Ukraine’s National Post UkrPoshta and USAID CEP to enhance export capacity of Ukrainian SMEs

UkrPoshta and the USAID Competitive Economy of Ukraine Program have launched the initiative E-Export – your key to success and business expansion!” The main focus of the initiative is to support Ukrainian small and medium-size enterprises (SMEs) that manufacture handmade products to enter international markets. The initiative will provide SMEs with a guide on how to start selling abroad and reveal the success stories of Ukrainian entrepreneurs who already export their products internationally.

In 2019, there were over 25,000 online vendors in Ukraine generating $3.5 million in income. Global online marketplace Etsy hosts almost 1 million Ukrainian items, and Ukraine is among the top 10 markets, represented by 6,000 entrepreneurs. This number may increase in 2020, as e-commerce is just about the only way for a small business to stay afloat during the time of closed borders and quarantine: customers stay at home and buying online is their only option. According to research conducted by  Rakuten Intelligence, e-commerce volume in the U.S., the key export market for Ukrainian businesses, increased by 30 percent from the beginning of March through mid-April, compared to the same period last year. This offers Ukrainian handmade manufacturers new export opportunities.

The joint initiative of the UkrPoshta E-Export School and the USAID Competitive Economy of Ukraine Program (CEP) aims at preparing Ukrainian SME handmade manufacturers to export their products. Participating Ukrainian SMEs will receive a step-by-step guide on how to start exporting, essential legal and financial information, and tips on foreign trade expansion for those who already are exporting. UkrPoshta, in cooperation with Oleksandra Tomashevska, e-Commerce expert and founder of E.C. Consulting, and with support from USAID CEP, elaborated the step-by-step guide with recommendations, “E-Export: starting a business from Ukraine: legal, taxation, and customs aspects.” The guide contains practical tips for entrepreneurs and essential information on business management, such as filling in customs declarations, documenting shipments, receiving payments from abroad, financial monitoring of incoming transactions, administering income tax, etc. Case studies illustrate the most common issues.

“Ukraine is one of the leaders of the handmade market on Etsy, giving way only to the UK, France, and Germany. This is an ultimate success of Ukrainian handmade manufacturers. However, Ukrainian sellers lag behind on Amazon and eBay. Together with UkrPoshta, we will show Ukrainian entrepreneurs the export opportunities of e-commerce. The success stories of those who have already walked along this path speak for themselves: the e-commerce export opportunity window is open, so we must use it,” says Dusan Kulka, USAID CEP’s Export Promotion Team Leader.

“We want entrepreneurs to realize that Ukraine already has built adequate infrastructure for exporting online, opening trade opportunities despite quarantine border crossing restrictions. E-export is a simple way to try selling abroad directly, as it requires minimal initial investment. UkrPoshta branches are in every community of Ukraine, so everyone with Internet access can sell online,” says Yuliia Pavlenko, Director of UkrPoshta’s International Operations Department.

Ukrainian manufacturers who started their companies in Ukraine without much investment and for whom e-export became a driver for their own businesses have joined the initiative. The first success story tells about Mykhailo Kuznetsov and Maksym Hopanchuk, the founders of KGUBrass. This year, Maksym won the Payoneer 2020 Entrepreneur of the Year Award in the Disruptor of the Year category, from among 3,500 nominees in 120 countries.