Discusses the distribution network within the country from how products enter to final destination, including reliability and condition of distribution mechanisms, major distribution centers, ports, etc.
Last Published: 8/6/2019

Distribution Channels
Most of Ukraine’s domestic and international cargoes travel via rail or truck.  The share of airfreight in domestic or international cargo transportation is insignificant compared to freight transportation made by sea, rail, or road. The state-owned railway company Ukrzaliznytsia manages the nation's rail network, which ranks third in Europe with 21,700 kilometers of rail and connections to Belarus, Russia, Moldova, Romania, Hungary, Slovakia, and Poland.  Ukrainian highways link to pan-European corridors via the following highways: Gdansk-Odessa; Brussels-Dresden-Krakow-Kiev; Venice-Budapest-Lviv-Kyiv; and Helsinki-Saint-Petersburg-Gomel-Kyiv-Chisinau- Bucharest -Thrace.

Thirteen Ukrainian sea ports (Berdiansk, Bilhorod-Dnistrovskyi, Illichivsk, Izmail, Kherson, Mariupol, Mykolaiv, Odesa, Oktiabrsk, Reni, Skadovsk, Ust-Dunaisk, and Yuzhnyi) and eight river ports process container and bulk imports.  In 2017, 132.6 million tons of cargo (a 0.6 percent increase compared to 2016) passed through Ukrainian ports.  Among the top five types of cargo, only coal imports demonstrated growth due to the need to compensate for the lack of its supply from the temporarily uncontrolled regions of Donbass.

There are two types of customs bonded warehousing in Ukraine: 1) customs bonded warehouses, and 2) temporary storage customs bonded warehouses. An importer can use the latter to temporarily store goods that are subject to certification, awaiting sanitary, environmental, or other entry approvals, or awaiting customs clearance in Ukraine.

Like all countries, Ukraine monitors import-export flows that pass through its borders. The current Ukrainian customs regulation mandates to execute customs declarations for export or import operations. Refer to a list of licensed Ukrainian customs brokers.

Sales Channels

According to the Ukrainian State Statistics Service, Ukraine’s retail trade turnover in 2016 was UAH 1,175.3 billion ($46 billion), a 4.3 percent growth compared to 2015.  Data for 2017 has not been released yet. Independent retailers account for around 20 percent of total retail sales, while outdoor markets account for around 30 percent. Less than half of the overall retail market is controlled by chains, reflecting the considerable development opportunities that remain in Ukrainian retail. 
Fast Moving Consumer Goods (FMCG) - Retail superstore chains are available in the main Ukrainian cities and primarily specialize in FMCG, consumer electronics, Do-it-Yourself (DIY), automotive parts and accessories, cosmetics and toiletries, pharmaceuticals, and health care goods.

The major international investors in the Ukrainian retail FMCG market are METRO GROUP, Auchan, Rewe Group (Billa), and Spar. 
The top four national FMCG retailers in the market are the Fozzy Group, ATB Market, Retail Group, and Furshet.
Regionally, the top retailers include: Tavria V and Kopeika in southern Ukraine; and Pakko, Barvinok , and Kolibris in western Ukraine.

The most popular FMCG outlet formats that opened in Ukraine in the recent years were discounters, corner shops, and supermarkets. 

Consumer Electronics and Household Appliance Chains - Currently, the largest household appliances and electronics market players are Foxtrot, Eldorado , and Comfy.  These chain operators sell most of the consumer electronics and household appliances through their retail outlets located throughout Ukraine. 

“Do-It-Yourself” Chains - The national chain Epicenter remains the leading DIY player, with a market share of more than 50 percent.  The only foreign player in the market is Leroy Merlin, part of Groupe Adeo, which operates three stores in Kiev.  Swedish retailer IKEA confirmed that it will enter Ukraine’s market, opening a store in Kyiv in 2019.
Branded Apparel and Footwear - Multiple national premium fashion outlet chains sell branded clothing and footwear including Argo, Helen Marlen Group, and Melon Fashion Group,  Intertop is a Ukrainian chain for branded footwear. 

Automotive Parts and Accessories Chains - Three nationwide chains, Auto Trade Line (ATL), ZipAvto, and AIS, along with numerous independent retail outlets sell car parts and accessories. There are also regional wholesale chains like Planetauto, Stop -Transit, Pitstop, and Avtostiv.

Beauty and Toiletries Chains - The top four nationwide beauty chains in Ukraine include Eva (560 stores), DC-Watsons (440 stores), Prostor (280 stores), and Kosmo (106 stores). 
Drug (Pharmacy) Chains – Pharmaceuticals are sold through more than 21,000 private and municipal pharmacies and pharmacy retail points.  Private pharmacies dominate at 875 of the  market, while the remaining 13 percent of pharmacies are owned by municipalities.  Many regions and municipalities have been looking to expand or launch so-called 'social pharmacies', which stock essential medicines and charge little or no mark-up.

Consolidation levels in retail pharmaceutical sales in Ukraine are still low, with no chains that have a presence in all regions of Ukraine.  The three largest pharmacy chains (Pharmacy-Magnolia, brand “Apteka Nyzkyh Tsin”), Med-Service Group and Titan (“Zdorovye” brand), account for only eight percent of total pharmacy sales. Given the low level of concentration in retail pharmaceutical sales, there is significant opportunity for international chains to enter the Ukrainian market.
 

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