as a sales department found out about
that when it's already been done, when we have that partnership.
It was due to one of our guys from R&D department.
He somehow visited NASA page and he saw those symbols NASA using and seen information that
(24:56):
NASA can provide you with the right to use those symbols.
At the time, we were aiming at the US market, looking for the ways to expand our presence.
In the US, everybody loves NASA, NASA symbols, all that space program stuff.
(25:16):
He contacted NASA through the contacts provided at their official webpage.
He started communicating with them and asked, hey, guys, I know you have some kind of program
where you give out those rights for free.
It's a free way to get rights to use their symbols and logos.
(25:40):
They said, yeah, but there are some rules that you have to meet.
First and foremost, they have to check if the quality of the products are okay, if the
company is okay.
I believe our R&D sent all the information about the company, links to our web pages,
(26:01):
some samples of the products.
The representative at NASA said, yeah, okay, we like the products, we like what we see
about the company.
There is a letter that we agree for you to use our symbols.
We started doing that.
Then they came to us by themselves and said, hey, that's a webpage that sells different
(26:27):
products with NASA symbols.
In the US, we also have a huge culture caring for pets.
We see that your products are awesome.
Can we get them into our range?
We surely said, yeah, that's interesting for us also as a promotion, as being present at
your webpage.
That's the way we partnered with NASA.
Great, great story.
(26:49):
Do you agree with NASA that if they will send some dogs or cats to the space, they will
wear your collars?
Not really, but we have some products connected to that.
For example, one of our collars and leashes called Evolutor being the strongest collars
and leashes on the market.
(27:10):
Our R&D department using the same space alloy that NASA and Boeing using in building spaceship
and aircraft.
Those aluminum alloys that are high density and that are really, really strong, but at
the same time light, they are used in buckles and hooks in those.
We have a direct connection with the spaceships and aircrafts also.
(27:34):
Amazing, amazing.
You have space technology in the productions for dogs and cats.
That's crazy.
I know that you also got the license of DC Comics.
You have the pictures of super heroes on your products as well.
(27:54):
That influenced your sales and the brand awareness in the global scale.
Yeah, I will say that it did.
That's much more complicated, much harder than we have with NASA.
And I can tell you that there are lots of rules and technical issues you have to do
using those logos.
(28:15):
Okay.
So your products are approved by NASA and they are also approved by Warner Brothers.
Coming back to your roadmap and your journey, your global journey, what were the biggest
challenges that you experienced and maybe still experience and how did you overcome
them?
(28:35):
Well, thinking about that back the times, nothing of it seems hard now.
It seems like, yeah, that's the things we've done and the things we had to do.
But right now I will say that obstacles caused by Russian invasion and by war are the most
(29:00):
complicated for now.
But I really, really believe and hope that we already overcame the most complicated.
For example, when Chernihiv was surrounded and we went to Ivano-Frankivsk and rented
their warehouse and took all of our products from Chernihiv there.
(29:23):
And we restarted expert eventually from Ivano-Frankivsk.
And then eventually when Chernihiv was freed by Ukrainian forces, we came back.
How did the war influence the attitude of your partners abroad?
Were they helping you or did you lose any contracts because of that?
(29:47):
It was both.
It was both.
And at the very beginning, we had really, really huge support.
There were people from our current customers that say, hey guys, we cannot imagine what
you're going through.
We would like to support you.
(30:08):
Let us do the prepayment.
They usually were buying with like 30 days delay.
And that was a huge support.
We had people just sending money to our account, not for orders, but to support us.
Through that type of support, our company managed to communicate and to establish relations
(30:33):
with the Japanese foundation that helps to rebuild Chernihiv.
And this foundation was found by our Japanese distributor.
So this is the way our business relationships and support of our partners helped us not
only in business, but helped us to support our city and our country.
(30:55):
And also there is a drawback there, other opposite way.
We lost some clients.
And even during the war, we are coming to international exhibitions and showing that
our company still works, that we are supplying, and that helps to change the opinion and get
back the trust of the customers.
(31:18):
From the point of view of your journey that you have now already, more than 15 years of
going global, what kind of an advice would you give to Ukrainian exporters that are just
starting this journey by themselves?
