Building The Foundation For The Future: Yango Tech Founder And CEO Max Avtukhov "In the long run, we want to become an industry standard of technologies for all retail, a technological powerhouse for retail."
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Max Avtukhov has a clear goal in mind for his Dubai-headquartered enterprise, Yango Tech: to build a software titan for grocers that will become a standard of practice in the e-commerce sector. "It's a software-as-a-service (SaaS) for ventures looking to build a successful e-grocery business," Avtukhov explains. "In the long run, we want to become an industry standard of technologies for all retail, a technological powerhouse for retail."
Having set up the headquarters of Yango Tech in the UAE in 2022, Avtukhov is thus making use of a ferocious work ethic to take his fledging business to such an incredible point. "I'm always on the plane, because, during the first couple of years, an organization requires a lot of hustle, a lot of energy, you need to try and fail at a lot of things, you need to be relentless and energetic," Avtukhov explains in a Zoom call out of his Dubai office. "After certain years, it's actually becoming more prudent to stabilize, to introduce bureaucracy, to make it less chaotic and so on. We're in the first part of this first stage where we need to expand our activities, to try and sell more solutions in order to understand which path to achieving our goal of becoming an industry standard, of becoming this new Oracle of the world, is the most profitable."
With a a bachelor's degree in economics from the Moscow State University, Avtukhov spent the first few years of his career in the banking sector, working on mergers and acquisitions (M&A) and corporate finance activities across Europe, Asia, and the Middle East, before stints at some of Europe's technology giants. "That is why today my company has a first-hand experience of creating and running an e-grocery business, we have both expertise and technologies to help other retailers to succeed," Avtukhov says. "We know better sometimes than people who, for instance, produce technologies in a vacuum, and then try to apply them in business without ever having an actual experience of running an e-commerce business. My goal is to promote the highest possible industry standard that we require for and from ourselves, first and foremost."
Avtukhov adds that while Yango Tech's first solution (products and services for grocery enablement) respond to the question of "why I am not selling enough", its second solution (products and services to digitize offline retailers) try to solve the "why am I not earning enough margin" puzzle. As for offline retailers, Avtukhov says that Yango Tech offers a diverse range of services that enables brick-and-mortar stores to achieve the same personalization and convenience for consumers that they encounter online. "For the sake of an example, by installing cameras with computer vision technology, we create a digital trace of each product, and we can say, 'Okay, guys, you don't have these diapers. Put them on the shelf. Otherwise, you will be losing sales.' Then, if there is a grocery chain, it usually struggles to manage planograms, or how the products are placed on the shelves. If you misplace something, you will lose money. So, we ensure planogram compliance. And the third example can be about merchandising where, for example, a supplier pays a retailer a certain amount of marketing money to increase their weight on the shelves. They are having a promotion, and so they spend money to check on you, to audit you, to see if you are actually in compliance with the margin agreement with them. We improve their offline operations here, which brings a couple of percentage points to the bottom line."
At present, Yango Tech is operating in the UAE, KSA, Turkey, Uzbekistan, and Kyrgyzstan, has established partnerships in India; Avtukhov adds the company is seeking to launch its operations in Azerbaijan and Armenia as well. In Avtukhov's experience, the Middle Eastern markets, and especially the UAE, are very open to innovation. "I believe that the UAE is one of the best markets globally now in terms of gross domestic product (GDP) growth, in terms of geopolitical positioning and many other aspects, such as young population and high level of income," he says. "Those who achieve quality and speed and connect with the younger generation will solidify the bigger market share in future."
Meanwhile, the markets in India and Asia Pacific, Avtukhov continues, are all in the process of transitioning from the traditional unorganized retail to the organized retail. "Sometimes they even leapfrog to modern retail and its digital and omni-channel experiences," he says. "We observe 100 retail chains in India that are rather small, like 10 to 100 stores, and that serve a rather affluent population with an emphasis on freshness, and so on. They struggle to get online. It seems that because they are not big enough to produce something of their own, they are not good enough to get premium listings on aggregators, and so, they are in limbo with deliveries made through WhatsApp, through telephone. But they are very eager, basically hungry, and this is what actually drives the market conversion from the traditional to the digital retail."
In all markets, Avtukhov continues, there is a growing interest in computer vision technology among retail businesses, and that has unlocked the significant growth of Yango Tech's offerings. "Retailers in all markets that we observed have already allocated budgets to try to solve those inefficiencies in brick-and-mortar stores for years, but only now has the business case for it started to work for all, because, firstly, you have this improvement on shelf availability in the planograms, and secondly, the cost of actual hardware of these cameras has become low. Those guys have finally got the solution, and it's not expensive because of manufacturing."
Yango Tech currently employs around 100 full time professionals, majority of whom are engineers, who are based in the UAE, Eastern Europe, across the Commonwealth of Independent States (CIS), and India. In terms of its business development, the company is focused on enterprise customers (medium to big corporations), and that requires Avtukhov to reach and gain trust of C-level decision makers. "That's actually my key headache, because I was previously building a B2C business, where your customer is an end customer, and you can hear from them very quickly," he says. "But here, it's much more subtle. It requires a lot of effort to get to those people. That's why we like conferences, participating in panel discussions, because it gives us airtime with these decision-makers to talk to them, to hear from them about their challenges in business."
Looking ahead to 2024, Avtukhov aims to maintain the company's commitment to rapid growth, as well as the inclusion of new offerings. "For example, we now sell e-grocery enablement as an enterprise solution," he says. "It is quite heavy like a spaceship, I would say. But by the end of next year, we will be able to sell it by modules. You sell one piece, another piece, a third piece, and this will increase the addressable market, and reduce barriers to entry drastically. This will bring us tens of thousands of potential customers. This is, again, for the next year, and the year after next. Now, we're building the foundation for the future."