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Timeonline CEO (Russia) interview

Alex Vydrin

Timeonline internet center CEO (Moscow) says about cybercafe market situation

1. Please, introduce youself.
Guy A. Eames Internet Salon TimeOnline CEO.

2. What volume of the Internet - cafe market today? Do you think the investments in Internet - cafe is perspective, meaning growth of number of the users of Internet in Russia?

Internet in Russia is growing much faster than in the West and still has a lot of catching up to do until it reaches the same "saturation" point. All over Russia there is a great demand for internet access, particularly "public Access" - where people don't need to buy a computer but just walk in from the street and use a computer connected to the Internet. We only operate one place (tk Ohotny Ryad with 200 computers open 24 hrs) but experience around 2000 visitors a day.

I feel there are hundreds of thousands of future internet users - people who don't yet understand the benefits the internet offers. We offer free courses to "open people's eyes" to the advantages. In Germany for example, the fastest growing group of users is pensioners - people who aren't very mobile, have plenty of time and are interested in the world around themselves.
Public access is affordable to a large section of the population, many of whom couldn't buy a computer. This explains its growth - this year several new companies have entered the Moscow market. Outside Moscow the market is open and real "Internet" cafes (as opposed to gaming
clubs) are virtually non-existant.
I predict fast growth in this market over the next 10 years across the whole of the country.

3. How fast the investments paying back?

Depends on cost of space, where the cafe is located, economies of scale & experience in the business.
The ideal scenario could produce a 2-3 year payback. As this industry (here we are talking about large-scale cafes) is only 2 years old in Russia, experience is rare and valuable.

When we entered the market we proved that many of our theories indeed were correct. Since that time however many of the costs have come down, so we paid a relatively high price for being first. As the market develops, the opportunities for cross-selling increases, reducing the pay-back period.

4. It is favourable to whom to invest in Internet - cafe - provisional portrait
the investor.

Players on the real-estate market, telecom operators & companies who aim for whatever reason to establish long-term retail networks across the country aimed at young people, young professionals & tourists. Its a fun, fast growing & relatively stable business. At present we are talking to a number of established companies who are interested in using our expertise to set up more salons in Moscow and across the country.  




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