Made in Ukraine

Many rea­sons for made-in-Ukraine craze in a na­tion that fights war, seeks greater eco­nomic self-reliance

Kyiv Post - - Front Page - BY OLENA GONCHAROVA AND ANNA YAKUTENKO GONCHAROVA@KYIVPOST.COM, YAKUTENKO@KYIVPOST.COM

As the tra­di­tional Ukrainian em­broi­dered shirt or vyshy­vanka con­quers cat­walks and red car­pets around the globe, Ukrainian-made goods are see­ing a resur­gence at home as well as abroad in other ar­eas.

After Ukraine’s na­tional cur­rency, the hryv­nia, lost more than twothirds of its value fol­low­ing the start of Rus­sia’s war in Crimea and the Don­bas in 2014, some im­ported goods be­came pro­hib­i­tively ex­pen­sive for many Ukraini­ans.

So they started to look­ing to pro­duce and buy home-grown sub­sti­tutes.

Ex­perts say lo­cal man­u­fac­tur­ers also got a boost from the surge of pa­tri­o­tism among the pub­lic fol­low­ing the EuroMaidan Rev­o­lu­tion that

drove Pres­i­dent Vik­tor Yanukovych to Rus­sia on Feb. 22, 2014.

But more than three years later, in­ter­est in lo­cal pro­duc­ers con­tin­ues to grow, sug­gest­ing other fac­tors are at work.

Where it all started

In 2013, jour­nal­ist Yuliya Savostina started a blog en­ti­tled “In search of made in Ukraine’” at the Delo. ua news web­site. Savostina de­cided to go a whole year us­ing only Ukraine-made goods and doc­u­ment her ex­pe­ri­ence.

Savostina writes that, at the be­gin­ning of the ex­per­i­ment, many peo­ple were hes­i­tant about buy­ing Ukrainian goods, but the project soon gained “thou­sands of fol­low­ers who wanted to be proud of their coun­try.”

Savostina ended her ex­per­i­ment in 2014, with 100,000 sub­scribers to her blog and more than 4,000 pro­duc­ers dis­cov­ered and tested. But it was only the start of the “made in Ukraine” trend, as the EuroMaidan Rev­o­lu­tion took it to a new and higher level.

Rus­sia’s in­va­sion of Crimea and part of the Don­bas sparked a boy­cott of Rus­sian goods, and that, along with the fall in the hryv­nia, made do­mes­tic prod­ucts more at­trac­tive. But lo­cal pro­duc­ers, most of whom had no ad­ver­tis­ing bud­get, strug­gled to fill the gap.

Savostina was of help again, or­ga­niz­ing a fes­ti­val in June 2014 that sold only Ukrainian-made goods. Oth­ers fol­lowed.

The fes­ti­vals have not only been help­ing small do­mes­tic pro­duc­ers of clothes, gro­ceries and home sup­plies make de­cent rev­enues in just a cou­ple of days, they’ve also been help­ing them reach more cus­tomers.

While Savostina’s first Made In Ukraine fes­ti­val at­tracted some 8,000 visi­tors, her third one at­tracted 35,000 at­ten­dees. By 2017, she had or­ga­nized 10 fes­ti­vals in Kyiv.

The de­mand for Ukrainian goods has in­spired oth­ers to launch sim­i­lar reg­u­lar fairs all around the coun­try. One of the most suc­cess­ful is Vsi Svoi, a reg­u­lar fair that has at­tracted around 600,000 visi­tors to 45 events in Kyiv and sev­eral other big cities since 2015.

Sim­i­lar fairs have also popped up in Dnipro (Bud v UA) and in Lviv (OneDayShop and Harmy­der).

Go­ing Ukrainian

Ukrainian goods have also ben­e­fited from a change in con­sumer sen­ti­ment. For many years, Ukrainian con­sumers were blink­ered by the post-Soviet view that for­eign-made goods are more pres­ti­gious and higher qual­ity than any­thing pro­duced do­mes­ti­cally.

Iryna Ly­tovchenko, a co-founder of Table­tochki, an in­ter­na­tional char­ity foun­da­tion for chil­dren with can­cer, says she used to buy clothes abroad, pre­fer­ring in­de­pen­dent stores or the mass mar­ket brands un­avail­able in Ukraine. But since 2014, she has switched to Ukrainian de­sign­ers.

