Russian delegate from G20 YES recalls his experience as an entrepreneur

Vladimir Orekhov is founder and CEO of Tishin Papa. He has a master’s degree from Lipetsk State Technical University. In 2008 he graduated from Financial University under the Government of the Russian Federation.

As a young entrepreneur, how have you experienced the modernization of the Russian economy?

The modernization of the Russian economy has made it much easier for an entrepreneur to launch a business. The government tries to help talented young people to realize their ideas. There is a federal program “You are an entrepreneur” under which young entrepreneurs can get legal and financial support. In addition, there are many different tax concessions to young entrepreneurs.

What qualities do you need to be a successful entrepreneur in Russia? You recently participated in the G20 YES in Mexico. How did these qualities compare to those of other young entrepreneurs?

Above all, every entrepreneur has to be enterprising. An entrepreneur should be willing and know how to make money. They should be in the know of all current trends and constantly find ways to expand their business. They need a good education and a desire to constantly educate themselves. Moreover, they should be confident and sociable. In addition, it necessary to do sports, as the proverb goes, a healthy mind is a healthy body.  It was very easy to befriend the other young entrepreneurs at the summit because we had practically the same qualities.

Describe your experience opening a business in Russia. What infrastructure was in place that made it easy for you? What were the challenges?

I founded my company in 2002. At first, it was a small shop where I worked myself. I sold toys and children’s goods. At first it was a business to make some money for my family, but then I had an idea to create a distribution company. Now my company is called "Tishin Papa", which means Tisha’s Dad (I have a son whose name is Tisha). In the beginning, I just wanted to earn some money and to be independent, which made it easy for me to launch a business. I also liked toys and I worked very hard. Of course, there were quite a number of challenges, the biggest one being the lack of funds. I could not get a bank loan because I did not have enough assets to mortgage. Another problem was that it was not easy to find qualified and hardworking staff. In addition, I did not have my own premises, so I had to rent space. In order to solve this dilemma, I borrowed money from my friends and family and bought a small shop with it. Afterwards I mortgaged the store to get a bank loan, which enabled me to pay off my debts.  I worked very hard and after a while I made enough money to pay off the bank loan.  After that I mortgaged my shop again and got another bank credit which was invested in a warehouse. As for the staff, I worked with everyone individually to motivate and encourage them to perform the best they could.

What is the demand for toys in Russia? Where are they manufactured?

Like children all over the world, Russian children like toys. Demand for toys has increased as Russia’s birthrate has recovered. Cartoon based toys are especially popular. A sequel to a popular cartoon always leads to a significant rise in sales.  There is also a demand for “retro” toys. Such toys are usually bought by children’s parents when they get nostalgic for their childhood. But modern children prefer modern toys. There are several Russian companies which produce toys like retro dolls, soft toys and table games. Other Russian toy companies get licenses to manufacture toys in China. But the entire design is done in Russia.

How are they distributed? How do you find the availability of business partners, logistics, infrastructure and service providers to work with?

At first toys from manufactures are shipped to our wholesale warehouse. Then they are labeled, sorted out according to the needs of our clients and part is kept in the warehouse. We have a long- term contract with a logistics company that provides the shipment of goods to our clients. In addition, I try to attend every toy exhibition and there I meet new business partners, new suppliers and new friends.

What is the demographic of your customer? Has your consumer base increased over time? Diversified? Have you noticed any change over time in the profile of your customers and/or their interests?

We try to fulfill all customers’ needs. But our average clients are 25-35 years old who have one or two children 2-8 years old, mostly women. They are middle- or upper-class people. Recently, parents have begun to buy more expensive toys of a better quality for their children. I think this is a very good trend. Furthermore, small children have begun to have more say in the choice of toys that parents buy for them. And of course, there has been a near-universal embrace of electronic toys.

What is the role of toys in education in Russia? Where do consumers shop for these types of products?

Presently more and more parents prefer to buy education toys in Russia. These toys help prepare children for school. Education toys for schoolchildren help them to understand how things around them work. Some toys are aimed to set children thinking of their future careers. Consumers can buy toys in specialized children’s shops. For example, in the “Tishin Papa” chain stores there are a wide variety of education toys for all age groups.