Wednesday 6 February 2008

Chicken Kiev

Wow, it is amazing how the mood in Johannesburg suddenly got all negative. These power outages are really freaking people out. I am even hearing black people talking about leaving the country. None of this is good. And I was in such a good space. I had the most incredible adventure in Kiev this past holiday period.

I went to Ukraine this last year end with this very intriguing guy called Jacques Duyver. I have known Jacques for about 2 years now but I really got to know him on this journey to Eastern Europe. I learnt a lot from this man and I was very impressed with his insight and entrepreneurial spirit.

Both of us were in awe of Kiev. The place runs like New York. It seriously doesn't stop; 24 hours a day there are restaurants, clubs, bars, discotheques, and they are vibing! The jol was world-class and the energy was inspiring. There are 5 million people in the city and the place is seriously under construction. You think the national bird of South Africa is the blue or yellow crane, well, you should see the cranes in this place. They are building everywhere. The place is pumping. We were also very fortunate to have met some solid citizens who gave us the low-down on how things work. It all started with one of Jacques' Harvard colleagues who was from Kiev. Yes, we had our own inside man who then networked us with other entrepreneurial Ukrainians, and what we learnt was mind-boggling.

Fist of all, there are almost 50 million people in Ukraine and they are highly educated. Then, there is very little credit card penetration in the Eastern block and just about everyone there deals in cash. Banks are not widely trusted and the mattress is the place to store one's loot. But, we are pretty sure the mattresses in Kiev are not very lumpy because the average salary, for someone with a respectable job, is just under a thousand US dollars a month. In terms of the prices, well, it is not London and it is certainly not Moscow. I would say it is slightly more than South Africa, which makes hotels and eating out more palatable. Taking people out for dinner in London is a very scary proposition. Then when you get to Moscow you wish for London prices. But, back to Kiev. The restaurants we ate at were stunning. And people were living life to the full. How though do they survive earning under R7000 a month with prices on a par with South Africa? Well, everyone is on the take. The place has a black market economy which is pervasive and this is the way it works. Everyone has an angle and one has to be on their toes at all times. But, you won't get stabbed or mugged. You may though get hustled a few times.

There appears to be little regard for intellectual property; piracy is rife. And, like the rest of the emerging markets, the brands rule. From the high fashion labels to the cars and iPods. Ukrainians are lapping it all up. They are not snobs though like you find in Moscow or St. Petersburg, where, these days, you have to super rich to fit in. But they certainly do look to the brands as their new Gods. And, when it comes to online, well things like Web-based retail has a different slant there. Because credit card penetration is so low, things like are not that convenient because making an online payment with a Visa or MasterCard is not so simple. So, a new solution presents itself. What they have there are PostNet type of stores, whereby you can go into a general purpose store, surf the web on a PC in the shop, pick out something from Amazon, and then the store orders it for you on a community style credit card. You then pay the store in hard cash and a week or so later you return back to the store to collect your goods. The exciting new local online retailer could really do great business in a place like Kiev. I will tell you more about WantItAll soon – this is a highly compelling offering – something fresh and innovative here in South Africa. But back to Kiev for now; they even have a virtual type of money for online transactions. Not that dissimilar to Nigeria, where they use cellphone airtime as currency.

It is safe to say that Jacques and I were amazed by all these trends, and our minds were racing with regards to the opportunity. I think media giant Nas Pers deserves some attention on this point; think about the positions that have gained in Poland, Russia, China, Brazil, etc. The emerging markets are cooking, and from my perspective it represents massive opportunity in the online space. Sure, there are challenges (like the mafia), and culturally there is a lot to absorb, but when one considers the numbers it is quite overwhelming. For example, if you take Russia, Poland and Ukraine, you have a population as big as America. And credit cards are coming there. In the next few years it is all going to change and the entrepreneurs who take the gap are going to clean up. The world is changing fast. Our world is changing fast. If I just think of this past month here in South Africa I would say that change is happening at light speed. Talk about fast times!

I am going back to Kiev this month, and I can't wait. I am actually going to Berlin because our latest film project, Jerusalema (, got invited to the Berlin film festival, and we are all going over there to support the film makers and to celebrate. And from Berlin I am going back to Kiev to do some more exploring. And of course, to eat some chicken. Yes, we did in fact have a tasty portion of the famous Chicken Kiev and it was cool.

Lastly, I know what many of you are thinking. Yes, the women of Ukraine. Well, have you ever seen pictures of Yulia Tymoshenko. Is she a fox or what!? Who has ever heard of someone being turned on by a country’s prime minister. I think that says it all.

Posted by Ronnie Apteker