Lehepunkt, the leading press distributor in Estonia, has been part of Rautakirja already five years. The company takes care of the logistics of 1,400 points of sale and is the most important importer of foreign magazines in Estonian market. Lehepunkt has a 90% market share and its product range includes over 900 titles.
In addition to logistics of magazines and newspapers for points of sale, Lehepunkt's some 80 employees take care of the consumer subscriptions and their delivery to post offices. Lehepunkt's regional offices are located in Tallinn, Tarto, Pärnu, and Jũhvi. Estonia has been divided into six regions, three of which are in Tallinn. Each region has its own sale representative who takes care of 200 to 300 points of sale.
Foreign Magazines have a 10% Share
Lehepunkt cooperates tightly with Finnish Lehtipiste. A large amount of foreign magazines are delivered to Estonia through Finland. In addition, SanomaWSOY's European network has turned valuable for Lehepunkt: Lehepunkt has made direct agreements with publishers abroad and a part of foreign magazines are already distributed directly to Estonia. This way tabloids reach the Estonian market some two days earlier than through Finland.
- The demand for English and German magazines and newspapers is quite small. In recent years, the trend has been increasing and at the moment the share of foreign magazines is some 10%. Estonia has only a population of some one million which is one fifth if that on Finland. The Russian magazines are coming to Estonia through Rautakirja's Latvian press distribution company, Preses Serviss. In addition, some Russian magazines are published in Estonia, explains Erki Tevet, Manager, Logistics in Lehepunkt.
Magazine Sorting is Manual Work
- Technology will be a challenge for Lehepunkt in the near future. Magazine sorting and supplement adding are done manually so far. Personnel expenses have been smaller than investment for the machinery, and the quality of handiwork is also better even though human mistakes sometimes happen, says Tevet. - I believe that we will start sorting with machines by 2007, he continues. The transport of magazines was outsourced a few years ago to gain cost efficiency.
The ICT-systems in Lehepunkt are at least as good as they are in Finland - or even better. Lehepunkt built its own ICT system already a few years ago, and the same system is now in use also in Preses Serviss in Latvia. The system has been continuously developed and it is one of the core strengths of Lehepunkt.
Future Challenges
Traditionally in Estonia, the magazines have been bought from kiosks. Other kinds of points of sale have now emerged in supermarkets and department stores. In addition, according to new law, the kiosks have to be immovable buildings, which has diminished their number with dozens.
The market leader needs to be careful and continuously looking out for new challenges: at the moment Lehepunkt is developing a warehouse hotel for bookstores, publishers, and book printers. Lehepunkt's Sales Director Allan Liima also willingly presents the map of Estonia located in the meeting room, which easily shows Lehepunkt's points of sale and the districts that are next under the scope.
- Lehepunkt has grown really fast so far. Now it would be time to develop new business models. Lehepunkt continuously seeks for new and new type of partners through which the amount of magazine sold can be increased. There has been some discussion with garden product suppliers, for example. Stockmann department store in Tallinn already has magazines in their children department, Liima says.
Lehepunkt has just started concept developing with each separate chain. The concept handbooks made in the process define the responsibilities of both parties as well as the output and campaigns. In Estonia, the publishers take care of marketing of magazines, but Lehepunkt offers the frames.
Text: Anu Sauramaa