“When the (Made in Ukraine) fair craze started and new brands popped up of­fer­ing stylish and com­fort­able gar­ments, I saw no need to shop abroad,” Ly­tovchenko says, adding she still likes all of the brands she has dis­cov­ered over the years, in­clud­ing UA­maz­ing, Vovk, Ka­chorovska ate­lier, 7ar­rowswear, Bal­cony gar­ment and Sammy Icon.

“Buy­ing Ukrainian also helps to de­velop lo­cal man­u­fac­tur­ing,” Ly­tovchenko says. “The only prod­ucts I couldn’t find sub­sti­tutes for among Ukrainian mer­chants are Boyfriend jeans and New Bal­ance sneak­ers.”

Next step

While the fairs have helped small do­mes­tic brands de­velop, there is ev­i­dence that they are now ready to take the next step and go into reg­u­lar re­tail.

In Septem­ber, the Vsi Svoi fair’s or­ga­niz­ers opened a shop by the same name on Kyiv’s cen­tral Khreshchatyk Street.

The store’s three floors stock around 150 Ukrainian brands of clothes, ac­ces­sories, bags, lingerie, footwear and home decor from Kyiv, Odesa, Dnipro, Kharkiv, Lviv, Rivne, Kh­mel­nyt­sky and oth­ers.

“We are very de­mand­ing to our brands, and so are the cus­tomers,” its owner, Anna Lukovk­ina, says. “If a but­ton falls off or they see any sewing mis­takes, the whole of Face­book will know about it.”

Lukovk­ina re­calls an es­pe­cially suc­cess­ful fair in fall that fo­cused on sea­sonal clothes, mostly coats, which saw some 50,000 visi­tors.

“I got in there and re­al­ized that I just couldn’t move at all, it was too busy,” Lukovk­ina says, adding that she’s not a fan of shop­ping, and wants to make it more con­ve­nient. With Ukrainian-made clothes in de­mand abroad, Vsi Svoi also plans to launch an on­line store with world­wide ship­ping.

Dur­ing the first year of the Vsi Svoi fes­ti­val, at least 20,000 dresses, 12,000 pairs of shoes and 7,000 bags were sold, ac­cord­ing to the or­ga­niz­ers.

Lukovk­ina is cer­tain this trend will con­tinue. “Now it’s up to the brands (to in­crease pro­duc­tion and im­prove qual­ity). The strong­est will re­main afloat. And my dream is that buy­ing Ukrainian won’t be a trend, but rather a habit.”

As sum­mer ap­proaches, Vsi Svoi visi­tors are now rak­ing through racks of light trench coats, t-shirts and dresses. Prices start at Hr 250 ($10) for a t-shirt, Hr 600–2,000 ($22–75) for dresses, and from Hr 4,000– 8,000 ($150–300) for warm coats.

But even though the venue re­mains pop­u­lar among Kyi­vans and tourists, it’s not Lukovk­ina’s “dream store” yet. She says the ap­parel they sell is rather eclec­tic and the store lacks a uni­fied de­sign. To­gether with her 100 em­ploy­ees, she plans to im­prove the win­dow dis­plays, bet­ter or­ga­nize the brands by floors, and put lit­tle signs near ev­ery pro­ducer so cus­tomers can find out more about the brands.

Tar­get for­eign mar­kets

For for­eign cus­tomers, the main ap­peal of Ukrainian goods are their low prices.

“For­eign­ers of­ten buy shoes and leather ac­ces­sories,” Lukovk­ina says. “We had some Hr 8,000 ($297) leather bags and they were a big hit among the for­eign­ers.”

Ka­chorovska, a Ukrainian leather shoe brand, also started sell­ing their footwear via web­sites, so­cial me­dia and mar­kets in the United States, Ja­pan and the United Arab Emi­rates.

Man­u­fac­tured in Zhy­to­myr, 140 kilo­me­ters west of Kyiv, the brand of­fers af­ford­able prices even though it im­ports the heels and leather for all of its shoes from Italy.

Mean­while, the Ukraine-based Sammy Icon sock com­pany is also do­ing well on the for­eign mar­kets. In 2012, the com­pany launched a cam­paign on the U.S.-based crowd­fund­ing plat­form Kick­starter and raised $8,981 in less than a month to pro­duce their first col­or­ful socks.

