The e-commerce giant faces unique challenges operating in Russia.
NEW YORK (TheStreet) -- Ozon is Russia's equivalent to e-commerce giant Amazon(:AMZN) though the two companies couldn't be more different.
While Ozon -- like Amazon -- offers consumers a slew of products like books, electronics and video games, the company must deal with the unique challenges of operating in Russia.
"How many challenges can I name? Is there a limit?" laughs CEO Maelle Gavet, a French-born former consultant who joined Ozon last year.
Because UPS(:UPS) and FedEx(:FDX) don't operate throughout all of Russia, Ozon has its own courier service. And rather than delivering to homes, goods are delivered to over 1,000 pickup points throughout the country where they are then collected by customers.
Also, since credit cards aren't used frequently in many parts of Russia, over 80% of Ozon's orders are paid for in cash.
"We have to build out a very different structure in terms of getting the cash to the customer and dealing with the return, because you have more returns when orders aren't prepaid," Gavet said.
Ozon also has an 8,000 square-foot warehouse in the city of Tver, halfway between Moscow and St. Petersburg, where its inventory is stored.
To help build out its distribution network, the Moscow-based company raised $100 million in September. Revenue, which topped $140 million in 2010, is expected to grow 35% this year.
While Ozon has been around for 13 years, it's only recently that the site has taken off.
Gavet attributes this lag to low Internet penetration in Russia, which hovers around 43%, according to the International Telecommunication Union. Of this figure, only 15% to 20% make online purchases.
Internet usage in the country, however, is expected to grow 15% annually, giving Russia the highest number of Internet users in Europe within the next two years.
Still, the Russian market remains too nascent even for most established U.S. e-commerce companies.
Amazon has virtually no presence in the country and eBay(:EBAY) didn't launch a Russian language version of its site until last year.
"It's always difficult to judge whether these companies will be successful or not," Gavet said. "They have deep pockets and they have amazing knowledge and experience, which will be tough for us if they come. On other hand, we're not afraid of competition so we'll see what happens."
Ozon joins a host of other high profile Russian Internet companies, including Yandex(:YNDX) (the "Google(:GOOG) of Russia"), and social networking operator Mail.ru, a Facebook investor.
We spoke with Gavet on a recent visit to TheStreet's video studio to learn more about the company.
--Written by Olivia Oran in New York.
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