Trends in development of wholesale trade in Ukraine

Economic Annals-ХХI: Volume 170, Issue 3-4, Pages: 38-42

Citation information:
Ilchenko, N., Kulik, A., & Magda, R. (2018). Trends in development of wholesale trade in Ukraine. Economic Annals-XXI, 170(3-4), 38-42. doi: https://doi.org/10.21003/ea.V170-07

Nataliia Ilchenko
D.Sc. (Economics),
Associate Professor,
Head of the Department of Trade Entrepreneurship and Logistics,
Kyiv National University of Trade and Economics
19 Kyoto Str., Kyiv, 02156, Ukraine
i_natalya@ukr.net
ORCID ID: https://orcid.org/0000-0003-4052-571X

Anna Kulik
PhD (Economics),
Associate Professor of the Department of Trade Entrepreneurship and Logistics,
Kyiv National University of Trade and Economics
19 Kyoto Str., Kyiv, 02156, Ukraine
kylik_anna@ukr.net
ORCID ID: https://orcid.org/0000-0002-2601-3833

Róbert Magda
PhD (Economics),
Associate Professor,
Faculty of Economics and Social Science,
Szent István University
1 Páter Károly Str., Gödöllő, H-2100, Hungary
magda.robert@gtk.szie.hu
ORCID ID: https://orcid.org/0000-0001-9350-6673

Trends in development of wholesale trade in Ukraine

Abstract. The article focuses on the problems of the development of wholesale trade in Ukraine. Adapting the activities of wholesalers to the changes taking place in the wholesale market and the development of e-commerce in the conditions of globalisation and the integration of economic processes require the formation of new ways of interaction in supply chains and optimisation of business processes. The purpose of the research is to develop proposals regarding the development of wholesale trade in Ukraine, taking into account the experience of European countries. To do the study, the authors applied comparative analysis and empirical research (in 2017, thirty enterprises of wholesale trade were investigated).

Basing on the conducted research and taking into account the experience of the leading countries of the world, the following scenario of the development of wholesale trade in Ukraine is proposed.

1. On the basis of the conducted research it is proved that the wholesale turnover in Ukraine tends to decrease – 61.1% of the answers, however 52.8% of the respondents claim through that the wholesale turnover at wholesale enterprises where the respondents work will increase in the next three years. They foresee the development of the horizontal integration of wholesalers, since wholesale trade enterprises have advantages and fundamental differences associated with the period of turnover of funds. Also, such is the respondents’ opinion regarding the vertical integration of wholesale enterprises in retail trade. Only a small number of the respondents agreed that wholesale companies would merge with retailers. Therefore, we can assume that this trend is decreasing, and there will be no significant changes in this area in the coming years.

2. The most effective way is the development of wholesale trade as a result of focusing on one of the functions (for example, specialisation in providing logistics services, provision of warehouse services or services to ensure the organisation of goods, the development of 3 PL (PL – provider of logistics services), provision of logistic services by 4 PL-providers with regard to storage, transportation and processing of orders). Such functions are often assumed by the former distribution companies. We consider this direction of wholesale trade to be the most possible. However, this can be achieved only in the presence of warehouses.

3. We have provided a conceptual framework for the development of wholesale trade in accordance with the implementation of the omni-channel strategy. The application of e-commerce in the activities by wholesalers (for B2B businesses) increases the level of customer service in the modern environment. The respondents acknowledge the tendency to create their own online stores at wholesale enterprises – 89%, which correlates with 97% of the respondents who will increase wholesale trade in e-commerce in the next three years.

The introduction of e-commerce in the activities of wholesalers (for B2B businesses) will contribute to the enhanced level of customer service in the modern environment. Yet, the effective use of the omni-channel strategy is a complex process that requires integration of advanced technology and transformation of outdated organisational structures and business processes.

Keywords: Wholesale Trade; E-commerce; Multi-channel; Omni-channel; Fulfillment

JEL Classification: F10; М21

DOI: https://doi.org/10.21003/ea.V170-07

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Received 14.04.2018