What kind of do's and don'ts?
What you should do and what you should definitely not do.
(31:41):
Well, I think that what you definitely should do, you should try to be prepared for the
next steps, try to make a roadmap.
You should be ready to invest.
But I also advise not to overthink, because sometimes it's a really tempting way to do.
(32:08):
I will be getting ready for years.
I will be looking through our packages.
I will be tweaking all the products to the way I think it will fit the European customer.
Well, to be honest, if you're not living in Europe, if you're not hiring European marketing
managers, you will never know exactly what the customer in Europe knows.
(32:32):
You might be close to that, but you will never know exactly.
So in my point of view, it's much better to get ready at some level to adjust your packaging
to the languages needed, to adjust your packaging to the basic law requirements needed, and
then to introduce your products into the market at one, two pet shows and to see how the market
(32:55):
reacts.
And most of the implementations we have in our packaging and our documents are requested
by our clients.
Right now, we start selling to one of Italian pet shop chains called Arcaplanet.
They're really huge.
(33:16):
And they said, hey, guys, there is a new European law that just been put into place and we need
you to...
All of the packages have to be labeled with the type of materials used according to the
ways it can be recycled.
So please implement that in all the packages.
(33:39):
Those are the charts you need to use.
And to know it by ourselves, it will take lots of time, lots of money just to get across
that requirement.
So that's my advice.
So you mean like testing your products within the real customer environment and then get
(34:00):
the feedback and understand if you need to adjust or it is okay to sell?
Yeah.
I think that the best way is to...in development, it's called MVP, minimum value product.
So meeting like 40% of things needed, you just go in there and doing tests through offering
(34:22):
that product to the customer.
And this way, it will be much more efficient, faster and efficient cost-wise for you than
to doing a year of different tweaking, development and research being in Ukraine and researching
the market.
Great.
Great, Maxim.
(34:42):
Thank you for this story.
It was an amazing story.
And I urge our listeners from other countries that are listening to this podcast to have
a look at...especially if you have pets, you have dogs or cats, look to the color products
that are NASA and Warner Brothers certified and approved.
(35:04):
You can find them on the website of Collar.
And I will put the link in the description of this episode.
And by the way, this is not a paid advertisement.
This is just because the product is very great and Ukrainian of high quality and high value
added.
So please visit their website and if you have pets, buy the space technology color from
(35:31):
Collar, from Collar company.
And you will be amazed how good it is done and how great does it look.
Maxim, thank you again for the story and for your experience that you shared with our listeners.
Thanks, Mitro.
I was really glad to be present here and to share experience and some small insights I
(35:54):
have.
And I'm really sure that we will keep growing and be developing at Ukrainian and international
market both.
Great, great.
And I hope that someday we will see your products on Mars or on other planets as well.
Bye-bye.
Hi, I'm Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
from different countries about local business secrets and international expansion experience.
Today my guest is Maksym Pylypenko, the sales department head of Collar.
Collar is a Ukrainian manufacturer of innovative pet products established in 1995.
The company has evolved into a global entity with 500 employees and distributing its products
(00:33):
across 78 countries.
Collar has successfully developed 16 unique brands for pets and opened international offices
in Poland, United States, and China.
This is a brilliant example of a resilient Ukrainian company that survived Russian invasion
and increased its presence on global markets despite all challenges due to the strong vision
(00:55):
and innovations.
And today we will hear their story of international expansion.
Hi Maxim and welcome to the show.
Hello Dmitry, I'm glad to be here and thanks for such a nice introduction.
Can you briefly tell what is your role in the company?
What are you responsible for?
Well, I came to the company 14 years ago and started as a marketing manager for Ukrainian
(01:21):
part of sales.
And back that time the export was really, really small.
We have a couple of clients abroad.
And the company offered me to start working with some expert clients.
Then I switched to being an expert manager and then step by step we developed a separate
(01:42):
department that works with export.
We have a lot of employees in that department.
We have logistics that provides us with the export import procedures and I am in charge
of the sales part of that export.
So I'm in charge of European sales and I have a colleague.
He is in charge of sales to US region and Asian region.
