Serhii Symonov, CEO of Nova Post in Germany, shared what perspectives the company foresees in the German market, what competitive advantages it intends to use to win the favor of private and business clients, and what scaling plans it has for the coming year.
Why did Nova Post enter the German market? Why is it interesting and what opportunities do you see for yourself here?
The company entered the German market in June 2023. Since the outbreak of full-scale conflict in Ukraine, many Ukrainians have fled their homes and taken temporary refuge in Europe. They retain strong ties to their homeland and need to send and receive parcels to and from Ukraine on a regular basis.
So, we followed our customers to Europe. At the same time, it was an opportunity for us to introduce our services and our advantages to the locals. Therefore, we are opening branches in Germany that Ukrainians are used to, as well as developing formats that are more familiar to local consumers – automatic parcel lockers, PUDO, courier delivery.
One of our goals is to open Ukraine to German businesses as a new large market with 30 million active consumers. For example, the volume of orders placed by Ukrainians through our company in international online stores increased by 55% in 2023.
Overall, Germany is one of the most powerful European economies. The freight and logistics market here is estimated at €190 billion, and the domestic courier and express delivery market is worth €12 billion. Of course, the industry is saturated with players, represented by both large international corporations and local companies. At the same time, we are convinced that our company has plenty to offer local consumers.
What makes Nova Post fundamentally different from local logistics operators, what new can you bring to our delivery market?
One of Nova Post’s key advantages is speed in everything: delivery, communication, responding to claims, etc. In Ukraine, we deliver within 24 hours between the most distant cities, which are 1300 km apart. Nova Post already delivers from branch to branch within Germany the next day. In addition, our branches offer parcel pickup and drop-off every day except Sunday and extended working hours until 20:00.
Our second strength is our digital services, which make delivery fast, convenient and reliable for our customers. These include our mobile app, where all the company’s services are available, an online account for business clients, a courier mobile app, etc. Consumers especially appreciate tracking, which is the ability to monitor the parcel’s location in real time. We update the data on the parcel’s movement every 3 minutes, while local operators update it only once a day.
We pay great attention to the development of technology and innovation. We have our own R&D center and an IT company that creates products and services for Nova Post customers. These departments are constantly improving our digital and offline services, testing and implementing innovations so that we can keep up with time and even stay ahead of it.
The third component is our customer focus in everything we do. We evaluate every smallest step and innovation from the point of view of customer convenience. We know how important it is for a customer to be confident in the reliability of delivery and that the parcel will arrive safe and sound. That’s why we pay full compensation for the value of the parcel in case something happens to it, and we always take the client’s side in all disputes.
You have opened 13 branches in six months, will you continue to expand your network, and if so, where exactly? How do you decide which city to enter?
As of the end of January, we already had 15 branches. They operate in cities such as Berlin (2 branches), Hamburg, Munich, Dresden, Frankfurt am Main, Cologne, Düsseldorf, Dortmund, Bremen, Büttelborn, Magdeburg, Hanover, Leipzig and Mannheim.
The plan is to open another 30 branches by the end of the year.
In addition to 15 Nova Post owned branches, our customers can also use 7,700 service points of our partners across the country. These are pick up points, where you can receive parcels weighing up to 10 kg.
We are interested in all major cities and are currently searching for the most suitable premises and locations. Openings are taking place as we find them.
The delivery to a branch is not very common in our country. Why do you think your services will be in demand? Do you plan to develop other formats?
As I have already mentioned, when we entered Germany, we focused primarily on Ukrainians. And for them, delivery to the branch is the most familiar format: about 90% of customers in Ukraine are used to receiving parcels in this way. In addition, our branches in Europe also serve as meeting points for the Ukrainian community: here people can communicate, hear their native language, and meet fellow countrymen.
In Germany, customers are more likely to use courier delivery, parcel lockers or pick up points. Therefore, we are not limited to branches. Now our customers, as I noted, can also use 7,700 service points of our partners across the country.
