Transparency of ukrainian businesses . Results of consumer friendly business practices survey.

20 May , 2008 Joint initiative of the EU and United Nations Development Programme « Consumer Society and Citizen Networks » presented results of “Consumer friendly business practices survey. Ukrainian experience” during a press-conference held at “Ukrainian time” press-centre.

The survey goal was to research business practices oriented at satisfaction of consumers' needs. It was targeted at 900 Ukrainian and international companies operating in Ukraine which are involved into business to consumer sale of goods and services. A group of experts headed by ex-president of Consumers International (CI), the world's largest independent consumer NGO, Mr. Julian Edwards planned to research the following sectors of Ukrainian consumer market:

• Banks providing services to natural persons;
• Mobile operators ;
• Insurance companies ;
• General retailers ;
• Product manufacturers ;
• Car dealers / importers ; and
• Producers of food and beverages

Field research was conducted from November 2007 till February 2008 by means of telephone contacts and filling in of electronic questionnaires containing questions referred to basic information on goods/services rendered by a company, system of consumers claims processing, special offers and loyalty programmes developed to enhance consumers' loyalty and company's image. The total of 900 representatives of business companies from marketing and PR departments were contacted in the process of data collection.

Surprisingly enough, 2 out of 7 sectors fell out in the survey process due to complete lack of response, the former being mobile operators and car dealers / importers.

“The strongest message by far which came from the research was provided by the unwillingness of most companies to provide any information,” – states Julian Edwards, CI .

The expert presumes that such lack of response in respective sectors could come from concerted actions agreed upon by market stakeholders or, to all appearances by the fact that companies are not interested in improving quality of their services and giving to consumer possibility of choice of a more economically beneficial option.

Mr. Edwards summarizes it saying , - « We have with regret to conclude that far too many consumer product and service businesses in Ukraine - particularly those supplying cars and telephones, but also in the other sectors we covered - simply do not see the need for consumers to be better informed about what they are being offered, what they should expect, and how the services of different suppliers compare. This is bad news for Ukrainian consumers and is unlikely to encourage the competitiveness of Ukrainian business. »

This concept is supported by a sad statistics , out of more than 900 companies which were offered to participate in the survey just 38 did in fact agreed to give the necessary information. The general companies' overview proved that consumer friendliness is not a prerogative of big businesses – participants' profile varied from some 2 sales outlets to 6000 high street branches of a state banking institution.

Director of economic research institute Ihor Burakovsky mentions that : « Based on requirements of WTO accession, Ukrainian market will see subsidiaries of foreign banks and insurance companies enter, meaning a harsher competition for a client and new service standards. Expansion of import is an opportunity for a consumer to find a variety of goods at affordable prices ».

Still there is a circle of Ukrainian companies which are aware of the necessity to approach integration processes happening in Ukraine 's economy. These companies displayed openness of their efforts not only to supply high quality goods and services but also to provide information regarding their activities in order to improve information sharing on Ukrainian consumer market. ( Äîäàòîê 1 ).

Proceeding with the discussion of the necessity to adopt consumer oriented services Klavdia Maksimenko agrees that : « Ukraine has to be ready to take up new market rules together with a huge number of new companies and products which will shortly enter Ukrainian market. Lack of consumer orientation can adversely affect competitiveness of Ukrainan companies now that Ukraine has joined WTO. European trading space is accustomed to the strong influence consumers' voice has on economic processes, which means that companies that tend to overhear it will gradually give in to their stronger and more pro-consumer competitors » .

For more information, please, contact Maria Savchenko, CSCN monitoring and information expert by phone: (+380 44) 253 67 05; 253 67 32; fax: (044) 253 6679 :

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