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X5 and Santens to create pharma marketplace

June 19, 2019. TAG: Retail Trade

X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: "FIVE"), announces a partnership involving X5 subsidiary OMNI, Perekrestok Online and Santens Service Group. The parties have agreed to join forces in an effort to develop a pharmaceutical marketplace based on the Perekrestok.ru online store.

As part of the project, a special section of Perekrestok.ru will be devoted to products from pharmaceuticals producers: apteka.perekrestok.ru. This will benefit customers, who will gain the ability to order medicines directly from manufacturers. Orders can be paid for and collected at pharmacy pick-up points in X5 retail stores. X5 OMNI, which is developing the Company's technology platform for parcel delivery, has already made arrangements to open 1,400 pharmacy pick-up points at X5 stores. Santens will handle the supply chain logistics to ensure delivery to pick-up points.

Andrey Osipov, Santens Logistics Group CEO, said: "Under the agreement, we will provide an extended range of services to pharmaceuticals producers, including potentially full supply chain management, while using X5's extensive retail network to make medicines more affordable for consumers and improve their quality of life. Our partnership seeks to facilitate consumer access to medicines and reduce treatment costs by introducing a fundamentally new supply chain model for delivering pharmaceuticals from manufacturers to patients."

Leonid Dovladbegyan, Director for Strategy and E-commerce Development at Perekrestok supermarkets said: "For us, the partnership with Santens is a strategic move given the role that Perekrestok.ru plays in our efforts to expand the range of products available to our customers. The share of online shopping in the pharmacy segment is rising, and our customers are increasingly looking for specific medicines. We are interested in having the product range offered by Russia's leading pharmaceuticals operator in our online store, without having to invest in logistics infrastructure: Santens will be responsible for processing, assembling, sorting and delivering orders to pharmacy pick-up points at X5 retail stores."

Igor Pletnev, Director for Strategic Business Development at X5 Retail Group, said: "This partnership agreement is an important milestone in the development of X5 OMNI's technology platform for parcel delivery. By teaming up with Santens we are adding a new category, medicines, to our product mix. Essentially, Perekrestok.ru is providing a ground-breaking service to partners by enabling direct access to end consumers and providing an opportunity to bypass the existing supply chain dominated by intermediaries and lacking efficiency and transparency."​

X5 Retail Group

X5 Retail Group is the leading multi-format food retailer in Russia. X5 shares are listed on the London Stock Echange (LSE) and Moscow Exchange in the form of Global Depositary Receipts under the ticker "FIVE". The Company operates several retail formats, including the chain of conveniently located proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand.