​Gazprom-Media invests in D2C project
14 June 2019

Gazprom-Media Holding, a leading diversified media holding in Russia and Eastern Europe, continues to invest in projects that are not related to its main business. As such, the Holding has announced a deal with the manufacturer of children's goods Nappy Club. This company produces and sells products under its own brand and operates on the D2C (direct to consumer) sales model with a focus on the Russian and EU markets. Gazprom-Media Holding received a minority stake in the company as part of the deal.

Nappy Club plans to funnel investment into expanding its product lineup and making a full-fledged launch on one of the EU markets. The company’s goal on the Russian market is to reach a turnover of 5 billion rubles by 2023 and cover 4% of the country’s online sales for children's goods.

The market for children's goods totalled 1.4 trillion rubles in the first half of last year and continues to grow, according to Nielsen. E-commerce in the segment is developing at a fast rate - its growth in the first half of last year added up to 40% in terms of goods sold and 37% in terms of money earned. The same indicators for offline retail are only 8% and 6%, respectively. The share of online sales in the segment increased by a third in the first half of the year - from 3% to 4% in monetary terms, and continues to exhibit positive growth. This highlights the investment opportunities of a company whose business is focused on online sales of children's goods.

Changes in consumer preferences, the desire to save time and money when shopping for everyday goods, increased attention to private labels, online shopping, including shopping through a subscription, make the D2C model particularly relevant today. This model offers deliveries of goods from the factory directly to the buyer without intermediaries, simplifies logistics and minimizes storage and, as a result, leads to a high business margin.