Ukraine: Selling and Buying

Reaching the Consumers

Marketing Opportunities

Consumer Behavior

The price factor has most value for Ukrainian consumers. In addition, they are greatly attracted by western products, which are of higher quality than national products, and are often difficult to obtain in the hinterland. The quality of after-sales service is a criterion which can set a foreign company apart, for in Ukraine shops very rarely exchange defective goods, and for this reason consumers have a very poor image of this aspect of sales in the country.

Consumer Profile and Purchasing Power

A household's average income is estimated at 4EUR 50, and 90% of the average Ukrainian's budget is devoted to primary expenses (food and housing). The middle class, in the western sense of the term, represents about 9% of the population, and its number is growing at the same time as the country's economy; it is strongly attracted by western products. A large proportion of the popular classes also identifies with the middle class, since a third of the population feels it belongs to this group. Most Ukrainian consumers belong to the 35-49 age bracket, and to the 10-20 one. This latter category stands out for its greater consumption of western products, while the former contribute most to the real estate and ready-to-wear markets.

Consumers Associations

Ukrainian consumer association
DSSU , The State Committee of Ukraine for Technical Regulation and consumer Policy.

Main Advertising Agencies

Leo Burnett Ukraine
Saatchi & Saatchi Ukraine
EURO RSCG Ukraine
Sahar
Inart

Distributing a Product

Evolution of the Sector

Few structures carry out distribution and the follow-up of imports. The distribution sector remains very traditional and fragmented, but the arrival of foreign competitors could widen the range of products and services, contribute to stabilizing prices and stimulate competition. Franchises are growing, but there is a legal vacuum as far as intellectual property is concerned, and barriers to the development of small companies.

The most developed distribution circuit is retail trade. Food shops can either be non-specialized or specialized in a single range of products. There are also department stores especially in Kiev such as the Department Store Ukraine, the Zum which is the equivalent of Printemps in Paris (Selfridge's in London), the department toystore, Dytiachy Syit - Children's World, the large jeweler's Koschtan, and for perfume and cosmetics, Lancôme.

The market share of non-organized retail is increasingly encroached upon.

Market Shares

Non-organized retail shops have 43% of the market, local shops control 25%, while supermarkets have approximately 12% market share.

Organizations in the Retail Sector

Association of Ukrainian Distributors

Market Access Procedures

International Conventions

Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Wassenaar arrangement on export controls for conventional arms and dual-use goods and technologies

Main International Economic Cooperation

Ukraine is member of WTO since 2008.

Non Tariff Barriers

The only important barrier to trade and investment in Ukraine is the country's difficulty in transiting from a planned economy to a market economy. Following economic reforms, the country experienced a relative success concerning export and investment.

There are real structural barriers putting a brake on trade and investment in Ukraine : corruption, lack of protection in terms of intellectual or industrial property, lack of foreign exchange, an ill defined or too bureaucratic hierarchy, an inefficient and little developed banking system, law, license and tariff changes... Investment is precisely curbed by the absence of private property and a coherent privatization programme, non convertibility of the country's currency and lack of financial liquidity, change of legislation relating to investment, lack of quality, lack of competitive prices for hiring or purchasing representative offices, poor infrastructures, political instability...

Customs Duties and Taxes on Imports

Average customs duties are between 10 and 15%.

Customs Classification

Ukranian customs follow the recommendations of the WTO and apply the Harmonized System.

Import Procedures

The import duties to be paid by a foreign importer in Ukraine vary according to the type of product: alcohol, tobacco, motor cars, tires, jewelry and other luxury products. The payment of these duties must be effected in the country's currency. Excise duties are also paid in the local currency and are calculated as follows: for non luxury products, a percentage is applied and for luxury products the excise duty is not calculated on the customs declared value but according to volume, number of units or weight of the import.

Importing Samples

The customs' regime regarding samples is strict and only allows this kind of importation on condition that the sample will be re-exported in its entirety to the country of origin or will be destroyed by customs.

For Further Information

KMU
Ministry of Economy of Ukraine
Ministry of Finance of Ukraine

 

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Organizing Goods Transport

Ports

The port of Odessa
The ports of Ukraine
The port of Illitchevsk
The port of Nikolaev
The port of Yuzhny (website in Russian)
Location of the main ports in Ukraine

Airports

Borispil international airport, Kiev
Donetsk international airport
Dniepropetrovsk international airport
Lviv international airport (only in Ukranian)
Odessa international airport

Sea Transport Organizations

Ministry of Transport and Communications

Air Transport Organizations

National Civil Aviation Administration (website in Ukrainian)

Road Transport Organizations

National Road Department

Rail Transport Organizations

National Railway Administration

Identifying a Supplier

Type of Production

The last few years, Ukrainian industry benefited from to the rise in production of automobiles (+60%), machines for the mining industry (+34%), and wagons for rail transport (+31%).

Metallurgy and metal processing represent 20% of the country's GDP. Mechanical construction represents 13% of Ukraine's GDP. The agrifood sector represents 17% of Ukraine's GDP (the country has a very strong agricultural potential with lands which are among the most fertile in the world). The chemical and petrochemical industry represents 6.7% of the country's GDP. Ukraine is a big exporter especially of fertilizer.

Manufacturers Associations of the Main Industries

8 professional associations listed for Ukraine.
Choose your sector Chemicals, pharmaceutical productsEnvironment, EcologyJustice, lawServices BtoC/BtoB & other services

Trade Agencies and Their Representations Abroad

Ukrainian Chamber of Commerce and Industry

Enterprises Federation

Catalogue of leading enterprises in the Ukraine

 

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