(02:04):
Okay, so quite a big experience you have within the company.
Maybe you can also describe a bit for our listeners what are the products that your
company is producing and who are your clients?
Well, we are the manufacturer of products for pets, for dogs, cats, aquariums.
(02:29):
So it's mostly colors, leashes, dog clothes, dog toys, stuff like that.
Our company managed to be competitive due to the essence of the company is what is innovations.
So we have an R&D department and the vision of the company owner that what we should do
(02:52):
is we should provide products to the market that have a high level of innovative technologies,
innovative thinking to those.
So we either using some new technologies to the old products or new materials or trying
to develop new products to be able to stand out from our competitors, especially abroad.
(03:15):
Can you tell what was the reason why the company seeing the big potential in Ukraine decided
to go to the global scale?
It was several factors due to that.
One of them was the difference in the currency value.
So getting revenue in foreign currency is always like a warranty policy for a company
(03:39):
in times that are rough.
So this is one of the reasons.
And the other reason that while visiting like first international exhibition company owner
and some top personal of the company who visited it saw the size of the market and the perspective
(04:00):
that it can give to the company because in Ukraine, we already at that time had a pretty
good part of the market.
We were well known.
We have several like brands, for example, our cat litter called Supercat.
It's well known and it's already have a good share of the market.
And on the market where you present in a big share for a long time, it's harder to grow
(04:26):
fast.
So we can grow a couple of percents each year and that's okay for the steady market.
But in the international market where we come in as a new player, we can grow 10%, 100%
a year because we get in a new share of the market.
So I guess those two reasons were that we decided to go international and the innovation
(04:52):
as a tool going international was developed during like first three, four years doing
that.
And if we were talking about this time, so this is like 15 years ago and the expert activities
among Ukrainian companies at that time, especially for a small business was not so highly developed.
(05:15):
Did you have any strong challenges and how did you get this understanding?
How to go abroad?
What steps to take and what you have begun with in this journey?
Well, to be honest, back that time, we didn't have like a map of steps that we followed.
We didn't have the idea that those are the steps that 14 years we are going to do.
(05:40):
And we were developing by taking chances and checking what works best.
And like one of the major changes we made and that I can mention as a really successful
step, first our export, all of our export were done directly from Ukraine to our customer.
(06:01):
And that's the way we are doing now, for example, for Asian regions, for like US sometimes.
And that successful step was back that time, the problem was that you not only have to
find a customer, work with him on the price and explain him the value of your products
(06:23):
and the competitiveness of your products.
You also have to make him sure that the company is trustworthy.
And back that time, Ukraine was not well known and all of those points were hard.
And then you will have to explain to him that, hey, guys, you have to do direct import from
(06:43):
Ukraine.
And Ukraine was not the popular country to buy products from.
They didn't know any procedures.
Most of our customers said, yeah, we can do that from China.
We know everything how to do that.
And we do not know how to do that from Ukraine.
And that was a big barrier on the path to export.
(07:03):
And one of our successful steps was to open our own companies as we have now in Europe
and US.
So speaking about Europe, first, we opened a company, the same owner as we have here,
opened a bank account, hired Polish accountants.
(07:26):
And this way, we had a huge opportunity when we're looking for a customer.
And when he places order, we can say to him that everything is manufactured in Ukraine,
but all the economic relations and the documentary relations will be done inside the European
Union.
So there are no differences for you with any your current procedures.
(07:53):
And that was a huge, huge advantage that we get.
And now we already have also and back that time, we also hired outsource warehouse where
we brought products.
That was not our warehouse and there were no our employees there.
It was like a hub.
We were getting like 10, 20 orders from the clients, putting them in one car, bringing
(08:17):
to that warehouse and loading and giving them directions where to send those products using
European carriers.
We still do that for our clients.
But since the beginning of the war, we also opened our own warehouse, rented it, we hired
our own Polish employees.
So we and brought the stock of products there.
(08:40):
So that's the next our advantage that we can supply products faster using the stock we
have there.
So do I understand correct that your clients that you were serving through your European
Department and warehouse were the B2B customers, your partners that were selling that goods
to the direct direct to the B2C customers afterwards?
