Alexey Kharko is a founder of Betta Company and Betta-Service Company, leading entities in the professional cleaning and hygiene market in Ukraine. Alexey Kharko tells us about the peculiarities and main distinctions of the global and domestic cleaning and hygiene market, and also about the difficulties, potential and value of the industry, as well as the art of doing business in Ukraine.
According to expert ratings, cleanliness and hygiene is one of the most promising areas of the Ukrainian economy. The industry shows significant turnover, it creates potential for additional employment, helps to keep blue-collar jobs in demand, and also represents an attractive draw for foreign investment”. Alexey Kharko
Alexey, please explain your choice to enter the industry of cleanliness and hygiene and tell us about the early steps on your career in this sphere?
It was on-the-spot decision to start this business. I am a very active and impulsive by nature, I am always open to everything new, innovative and interesting. For me it was a very interesting field, which was underestimated in our country. However, traveling a lot around the world, I realized that there was huge potential in it. It was a challenge, because in the nineties if somebody wanted to work in the market, it was not enough to make only investments but the most important issue was to break stereotypes which took root and relapsed in Ukraine since the Soviet period. Equally crucial was the fact that this business is beneficial to others since cleanliness and hygiene are of vital importance for us all. Moreover, it involved both B2C and B2B markets, we started to supply Tork products to the end users of the B2B segment. It is well known that Tork is a leading global hygiene and health company that develops, produces and sells Personal Care, Consumer Tissue and Professional Hygiene products and solutions.
What do you mean by cleaning? What sense do you put into the word “cleaning”?
First we still tend to clarify that we work in the field of cleanliness and hygiene, because cleaning is just one of the segments where we distribute our products. If we are talking about cleaning in a broad sense, then we should follow the global standards which are obligatory in the whole world. We should also mention complexity, because cleaning and hygiene are very broad concepts and we are faced with them in all spheres of life even when we do not think about it or do not pay attention to it. Following the standards carefully and systematically we ensure the quality of the final product and in the result for the end user. Among other things cleaning never stands still! Cleaning is constantly growing and developing on a worldwide basis. It is a very innovative industry; world leaders always offer us new products. It seems to be a grand rhetoric but all these cleaning innovations make our life cleaner, reduce costs and make the process of cleaning much easier. We study all these new products and bring them to Ukraine which, as well as the main goals involved with cleaning and hygiene, we get another mission which is to train, to form the right attitude and culture and of course to break stereotypes. Have you ever thought what the average person identifies the word “cleaning” with? For most of our people cleaning is still just wooden mop, ragged cloth, metal buckets, household soup and chlorine, the most famous disinfectant in the Soviet Union. But we live in 21st century where the cleaning and hygiene industry and science keep their feet firmly planted on the cutting edge of innovation. Moreover, here, in Ukraine, we do not even need to “reinvent the wheel”. Everything has already been developed and invented and proved its efficiency. That’s why today, dare I say it, we are creating, the whole market and segments. Because Betta-Service Company supplies products not only to cleaning segment, but also industrial, healthcare, HoReCa, where the issues of cleaning and hygiene should be intrinsically part of the DNA of
What is cleanliness for you? Is it of a great importance in your life?
Cleanliness is not just cleaning but it is a philosophy, lifestyle, the style of doing business. It is also our health, our attitude towards our employees, visitors, guests and customers. Cleanliness is a corporate image and one of the main advantages of any business. Let’s pay attention to various ratings and polls all over the world, which are conducted by companies representing healthcare, HoReCa, etc. Cleanliness and tidiness are touchstones of the choice and the desire of people to visit and come back again to any lifestyle facilities and public places. It is not the target and it is not even the trend, it should be set as a top priority for every business. If it is clean and fresh in a hotel or restaurant, there are comfortable dispensers filled with high-quality consumables in the building, and guests recognize it as respect and mutual trust of owners and visitors. That’s why, alongside with expensive furniture, modern and creative designs, the concept of cleanliness is crucial. Because it is a face, image, an important index facility profile. In addition, the implementation of the latest chemistry and up-to-date equipment, make it possible not just to clean and make life more convenient, but to significantly assist operators with easy cleaning, which reduces costs, extends the lifetime of floors, interior parts, etc., and therefore increases facility investment potential. These are the key principles and differentiation strategy which form the basis of our team and sends a message to potential customers by means of our common values and vision, stating that it is necessary to keep up with the times, take care of ourselves and others, and create our image with the help of cleanliness.