In addition, together with our partners, we are developing door-to-door delivery. In large cities, we provide this service on our own, and throughout the country we work with partners. Customers can call a courier to pick up a parcel or cargo at any address, or order a courier delivery to their home or office. The address delivery service is available throughout Germany.
The next step is to develop our own courier delivery and delivery to parcel lockers across the country.
Your parent company in Ukraine gets a lot of its customers from the e-commerce segment. Do you also plan to offer your services to businesses in Germany as a delivery partner? What are you already doing in this direction, and do you already have potential business customers? What are the obstacles on this path?
We are not only considering it, but are already actively implementing it. We currently cooperate with ten German online stores, from which Nova Post delivers to the branch or ещ the address. But this is just the beginning: we intend to be present in the shopping cart of every online store, as in Ukraine.
To achieve this, we are negotiating with potential business partners, and we are developing a digital system that will become a single entry point for business customers and partners abroad, allowing them to integrate with all Nova Post services. Already now, any online store can integrate with us via the API system and provide their customers with convenient and fast delivery by Nova Post.
Are you satisfied with the financial results for the first six months? When do you plan to reach the break-even point in the country as a whole?
In six months of our presence in Germany, we have delivered 112 thousand parcels. We have not yet reached the break-even point, as we are still actively investing in development. We should start making a profit by the end of this year.
Do you think that you can break even by operating exclusively in the delivery segment between Ukraine and Europe? If not, what other segments do you plan to work in and what market share do you expect?
We will develop other market segments, and we are already doing so. Generally, our plan is to become a full-fledged player here alongside DHL, DPD, Hermes, and GLS.
We are already expanding our shipping geography. At the end of 2023, we started testing delivery within Germany.
Nova Post is also building its own infrastructure in Europe to be able to deliver parcels quickly between countries within the European Union.
Like in Ukraine, we want to become a delivery partner for European online stores, shipping goods within Germany and throughout Europe. And, of course, we will develop those delivery channels that are most convenient and familiar to local consumers – courier service, parcel lockers, and pick up points.
What are the advantages of your services for business clients compared to your competitors?
We consider our advantages to be speed and digitalization of services. For example, personal online accounts and business accounts allow every client to use our services more conveniently.
In the mobile application, you can find the nearest branch, place an order for delivery right from your home or office, and arrange additional services, such as parcel packaging. With tracking, the customer receives transparency – the ability to always know where their parcel is. All of these services can be accessed from a computer in your personal account.
We provide support and consult on customs brokerage services, respond quickly to requests, and generally do our best to make all our services fast.
We can quickly deliver documents, parcels and cargo of up to 1000 kg. We also provide packaging services and are constantly developing in this area to ensure that parcels remain undamaged.
While many of our competitors specialize in particular categories of cargo, Nova Post delivers everything from documents to cargo and pallets, as well as provides freight services. And all this at a speed that we hope will pleasantly surprise our business customers.
What services are you planning to add this year for private and business clients in Germany?
We are going to add new services to the mobile app so that it has all the same services that our customers in Ukraine have. For example, for private customers, we will provide the possibility to manage deliveries in the mobile app. It will allow every customer to issue returns and forwarding directly in the app. We also plan to make it possible to track the courier online on the map in the mobile application.
We are working on offering delivery across Germany within 24 hours and same-day delivery within one city this year. We are also considering enabling address pickup on the day of submission of the order and adding the option to choose a convenient time slot. Besides, we are constantly developing our network in different countries to provide wide delivery capabilities within the EU in the future.
Furthermore, we are preparing new services for business clients, in addition to those already described. For example, we are currently working on the following options: payment by the recipient, payment by a third party, COD (cash-on-delivery), and fulfillment services for deliveries to Ukraine.
How much investment in development in Germany is planned for 2024?
This year, the company plans to invest about EUR 4 million in its development in Germany.
Yes, our plans are ambitious, but we believe in success. So far, our company is still a startup in European market and is taking its first steps, however, this is not the first time we are creating from scratch. The main thing is to be flexible, ready to adjust and admit mistakes. That’s how you can achieve great results.
About the author
Serhii Symonov
CEO of Nova Post in Germany
