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M.Video-Eldorado is the largest Russian chain of home appliance and electronics stores, bringing together two retail brands. The company sells through its stores, its own website and its app. Its shares trade on the Moscow Exchange under the ticker MVID.
Appliance and electronics retail works differently from grocery retail: the ticket is large, the purchase is infrequent and carefully considered, and the markup is thinner than it looks — the shopper compares the price online while standing in the store.
Hence the main challenge of recent years: marketplaces. They offer the same appliances and electronics without the cost of a sales floor and sales consultants, and a retail chain cannot hold on to the customer on price. The company's answer is what a marketplace does not provide: the chance to see the product in person, advice, fast delivery and installation, service and warranty.
The financial peculiarity is working capital. The goods are bought in advance and sit in warehouses and on sales floors; when interest rates are high, financing this inventory becomes expensive in its own right.
The sales floors of the two brands, where shoppers can see the products and get advice.
The company's own website and app, including in-store pickup.
Delivery, installation, extended warranty, trade-in of old appliances.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company sells home appliances and electronics through a chain of stores under two brands, its own website and its app, and also provides delivery, installation and after-sales service.
They offer the same product without the expense of sales floors and sales consultants, so a retail chain cannot compete with them on price. It has to rely on what a marketplace lacks: showing the product in person, advice, installation and service.
Because the goods are bought in advance and sit for a long time on sales floors and in warehouses. This inventory is financed with debt, and when interest rates are high, carrying it becomes a noticeable expense item.