Let’s talk about Betta Company and Betta-Service Company, leading suppliers of cleaning and hygiene products in Ukraine. Please tell us how these companies were set up?
Betta Company is a foremother of our business. The company was set up in 1997 as a distributor of household chemicals for the B2C market. The first products that we distributed were “Reckitt-Benckiser” (ТМ Vanish, Calgon, Calgonit, Сillit). Then the products range was broadened to include paper tissues from SCA Hygiene Products (Zewa, Tena, Libero, Libresse). After that we started to sell TM Vileda. Later we added to our products line ТМ Durex, Contex from”Reckitt-Benckiser”. Recently we started with TM Scholl. 2006 became a significant year for “Betta”, because we developed our own brand of household products that was “Good Gospodarochka”. At the moment, the products of “our irreplaceable helper” are almost it all the retail chains, supermarkets, drogerie stores and DIY networks in Ukraine.
The history of Betta-Service Company began in 2005, when an independent company was formed on the basis of Professional Hygienic Products Department of Betta Company. In 2005 the Agreements were signed with SCA Company, which supplied us range of Tork products, and Werner & Merz, the manufacturer of Tana professional cleaning products. From that moment a rapid development of the company started. In 2005 the first subsidiary was opened in Dnepropetrovsk, and in 2008 we opened two more subsidiaries in Kharkiv and Sevastopol. Then we soared to new heights and enforced new cities, our range of products was significantly broaden by Vileda Professional, Jofel, Kimberly-Clark Professional, 3М, Ecolab, Diversey, Filmop, Unger, Taski. Betta-Service has its own products range that is Clean and Clever TM. Nowadays Betta-Service offers wide range of products: paper tissues, liquid soap, toilet paper, professional cleaning equipment, professional cleaning chemicals and cleaning tools. However, we supply not only products to our customers, but also provide them with a whole range of services: from consulting regarding the most optimal products, supplying the products, to their further ongoing service.
You have mentioned that your company produces its own brands. Why did you decide to launch your products range?
It was also a challenge, because specific issues of manufacture business differ greatly from distribution. Some people think that it is more difficult to manufacture your own trademarks because of specific peculiarities. For me, to distribute products is more difficult than produce them. In 2006 Betta launched Dobraya Gospodarochka TM and in 2017 Betta-Service launched Clean and Clever brand. The product range of these two brands is very similar but the products do not compete with each other because Dobraya Gospodarochka is for household usage, this range of products are sold almost in every supermarket and Clean and Clever is developed for professional usage in B2B market. It is my belief that sooner or later our own range of products was meant to be developed and launched and we did it.
What regions do you sell your products in?
Our target market is B2B and B2C. We sell our products to all regions in Ukraine. Our subsidiaries are in such cities as: Kharkov, Odessa, Poltava, Lutsk, Lvov, Chernovtsy, Uzhgorod, Ivano-Frankovsk, Rovno, Dnepr, Nikolayev, Krivoy Rog, Zaporozhe, and Mariupol. Thanks to our efficient logistics our products are supplied to large and small cities. Taking into consideration that we have customers in every region, we have the strongest regional coverage and the widest presence in almost every corner and town of our country. Of course, we are not going to stop now because we always have perspectives for growth and unlimited opportunities for improvement.
As we know, “Betta-Service” is the part of Inpacs international network. Can you share with our readers the details of this cooperation?
We are a part of a big Inpacs family. Inpacs is a corporation offering a unique Global Supply Solution through close cooperation of manufacturers and distributors and a full range of cleaning and hygiene supplies. All strong and respectable companies, distributors, suppliers, developers are already members of this corporation, our company included. We have a lot of benefits and opportunities there: communication, tracking of trends and joint sourcing opportunities. Inpacs consolidates huge amounts of information from around the world. All members have access to it. At Interclean 2018 in Amsterdam Inpacs demonstrated Orbita Dashboard, it is a new application which combines Business Intelligence and Big Data technologies in a single platform. It was shortlisted for the INNOVATION AWARD. Furthermore, we constantly attend global cleaning trade shows, where we have a splendid opportunity to visit a number of internal, very interesting and useful events, especially at the Interclean trade show.
You were one of the pioneers implementing dispensers for paper towels and liquid soap in the toilets in Ukraine. Please, share your impressions. How hard was it at that time to come out with a radically new product and assure people in its effectiveness?
