Evgeny Rudenko, CEO of KIVI: “We plan to enter the top 10 brands of televisions in the world in the coming years”

The KIVI TV brand turned one year old this year. At this young age, the company has already become the second largest

Ukrainian market, and also settled inBelarus, Kazakhstan and Russia (3rd, 5th and 9th places in sales, respectively). 500,000 TVs were sold under the KIVI brand. At the same time, the company is quite non-public. The presentation of the third line of TVs was full of partners from neighboring countries, but very little press. The interview you are reading with the CEO and founder of the company, Evgeny Rudenko, is the first in the history of KIVI.

Dream company

gg: What happened before KIVI? Where does this TV experience come from?

I was introduced to the electronics business in 2005at Unitrade. At that time, it offered such a high level of service that is still not found on the market. Employees ran to work with pleasure, clients – to the shops. This formed my understanding of what an ideal company should be like as a business and as an employer. I had a dream to open my own business.

After I worked at City.com, this is the same group of companies. Then he moved to "Hello", where he was the third person in the online store. It was the year 2008. For me it was a new step, the company and the project were on the drive, it was an innovation for the market. "Rosette" only six months as it started.

I wanted outstanding results, but with phonesthey were not reached. Whatever you do, offline retail still sells more. I was looking for a new category with great potential. Smartphones have become the main personal device. Obviously, there will be a large screen with an Internet connection and personalization - smart TVs. And they have become my favorite category. I wanted the company owner to talk about them at the company's birthdays. Happened. Within 3-4 years I was able to achieve this goal, we sold about 50,000 devices a year and occupied about 5% of the market.

I wanted outstanding results, but I couldn't achieve them with phones. Whatever you do, offline retail still sells more. So I was looking for a new category with great potential

TV – This is a family device.But with the correct development of the category, even within one household, the need for it grows. Smart TVs are not only suitable for entertainment, but also for education, they have endless potential. For example, they are better suited for teaching children than smartphones and tablets – The screen is large, hands free. You can watch films with subtitles and explainers. I teach children how to do exercises, and it’s easier with TV. They don’t need to be persuaded - they hear the familiar melody of their favorite video and run away on their own.

During my work at Allo, I launched an offline projectand made a TV showcase for him, opened the first Apolo store, developed the Nomi brand. But I understood that nobody really needed the category of TVs, it brought its million a year, but it was not critical money for business. In addition, smartphones influenced other categories, we could not sell TVs under the conditions on which we wanted. As a result, I cooled down and thought more and more about my company. He even wrote a business plan, however, in a completely different field.

Parallel to my evolution, about the sameMy current partner, Cyril Khilko, has also developed. He has been in the television business since 2007. We were friends for many years, we discussed everything that is happening on the market.

At some stage we realized that we have a bigexpertise in televisions and knowledge of not only the Ukrainian market. We felt the pulse of neighboring countries, literally week by week: the structure of brands, top positions, market volumes, who goes where, etc. This was important for development in Ukraine – our markets are very similar. The brand structure, prices, and segmentation are the same. Therefore, we could copy the best practices in our country. There are differences in volumes and small – in detail. For example, there is such a thing as API (English – average price index) – price index relative to the average market price. Samsung API on the Ukrainian market – 150%. In Belarus – 100%. There is a higher concentration of LG and Samsung. Accordingly, the average bill of a Samsung TV sold is equal to the average bill of the market. This suggests that we will be even better off in such a market. And indeed, in less than a year, we reached third position in this country.

</ img>

In 2016, I went to China to Cantoneseexhibition and saw there the televisions of one factory. I really liked the design and the principles of its work. I told Kirill about this, and we decided to create our own brand of TVs. A month later, they discussed the contract, and in November the first models were already put on the shelf. The first batch was about 10,000, it had about 10 articles. Everything happened very quickly. But today we have reached such volumes of sales, analogues of which I do not know for local companies.

gg: How did the name appear? Do you want to associate yourself with a fruit or a bird?

The name we chose together with a partner and a groupbuddies. We had a list of about 200 options, all of four letters. Type OMNI, VIKI, etc. They wanted it to sound simple, easy to remember, and evoke pleasant emotions. We stopped at KIVI.

We do not insert an image into a trademark, do notwe want to impose associations. I think that we have our letter K has great potential. She is very progressive. The logo was developed by Belka Strelka. We ordered a brand book and generally the whole story.

Deferred Demand and Best Market Expertise

gg: What is happening now on the Ukrainian TV market?

Now the volume of the Ukrainian market is 1 millionthe year we started &#8211; 600,000 devices. It is growing rapidly due to large pent-up demand. Potential &#8211; about 2.2 million TVs per year &#8211; Considering that we now have about 15 million households, each has 1.5 televisions.