The busi­ness soon took off, and Sammy Icon is now on the front foot: its socks are avail­able in around a dozen shops in Kyiv, as well as in nu­mer­ous stores in Ukraine, Switzer­land, Ger­many, Italy, Fin­land, the United States and South Korea. They have also in­stalled the coun­try’s first sock vend­ing ma­chine – in Kyiv’s cen­tral Globus shop­ping mall.

Ukrainian pa­jama brand Sleeper is also pop­u­lar among for­eign cus­tomers, sell­ing in the United King­dom, Ja­pan, Korea, the United States, Ger­many, Rus­sia and Kaza­khstan. Founded in 2014 by for­mer fash­ion jour­nal­ists Kate Zubarieva and Asya Varetsa, the brand has been fea­tured in lead­ing fash­ion mag­a­zines such as Vogue Italia and Van­ity Fair.

In 2016, Ukraine ex­ported con­sumer goods worth a to­tal of $665.8 mil­lion to 92 coun­tries. The Euro­pean Union, Rus­sia and Be­larus are the top buy­ers, while Ukraine also ex­ports its cloth­ing and footwear to Moldova, Ge­or­gia, Nor­way and Canada.

The bulk of Ukraine’s es­ti­mated $36.4 bil­lion in ex­ports in 2016 came from steel, in­dus­trial and agri­cul­tural com­modi­ties.

What’s next?

How­ever, pa­tri­o­tism prob­a­bly won’t be enough for Ukrainian brands to keep their clients, ex­perts say.

Savostina said that only the brands with a long-term busi­ness plan, which are con­stantly im­prov­ing qual­ity, ser­vices and mar­ket­ing while keep­ing their prices com­pet­i­tive will evolve from star­tups into mass pro­duc­ers.

She said that the big­gest flaw of Ukrainian pro­duc­ers is their “ob­ses­sion with short-term sales at the ex­pense of strate­gic plan­ning.”

An­other prob­lem is that pro­duc­ers still try to save money on pro­fes­sional man­agers, mar­ket­ing spe­cial­ists, and pho­tog­ra­phers – a phe­nom­e­non that Savostina de­scribes as “poor busi­ness cul­ture.”

More­over, Savostina said that it’s both dif­fi­cult and ex­pen­sive for busi­nesses to se­cure loans to ex­pand pro­duc­tion, even when there is de­mand for their goods. In ad­di­tion, many pro­duc­ers are ig­no­rant about le­gal and fi­nan­cial is­sues.

Savostina ex­pects only 10–15 cloth­ing brands out of the 200–300 founded at the peak of the boom in pop­u­lar­ity of do­mes­tic pro­duc­ers to stay on the mar­ket and gain na­tional recog­ni­tion.

“Mar­ket com­pe­ti­tion will put ev­ery­thing in the right place,” she writes in her blog.

De­spite war and eco­nomic volatil­ity, Ukraine is still a na­tion that ex­ports many prod­ucts to the world, in­clud­ing corn, iron ore, con­sumer goods, rocket en­gines and weapons. In 2016, Ukraine im­proved its im­age and brand value glob­ally. The EuroMaidan Rev­o­lu­tion that top­pled ex-Pres­i­dent Vik­tor Yanukovych also helped to pull Ukraine out of Rus­sia’s or­bit and, cou­pled with a two-thirds drop in the cur­rency, in­spire lo­cal pro­duc­ers to boost do­mes­tic man­u­fac­tur­ing. The num­ber 482 is the coun­try bar­code sig­ni­fy­ing Ukrainian-pro­duced items. (Kyiv Post/tOrange.biz)

A wo­man works at Ukrainian knitwear pro­ducer RITO fa­cil­i­ties in Kyiv Oblast. The com­pany has been in the cloth­ing busi­ness in Ukraine for 24 years. They ex­port to Lithua­nia, Kaza­khstan, Den­mark and Canada. (Kostyan­tyn Ch­er­nichkin)

Ukraine’s $36.4 bil­lion in ex­ports in 2016 were dom­i­nated by steel and grain. But cloth­ing and tex­tiles ranked 10th at about $700 mil­lion.

Women look at Ukrainian-made bags dur­ing Vsi Svoi fes­ti­val in Kyiv’s D12 Gallery on March 11. (Kostyan­tyn Ch­er­nichkin)

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