All these changes are difficult to inact in our countries. As I said above, to implement any new product you should prove its effectiveness, profits and benefits, and the most important thing that you should do before all those mentioned above is to break stereotypes, constantly break stereotypes, again and again till you get results. But, as the experience has shown, everything is good in its season. While acquainting everyone with new products, we developed a new sales approach and promotion program, having divided the market into regions. Thus, we have provided the regions with dispensers as quickly as possible. Just fancy that, the dispensers became a part of a lifestyle in our country and we are already ready to offer our customers to supply our products according dispensing policies, that is, if the customer needs regular supplies of consumables, and the volume of supplies is huge, we are ready to provide customers with dispensers on a rental basis.
Except dispensers, Betta-Service is the first company in Ukraine which synchronized Consumer business to the standard B2B sales model with cold calls, etc. We implemented market segmentation; on the basis of this segmentation we developed the corresponding logistic approaches. In short, we took a chance and were right. Now this approach is more like a business classic.
Betta-Service stands to its goal and brings a comprehensive approach to our cleaning industry and it was the first company which implemented a disinfection system for toilet seats in Ukraine. Almost all CIS countries continue to use toilet covers, and you managed to convince companies in the benefits of using liquid disinfectant! Where has this idea been implemented and when did it happen?
We travel a lot around the world. It can be a tourist trip or business trips to various cleaning and hygiene industry events. We communicate with the manufacturers of different cleaning products. In 2011, we saw a liquid disinfectant-gel in the toilets of Tegel airport in Berlin, the unique feature of this gel is that you should not use paper covers on toilet seats. A little later in Amsterdam at the profile trade show we saw an excellent presentation of this product, we saw this gel in action. By that time, in Europe it was already a trend to use gel instead of paper covers for toilet seats. Everything was already in our hands, because we understood that for the Ukrainian market this is a much needed and useful product, especially for high traffic areas. It was important to present such a product innovation for a very significant facility in Ukraine, a place with a high traffic, where cleanliness and hygiene are also essential part of the image. For this purpose, there is no better place than Boryspol Airport in Ukraine. In 2016 we made a demonstration for the Boryspol airport administration, they liked the idea, but it was not implemented. One more attempt was in 2017, but failed again. And only in 2018 we got it. Meanwhile, the airports of Dubai, Tegel have been using this product for many years. This solution has already proven its cost efficiency and ecological friendless. Recent researches show that this product is perfect not only for public places but also for healthcare segment: hospitals, clinics, health centres etc. However, we need more than one year to implement this product in the Ukrainian market. Although we have been using this solution in our office toilets from the very first day when we brought it to Ukraine.
You have been mentioned a lot of innovative products which you brought to Ukraine and successful experience of their usage in Ukrainian market. It must be necessary to provide regular and comprehensive training on their correct usage?
We constantly conduct training for our staff. It is obligatory for all our employees, not only sales managers, to visit training. We provide our staff with thorough professional development through regular training schedules for career enhancement and trade improvement, developing an employee incentive and grading programme. Training is a key to increasing sales, we train not only our staff, but also our customers: we tell, we show, we explain and demonstrate how products work in practice, we give our customers opportunity to test products on different surfaces and soils and try out ideas. We are certain that there is nothing like a successful use experience, and it is the only thing which can convince a customer to buy.
Alexey, you often visit various specialized trade shows. What foreign practices do you adopt in your business?
The industry market is global, dynamic and active. Definitely it is very useful for everybody to visit specialized trade shows in order to keep up with the times, to become aware of innovative products and the latest industry news. Interclean trade show is justly considered to be a leading global biannual cleaning and hygiene event which is held in Amsterdam. It is a breathtaking vision! All cleaning professionals consider it to be a must-attend event. The developers now and then surprise us with their innovations. Every time we visit the show we bring a lot of ideas, we get the juices flowing, we fill with positive emotions, and we do our best to meet commitments and implement an agreement asap. Moreover, it is a place for meeting with friends, because a lot of our partners became our friends. We often visit each other. It is a bad practice to concentrate on local trade shows and local markets within Ukraine only. It does not work. At the show besides new products you can notice that your partners became stronger, and you have a splendid opportunity to negotiate with new suppliers. Once at the show we became acquainted with the Unger system for cleaning windows, facades and shop windows, we held negotiations and now the Unger system is successfully distributed in Ukraine. It is a completely new technological solution for window cleaning with a great benefit that is affordability. The system could be successfully used either by a professional cleaner or by end-users. The Unger system doesn’t need any special permission, it allows performance of an effective window, facade, and shop window cleaning procedure up to a height of 20 meters from the ground. It is really cool, is it not? Shouldn’t Ukraine be able to allow use of such technologies? Shouldn’t we aspire to reach such a technological level and teach our customers too?