People put off buying a TV based onbudget, look at small frames and thick diagonals. But we have become a powerful driver for the market &#8211; retail, consumers, competitors. We make technology accessible to a core segment of customers. Our TVs have long had Bluetooth technology, which allows you to connect external devices &#8211; speakers, keyboard, etc. For LG and Samsung, this technology is available only in the fourth from the bottom line. We have quantum dot and WCG technologies. Samsung will only have this in top models. We put it all together and build price positioning between the cheapest brands and between Samsung and LG. This is our strategy.

We are not afraid of Xiaomi. We have a product and a team of 100 people with the best expertise in the industry.

gg: What is your share in Ukraine now?

18.7% of the market in units, second place in units afterSamsung. In money &#8211; third after Samsung and LG. Our devices are 15%-20% cheaper than LG and Samsung, and we have become a big challenge for low-cost Chinese brands, of which there are about 50-70 in each market, and all are cheaper than us. Samsung and LG cannot lower their prices, we can, and at the same time we are not inferior to them in anything.

gg: Who do you consider to be your main competitors?

These are mainly low-cost Chinese brands. In each market there are about 50-70 pieces. This is a private label of Ukrainian companies, and Xiaomi.

gg: Are you not afraid of Xiaomi? They are number one in smartphones already in Ukraine.

We are not afraid of anyone. We have a product.But the product &#8211; that's half the battle. The company’s 100 people (60 in the Kiev office and another 40 in the regions) spent three years developing processes, expertise, and before that they were the best experts in the industry. We are focused only on TVs. There are no other companies like this in the region. In the USA there is Vision.

So Xiaomi will enter the market, of course.They have a common model &#8211; 220 SKU, and they will also use it to sell TVs. Yes, they have a lot of brand knowledge and a good product. But there are no processes, no understanding of culture, no understanding of consumers.

</ img>

100% Ukrainian development

gg: How important is the brand in TVs to Ukrainians?

The brand is very important. Buying a well-known brand, a person, firstly, understands that he will not fly, the products are sold for a long time and everyone knows. Secondly, this is prestige. The steeper and more famous the brand, the more cool you are for your environment.

But when the price tag is low, the consumer is readyto risk. Thus, it gives way to new brands, which then become well-known and proven. But new brands have a chance when they have a clear positioning from the very beginning and work on knowledge, on Brand Awareness. This helps to overcome barriers. We, as a brand, are now striving to become famous and understandable, so that the client is not afraid that he will get stuck if he buys us, or friends will laugh. Therefore, we are working on brand awareness. Including - thanks to this interview.

gg: What are the features of your brand?

Currently our communication platform is:"KIVI &#8211; when you wow.” Surprise and attract people &#8211; this is the DNA of our brand. Our audience &#8211; These are people 25-35 years old. We want to make them “wow!” Lots of content &#8211; Wow! Farfield &#8211; Wow! Everything we create must have a wow factor.

gg: What features help sell TVs?

Key driver for replacing TVs &#8211; ThisSmart TV. When we first entered the market, sales of “smart” models accounted for 40% in unit equivalent. Today it is 70% and a clear trend. People are willing to spend money on a big screen, but they want it to be able to do the same things they can do on a smartphone. Plus good sound is important.

If we talk about diagonals, then 50% of salesaccounts for the 32nd diagonal and below. This is due to financial opportunities, because other markets, Belarus and countries with more developed economies and affordable lending, show that if a person has the opportunity, he buys the 50-55th diagonal. Our northern neighbor accounts for 17% of this diagonal. Such a TV even fits odnushku. It’s like a car. Everyone wants a Mercedes, but not everyone can afford it.

The key driver for replacing TVs is Smart TV. Today it is 70% of sales. People are willing to spend money on the big screen, but they want to be able to do the same on it as on a smartphone

After a person buys his first Smart TV, the question is usually replaced by a good “smart” TV.

Many who transport goods from China find a factoryand they buy some budget solutions from her, do not finalize anything and want to take the buyer at a price. But such a TV can have 512 MB of RAM and 4 GB of internal memory. Let's say it starts, and even the stars align so that it will work. A person sees the price, hears that it’s a Smart TV and doesn’t even blame himself because the person bought it for three kopecks. Working &#8211; and okay. The share of sales of such TVs is large. But as soon as a person has the opportunity, he will replace such a model. Now in Ukraine there is such a process.

gg: Do they require anything from you?

Yes. We get a lot of criticism.We are a brand that creates a product. It's hard. I am sensitive to criticism. But creating a new software product, where there are many different nuances, and deadlines are tight, is difficult. Over the three years of our company's operation, we have released three lines of televisions. Each line &#8211; on the new version of Android. On an open OS that we create ourselves. We are responsible for stability, functionality, for everything we develop. Before we hit the shelves at Citrus, the store owner personally tested our televisions. And we had to take into account his wishes in order to sell there. Now we have 30% of Citrus TV sales.

gg: Why optimize Android TV?