(09:01):
Yeah, all our customers are B2B clients.
So it's either pet shop.
That's the smallest of our customers is a pet shop.
He buys like our our minimum order is 500 euros and pet shop order rate through our
B2B portal online.
He can pick the products, order them and speak to our manager.
(09:23):
We will deliver them.
Then we also do have customers like pet shop chains.
For example, in Britain, we are supplying pets corner pet shop chain, they have 140
huge pet stores across the Britain.
And we deliver in them to their main warehouse in a like in a one truckload and they distributing
(09:47):
to their own pet shops.
And one other way we also supply our customers is like we have a wholesale partner, some
kind of a distributor who works with his region and we supply him a truckload of our products
that he chooses.
And then he distribute them to his own clients, which are also pet shops.
(10:12):
So that's the other way we also work.
Clear, clear.
You are now exporting to 78 countries.
How did you choose?
How did you made the selection of the countries?
And what was the approach?
First of all, let's make clear 78 countries is the number of countries we ever exported.
(10:33):
Some of them were like one time expert because sometimes our products doesn't fit the market.
Sometimes the customer just looking for something and trying lots, lots of different products
and manufacturers.
Right now we have about 20, 30 countries that we do supply regularly.
Still quite a big number.
(10:53):
Yeah, quite a big number and like the most powerful of the regions are surely European
region, US sales, also Asian sales.
We have a really huge customer in Japan, even though the country is small, but the market
there is big.
Just before our recording, I made an episode with two parts with Japanese expert and we
(11:19):
exactly discussed that they love pets and they just adore their dogs and cats.
So this is quite a good market.
So for those listeners that would like to understand more the Japanese market, look
for the episode about Japan and maybe you will find the color production on the shelves
(11:39):
of Japanese supermarkets and pet stores as well.
Yeah, that might happen.
One of our most popular products, Puller, that's a purple ring for dog training.
That's one of the products our partner in Japan sells a lot.
And as you mentioned, Japan is really interesting market due to the culture.
(12:01):
They have a culture of caring for pets and high level of care for pets.
But our success on that market was through our partner because he is a wholesaler.
We do not deal with separate pet shops because to do that you have to have a deep understanding
(12:21):
of the culture of the market, of the language, and all of that is provided by our partner.
We communicate with him, we do wholesales and he distribute that to pet shops and provides
marketing activities through those.
Coming back to the country choice, how did you choose, what was the approach of choosing
(12:42):
the countries?
There were two main ways that we used while approaching.
First one was thought out approach.
It's when, hey, let's think where we should go.
And obvious choice was Europe because Europe, lots of countries, different countries, but
(13:03):
united by one currency, by one laws of import-export and being really close across the border going
to Poland.
So that was like first and obvious choice and we opened their company and that was really,
really powerful thing to do.
The second country done the same way was US.
(13:25):
And even though lots of difficulties due to the distance and delivery, due to the different
laws much more different than ours or European, but the size of the market is so big that
it worth it.
So mostly those two directions were chosen by us and pushed by us right now.
(13:52):
Did you narrow down in Europe because Europe is also quite a bunch of countries with different
mentality and I don't know, the number of pet owners, et cetera?
To be honest, we did not.
We always thought about that and tried that, but we really did not because the size of
(14:14):
the market is huge and we work on the principle of the bottleneck.
So we looking at the factor that stops us the most and try to overcome that.
And at that time, and that was the factor of delivery, export-import procedures and
getting those boundaries of the customer.
(14:36):
When we did that, and that's probably the point I would like to mention later on in
our communication, but one of our main ways to get new customers is exhibitions, international
pet exhibitions.
And there are customers from all the countries.
So we just went with working on those exhibitions, displaying our products and all the rest of
(15:02):
the concentrations were worked out by itself.
Lots of customers are coming and some countries like our products more.
Some markets with, for example, Scandinavian market, the price expectations there are really,
really nice for exporters from Ukraine because they can pay high price for their top quality
(15:27):
products.
And it happened so that by itself, we have a nice presence in Scandinavian market, but
we never like aim there intentionally.
So this is the second way that works for us.
The same way works for Asian region.