What do you think is the difference between Ukrainian and European cleaning industry? Who can influence this transformation and what can be done now for further industry improvement?
Unfortunately, the difference is still quite significant and it is not in our favor. In Europe the level of technologies and their implementation, mass use etc. is enormously higher. It is perfectly clear to everyone that we are still poorer than Europeans in financial terms; European per capita income is also higher, so they can afford more technological products. This applies for both end users and B2B segment. In Europe cost ratio of facility maintenance is also higher than in Ukraine. Besides, they are confident of the difference between savings and cost effectiveness. Unfortunately, we used to substitute these terms. Therefore, not many products can be supplied to Ukraine for one major reason that is price; there will be no demand for a product due to its cost. Due to the culture of consumption and natural features there are some product peculiarities. For example, in Spain cellulose products are used more often. In the Swiss and German markets recyclable materials are of a high quality. From the other hand our market is very dynamic, that’s why we have to be on the upswing because we can use the products which have been developed and successfully implemented for many years in Europe. Our company is on a par with the latest European companies: we have approximately the same sales schemes, product range and logistics. I am afraid that the only thing our country is lacking in is money supply and culture. Herein we also have something to work on and have been working on it successfully for a long time, we train and acculturate our customers and end-users, thereby undertaking our mission.
As we can see Betta-Service Company made a great contribution to the improvement of cleaning industry in Ukraine. 2018 was marked by a new disinfectant for toilet bowls. What projects are you going to launch in the near future? What are plans for the future?
We are going to hold several events aimed at cultivation of the hygiene culture in our country. It is important to start doing this straight from school, and even earlier. It will definitely be social projects and, of course, we understand that it takes time to implement all the projects and obtain results. Our desire and efforts are not enough to get immediate result. Such initiatives require the direct involvement of government authorities.
We have a splendid opportunity to support the National Museum of Art. I am deeply convinced that being a person of culture is a real happiness, and supporting culture and cultural projects is even greater happiness.
Who is your inspiration and motivator?
Of course, my family is. My family and my children are my love, my power, my base. My friends often help me to look at some ideas or problems from another side, they can support or criticize me, I am very grateful to them for this. The beautiful world of art always inspires me. In many ways, I compare the industry of cleanliness and hygiene with art, when masterpieces are being created step by step. My team motivates me. When I look at their shining eyes, when they share their ideas, I feel their charge for success, I can’t afford to lose steam, because success is our common goal, we have a clear mission shared by each member of our big and friendly team. I am inspired by our customers, because for them and with them we become stronger and bigger. In the end, the result that we have already achieved and our future plans are my great motivation.
You make picturesque photos; you can catch a good shot. Tell us about your hobby?
I like reading, not business, but fiction. I like history. I like to study the history of Kiev. I like fine art. My first education was in the State Art Secondary School named after Taras Shevchenko. Probably, this is all about when hobby goes into education, if you spend all your childhood in museums and art school you and your lifestyle become an integral and essential part of all this! A lot of my classmates are famous artists now. There was also a period in my life when I was absorbed by photos. While on a trip I was keen on making beautiful pictures “without Photoshop”. Perhaps, my perfectionism was originated from all mentioned above; it is my keen eye that allows seeing prospects, to understand what is the best way and decision.
Please, give advice to those who want to develop and improve business in cleaning industry. What is your success formula?
It is a complicated business, and in many instances it is unpredictable business which requires a lot of love and skill. If you have all this, then you are on the right path to success. Next thing you should always follow is to demand a lot from yourself first of all, you should not be afraid of obstacles and not be lazy, you should constantly keep on learning, training and improving. I have already said that our business is very dynamic. That’s why you should never stop if you want to succeed, you should always keep up with the times and hold all the aces. You should not be afraid of bold decisions, non-standard ideas. Do not be afraid to think outside the box. It is also very important to play a fair game, give a square deal and apply technology. Do not be afraid to make mistakes! There will be mistakes, but they should not be an obstacle, you should consider mistakes as feedback. You should always analyze, research and study. And then we can move to a new, completely different level of process organization. The point to remember is that the habit is the man himself. Therefore, it is necessary to get used to well-doing, kindness and useful things. It is unbelievable encouragement.