Because it does not work very well for everyone. All the good Android TV makers are modifying it. Previously, both complained about Philips, and Sony.

gg: What exactly did you refine on your TVs?

Every generation of our product is getting better. Initially worked on optimization and speed. There are already a lot of changes in this generation of televisions. We were the first in the Ukrainian market to introduce Farfield technology. This function is available in two of the four rulers. It allows you to control the TV with your voice without a remote control, works as a Google Assistant. The TV has four microphones to hear people and recognize speech even in noisy environments.

Imagine watching TV and wanting pizza&#8211; and ask in a voice right on the couch where the nearest pizzeria is. Or you come home, are tired, take off your shoes and at the same time ask the TV to turn on your favorite movie

We are also one of the first on the Ukrainian marketreleased TVs on Android 9. We have a proprietary Vision 3.0 shell. Its features are maximum customization, you can change everything, font size, icons, leave at least one HDMI icon on your desktop if you want. In addition, content has appeared in this line. Right in the first menu of the TV. That is, if a person wants to watch a movie, he does not need to go to the second, third, fourth level of the menu &#8211; everything is there at once. All billing under one KIVI account. This means that you don’t need to pay subscription fees to multiple content providers; tens of thousands of licensed films are immediately available for free. Our people don't like to pay. We want to give them convenient access to licensed content. We hope that they will get used to it and eventually start buying films. After all, it’s much easier than searching for something in the browser.

gg: What is this content?

We integrated the entire IVI film library. They have a distributor of films, including in Ukraine. In Russia, on the contrary, we use Megogo. Because the IVI is weaker here, the Megogo is there. And they provide more favorable conditions for a weaker region. The viewer pays for the content for us, and we distribute it among the partners. But such a scheme only works in Ukraine.

Content is one of the key components of our strategy.

Also for the new line, we have developed a remote control. It is produced by a Korean company.

</ img>
KIVI developed its remote controls independently. New (in the background) and old (in the foreground). The new model is also available in white

gg: What is this for?

Because we believe that every new generation should be better. Successful is one who is changing fast.

gg: How much do you spend on development?

Lot. For example, we have not only OEM production, but also ODM. This year we produced our own cases for TVs, completely poured backs. It sounds simple, but you need to create a design, test the form so that it meets all quality standards, the gaps were not large, the materials were visually and touch premium, so that the equipment did not heat up, it looked as aesthetically pleasing as possible, etc.

After the development of the design and engineering project, the form is poured. So, we invested $ 70,000 on just one diagonal. The back cover cost $ 50,000, the front cover - another $ 20,000, it's easier.

We want to enter the top 10 brands of TVs in the world. To do this, you need to sell 3%, that is, 6 million devices per year

gg: It turns out that you have your own employees in China, because it is impossible to control such things directly from Ukraine? How many of them?

Here in the office the visual part is being developed,logic, system, architecture, hardware. That is, we are creating some kind of solution, but we are attracting outsourced specialists who are involved in drivers and system stability. It turns out that in China there is a project manager and partners who help with hardware and software solutions.

We also deal with content in Ukraine.We agreed with IVI and other content providers on integration. We signed contracts with everyone. Our task &#8211; link it all into one visual so that it works and is easy for people to understand. We have 12 programmers and 1 designer in Kyiv.

That is, we develop everything 100%, but we outsource the implementation to our partners. Just like Apple &#8211; Everything is designed in the USA and made in factories.

</ img>
KIVI Presence Map

gg: What kind of factory, by the way?

This is a high-tech factory in Shenzhen, one of the top 3 exporters in China, produces up to 10 million televisions per year.

gg: Have you been producing quantum dot models since this year?

Since the past, we had the 65th diagonal.This year three diagonals appeared &#8211; 43, 50 and 55. We plan to release OLED models from 2021. For now they are available to ODMs and only to the biggest brands. They are produced only by LG and control everything on the market, including prices.

gg: What are the key priorities in software development?

We focus on the stability of the system. The rest is already a rocket bomb.

gg: What are your ambitions?

We have all the resources to build a powerfulstrong TV brand and enter the top 10 in the world. This is not fast, for this you need to sell 3% of the world market. World market &#8211; this is 200 million. Accordingly, we need to sell 6 million devices per year. The potential of our markets &#8211; 12 million. Therefore, we will need expansion. We look at the markets of Central Asia. We are thinking about India, Bangladesh.

Special project

Artificial Intelligence on TVs: How It Works

Where can I buy KIVI TVs: 

  • Power socket
  • Citrus
  • El Dorado
  • Foxtrot
  • F.ua
  • TTT