OZON’s Acquisition of Sapato Shows That Good Startup Ideas Translate Well

Russia’s largest online retail site OZON announced today that it bought Sapato, a startup launched 18 months ago that sells shoes, as well as clothing and accessories. It the news feels like déja vu, it’s because Amazon did virtually the same thing in 2009 when it acquired Zappos. Adopting smart business ideas that have worked well elsewhere is a bit of a habit at Fast Lane Ventures, the Moscow-based incubator which started Sapato and sold it to OZON today for an undisclosed sum, and also recently announced an investment in Russian-focused AirBnb competitor TravelRent. Judging from today’s acquisition, it’s a habit that has a lot of potential to pay off in emerging markets.

Sapato has managed to become Russia’s third most-recognized online retailer in under two years, according to a press release announcing the acquisition. Its 2.5 million visitors per month make it an obvious target for OZON, which is a leader in the space and looking to extend its lead. Online shopping is trending upwards in Russia, according to a presentation made for the Russian Chamber of Commerce and Industry late last year by the country’s Higher School of Economics. Experts at the school found that non-store sales (of which online sales represent around half) in Russia could become a 793 billion ruble (roughly 26 million U.S.) over the next few years, more the double the 394 billion ruble (13 million U.S.) the industry managed in 2010.

Those numbers might seem small by North American standards, but they’re only one part of the picture. Russia is also Europe’s leading internet market as measured by numbers of users, as GigaOM’s Bobbie Johnson noted in an article on the acquisition earlier today. The Sapato buy means that OZON will be better-positioned to appeal to that growing user base, and therefore better able to monetize that online presence.

The localization of business strategies that are doing well in the West for Eastern markets is a growing trend in technology, and not just in online retail. Mobile app developer SHAPE Services announced a new $10 million round of funding from Russian investment firm Finam on Monday to help the company create a special, localized version of its plus.im web messenger service targeted specifically at the “fast growing Russian market.” Finam’s previous investments include Begun, a Russian context advertising service, as well as Mamba, the largest Russian-language internet dating site.

Localization is also a key ingredient for success in the emerging Asian market. A study by ABI Research emphasized the importance of tailoring products specifically to regional audiences in terms of helping app developers sell their products to Asian mobile device users in 2012, and Forrester said in a study in 2011 that localization is also the key to success for online travel businesses.

Increasingly, startups that help existing businesses, retailers and content providers bring their products to new and emerging internet-connected markets and consumers will be in demand – and key strategic targets for investment and acquisition.