X5 found a source of discounts. Retailer wants to compete with factoring

X5 Retail Group is trying to start competing with factoring companies. The network intends to launch a mechanism for early settlement with suppliers in exchange for a discount. Its size will be calculated individually. Profile players will have to reconsider rates for their services if most of the retailer's partners start using its service, experts warn.

X5 Retail Group (Pyaterochka, Perekrestok and Karusel networks) intends to launch a financial service that allows suppliers to receive earlier payment for a certain commission than is stipulated by the contract. The source told about it. According to him, in the first two months after the start of the project, the retailer's commission will depend on the number of days of early repayment at the rate of about 8% per annum. It may be revised in the future. The supplier can receive an accelerated settlement on the next day or on the first payment day after the transaction. X5 declined to comment.

According to the law on trade, chains must pay manufacturers and suppliers for shipped food products no later than 8–40 calendar days from the date of delivery of the product and depending on its shelf life. Before this period, the retailer, as a rule, does not pay, explains Pavel Shishov, head of the factoring directorate of large corporate business at Alfa-Bank.

The trading company sets up its payment system in such a way that payment arrives strictly on the last day of the delay, Mr. Shishov clarifies.

If the supplier wants to receive funds before the deadline specified by law, he can use the services of a counterparty - a factoring company. Factoring is operational short-term financing of companies against the assignment of their receivables (future payments by a third party for the supply of goods). In terms of the number of active clients of the factoring market, trade is the leader: it accounts for 44% of the total number of active clients on the market - now there are 6.8 thousand of them, follows from the report of the Association of Factoring Companies (AFC). According to Mr. Shishov, up to 20% of purchases from the FMCG network can go through factoring. Anton Musatov, General Director of VTB Factoring, believes that about a third of the suppliers of retail chains can use factoring.

X5 uses a dynamic discounting mechanism, which is a widespread phenomenon on the market, says Innokenty Volovik, managing director of PSB for factoring. But factoring companies are unlikely to revise their terms of work with suppliers of FMCG networks, Dmitry Shevchenko, executive director of AFK, is sure: “The X5 project is not an alternative financial instrument. It's just a discount."

In fact, we are talking about the receipt of earlier payment by suppliers in exchange for a discount on goods, Mikhail Doronkin, managing director of the NKR rating agency, agrees.

However, the factoring market will still have to react to the appearance of such a service from retail. The first and obvious response of factoring market participants will be to reduce rates below 8% if a large number of suppliers switch to this form of payment, Mr. Shishov believes.

Such a service can be used by suppliers for whom the turnover of funds is more important than maximizing profits, says Alexey Popovichev, Executive Director of Rusbrand. Suppliers of consumer goods, the deferral of payments for which are not regulated by the state, will be more interested in the service, Dmitry Vostrikov, executive director of Rusprodsoyuz, believes. In fact, X5 lends to its suppliers at a rate that no bank can offer them, adds Marat Ibragimov, a senior analyst at Gazprombank.

Roskachestvo: 4 trends in consumption after the pandemic

But not all retailers are ready to follow the X5 path. Azbuka Vkusa reported that if a supplier attracts loans at a rate of less than 8% per annum, then he does not need such a service. Lenta added that they make settlements with suppliers in accordance with the law on trade. Magnit and Globus did not provide comments.