We do have a department that works for Asia and they just try to reach all countries,
(15:50):
all customers, visiting exhibitions, connecting to them through emails, through like international
online resources.
But then it's like the invisible hand of the market that works for us narrowing down the
countries we are present at.
(16:11):
So in fact, you used exhibition trade shows to narrow down the country choice.
Yeah.
So that was the filter for your focus markets.
I will say that the trade shows are the funnel that taking the clients to us and then our
competitiveness and characteristics of our products are the mesh that divides and narrows
(16:39):
down customers for us.
For example, we have less presence in countries like Romania, Bulgaria, because their price
expectations are different.
They will eagerly buy products from company Trixie, which brings everything from China
and sells less quality, but much less in price.
(17:03):
And our products are innovative, are high quality, and we never try to associate ourselves
with like the cheapest product because that's first of all, that's not our approach.
Second of all, that it would be really hard to compete with China this way.
(17:26):
And using those, it's by itself narrowed down the number of countries that are eager to
work with us.
But still there are lots, lots of possibilities and lots of room to expand even at those countries.
Okay.
How did you find apart from the trade show?
When you realized that, for example, Sweden is the potential market for you, how did you
(17:52):
find these partners, distributors, pet shops?
What were the channels and the approach for doing that?
Well, as I said, trade shows are the most successful channel for us.
The other channel is industry meetings.
We've been visiting for, I guess, 13 years already industry meeting called Global Pet
(18:18):
Forum, which is a conference organized by oldest European magazine, pet product magazine,
called Pets International.
And the third one I will say is online presence and European printed magazines.
And also there is an advice I would like to give if somebody will try to do the same.
(18:42):
Keep in mind that first about three pet shows, three years, you will be getting less customers
because in Europe they are looking if you're trustworthy, if you come into several shows
in a row, and then if they see you, if they recognize you, if they know you, they will
do business with you.
(19:03):
So from the first show we got about 100 business cards, but we get only about one order, one
partner.
And we spend much more money and time into the show than we get back.
But the next year it was better, the year after that it was better.
And that's the thing you should expect.
(19:25):
So this is kind of a long-term investment into growing global, yeah?
Right.
Long-term investment and you should have an amount of investments to do that.
You should be profitable in your current business, get some money saved to start export because
you will have lots of things to adjust like packing, like your documents being connected
(19:51):
to the laws of the countries you export into, different documents that allows you to export.
And all of that takes time, all of that takes money to pay for the specialists.
So that's the thing you should be expecting for three years and a couple hundred of thousand
dollars to spend that.
(20:12):
That's a really interesting notice that you made because in most cases what I hear now
is the expectation of potential exporters is to have quick money from export.
Yeah, like we are now losing the Ukrainian market, we don't have the ability to earn
here.
So the cure for that might be the export and we are expecting quick money from that.
(20:35):
But reasonably it is not so quick, yeah?
So you need to have patience, you need to have investments that you will put in that
to have the result afterwards that will pay back this activity.
Yeah, sure.
It can be a quick money, but that will not be a steady flow.
You can go to the exhibition, especially if you're not used to B2B export or you're not
(21:02):
that big in Ukraine, you are going to international exhibition, you're exhibiting there, you're
getting one client and you have an order of hundred thousand euros.
That's a nice money, that's a nice order.
And if you're selling in Ukraine about like 20,000 euro a month, that's like a jackpot
for you.
(21:23):
But you will not be able to copy that result going to the next exhibition, next exhibition.
It's like a lottery and a chance.
Okay, so you have chosen the regions or directions where to play and then you've got this organic
filtering through the exhibitions about the markets, the potential markets.
(21:44):
And then I suppose that your way was to invest in PR, in brand awareness through these magazines
and online presence.
Can you tell a bit more about that?
Yeah, that's an interesting thing because in general, it would be the same exact thing
I've just told about export.
It takes time.
(22:05):
We started by going to the exhibition and there those magazines are coming by themselves
because they're also looking for the clients.
And we set up an advertisement plan for like a year ahead and to be honest for us, those
prices were pretty high.
(22:26):
We do one time under advertisement and then next month they say, hey, let's do that again.
And we're saying, no, we don't have that much of a budget.
We will go with other magazines this time.
And they offer us something.
Most of the time they say, hey, let's do one more advertisement and then I will get you
two news blogs next month and the one next month free.
(22:49):
Okay, we say, okay, let's go with that.
And slowly we established firstly those relationships.
And a couple of years ago, I guess four or five years ago, a company established a separate
PR department.
And what they've done is a really, really great thing.
They established relationships with most of those media when we advertising for free.
(23:16):
How did they do that?
Because those media are desperately looking for information.
Their resource is an information.
So right now our PR department have like, I guess, more than 10 huge media over the
world in US, in Britain, in Europe.
Our PR department sending them newsletters, for example, hey, guys, we are going to that
(23:40):
exhibition.
We will have that new product there.
Or our R&D department announced that we are partnering with NASA.
And I have to say that paid advertisements work worse because when it's a news article,
when it's some overview of the market mentioning our new products and our presence at the exhibition,
(24:05):
it gains much more trust from a customer than just a paid advertisement that says, hey,
our products are great.
Please buy them.
That's the content.
Can you tell a bit more about the NASA case?
I know that you have this partnership with NASA and I think that you are the only one
Ukrainian product that is sold on NASA website.
(24:27):
Can you tell this story?
How did you come to NASA and how did you agree about that?
That's an interesting story because personally, I am as a sales department found out about
that when it's already been done, when we have that partnership.
It was due to one of our guys from R&D department.
He somehow visited NASA page and he saw those symbols NASA using and seen information that
(24:56):
NASA can provide you with the right to use those symbols.
At the time, we were aiming at the US market, looking for the ways to expand our presence.
In the US, everybody loves NASA, NASA symbols, all that space program stuff.
(25:16):
He contacted NASA through the contacts provided at their official webpage.
He started communicating with them and asked, hey, guys, I know you have some kind of program
where you give out those rights for free.
It's a free way to get rights to use their symbols and logos.
(25:40):
They said, yeah, but there are some rules that you have to meet.
First and foremost, they have to check if the quality of the products are okay, if the
company is okay.
I believe our R&D sent all the information about the company, links to our web pages,
(26:01):
some samples of the products.
The representative at NASA said, yeah, okay, we like the products, we like what we see
about the company.
There is a letter that we agree for you to use our symbols.
We started doing that.
Then they came to us by themselves and said, hey, that's a webpage that sells different
(26:27):
products with NASA symbols.
In the US, we also have a huge culture caring for pets.
We see that your products are awesome.
Can we get them into our range?
We surely said, yeah, that's interesting for us also as a promotion, as being present at
your webpage.
That's the way we partnered with NASA.
Great, great story.
(26:49):
Do you agree with NASA that if they will send some dogs or cats to the space, they will
wear your collars?
Not really, but we have some products connected to that.
For example, one of our collars and leashes called Evolutor being the strongest collars
and leashes on the market.
(27:10):
Our R&D department using the same space alloy that NASA and Boeing using in building spaceship
and aircraft.
Those aluminum alloys that are high density and that are really, really strong, but at
the same time light, they are used in buckles and hooks in those.
We have a direct connection with the spaceships and aircrafts also.
(27:34):
Amazing, amazing.
You have space technology in the productions for dogs and cats.
That's crazy.
I know that you also got the license of DC Comics.
You have the pictures of super heroes on your products as well.
(27:54):
That influenced your sales and the brand awareness in the global scale.
Yeah, I will say that it did.
That's much more complicated, much harder than we have with NASA.
And I can tell you that there are lots of rules and technical issues you have to do
using those logos.
(28:15):
Okay.
So your products are approved by NASA and they are also approved by Warner Brothers.
Coming back to your roadmap and your journey, your global journey, what were the biggest
challenges that you experienced and maybe still experience and how did you overcome
them?
(28:35):
Well, thinking about that back the times, nothing of it seems hard now.
It seems like, yeah, that's the things we've done and the things we had to do.
But right now I will say that obstacles caused by Russian invasion and by war are the most
(29:00):
complicated for now.
But I really, really believe and hope that we already overcame the most complicated.
For example, when Chernihiv was surrounded and we went to Ivano-Frankivsk and rented
their warehouse and took all of our products from Chernihiv there.
(29:23):
And we restarted expert eventually from Ivano-Frankivsk.
And then eventually when Chernihiv was freed by Ukrainian forces, we came back.
How did the war influence the attitude of your partners abroad?
Were they helping you or did you lose any contracts because of that?
(29:47):
It was both.
It was both.
And at the very beginning, we had really, really huge support.
There were people from our current customers that say, hey guys, we cannot imagine what
you're going through.
We would like to support you.
(30:08):
Let us do the prepayment.
They usually were buying with like 30 days delay.
And that was a huge support.
We had people just sending money to our account, not for orders, but to support us.
Through that type of support, our company managed to communicate and to establish relations
(30:33):
with the Japanese foundation that helps to rebuild Chernihiv.
And this foundation was found by our Japanese distributor.
So this is the way our business relationships and support of our partners helped us not
only in business, but helped us to support our city and our country.
(30:55):
And also there is a drawback there, other opposite way.
We lost some clients.
And even during the war, we are coming to international exhibitions and showing that
our company still works, that we are supplying, and that helps to change the opinion and get
back the trust of the customers.
(31:18):
From the point of view of your journey that you have now already, more than 15 years of
going global, what kind of an advice would you give to Ukrainian exporters that are just
starting this journey by themselves?
What kind of do's and don'ts?
What you should do and what you should definitely not do.
(31:41):
Well, I think that what you definitely should do, you should try to be prepared for the
next steps, try to make a roadmap.
You should be ready to invest.
But I also advise not to overthink, because sometimes it's a really tempting way to do.
(32:08):
I will be getting ready for years.
I will be looking through our packages.
I will be tweaking all the products to the way I think it will fit the European customer.
Well, to be honest, if you're not living in Europe, if you're not hiring European marketing
managers, you will never know exactly what the customer in Europe knows.
(32:32):
You might be close to that, but you will never know exactly.
So in my point of view, it's much better to get ready at some level to adjust your packaging
to the languages needed, to adjust your packaging to the basic law requirements needed, and
then to introduce your products into the market at one, two pet shows and to see how the market
(32:55):
reacts.
And most of the implementations we have in our packaging and our documents are requested
by our clients.
Right now, we start selling to one of Italian pet shop chains called Arcaplanet.
They're really huge.
(33:16):
And they said, hey, guys, there is a new European law that just been put into place and we need
you to...
All of the packages have to be labeled with the type of materials used according to the
ways it can be recycled.
So please implement that in all the packages.
(33:39):
Those are the charts you need to use.
And to know it by ourselves, it will take lots of time, lots of money just to get across
that requirement.
So that's my advice.
So you mean like testing your products within the real customer environment and then get
(34:00):
the feedback and understand if you need to adjust or it is okay to sell?
Yeah.
I think that the best way is to...in development, it's called MVP, minimum value product.
So meeting like 40% of things needed, you just go in there and doing tests through offering
(34:22):
that product to the customer.
And this way, it will be much more efficient, faster and efficient cost-wise for you than
to doing a year of different tweaking, development and research being in Ukraine and researching
the market.
Great.
Great, Maxim.
(34:42):
Thank you for this story.
It was an amazing story.
And I urge our listeners from other countries that are listening to this podcast to have
a look at...especially if you have pets, you have dogs or cats, look to the color products
that are NASA and Warner Brothers certified and approved.
(35:04):
You can find them on the website of Collar.
And I will put the link in the description of this episode.
And by the way, this is not a paid advertisement.
This is just because the product is very great and Ukrainian of high quality and high value
added.
So please visit their website and if you have pets, buy the space technology color from
(35:31):
Collar, from Collar company.
And you will be amazed how good it is done and how great does it look.
Maxim, thank you again for the story and for your experience that you shared with our listeners.
Thanks, Mitro.
I was really glad to be present here and to share experience and some small insights I
(35:54):
have.
And I'm really sure that we will keep growing and be developing at Ukrainian and international
market both.
Great, great.
And I hope that someday we will see your products on Mars or on other planets as well.
Bye-bye.
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