Russia’s e-commerce market is growing at a rapid pace, and is indicative of a major shift in how Russians are purchasing products. “Domestic e-commerce expenditure hit 498 billion rubles (US$8.6 billion) in the first half of this year, a 22 percent increase year-on-year”, Russian Post and the Association of Internet Trade Companies (AITC) said in a joint statement on Tuesday.
AITC expects the market to exceed 1.1 trillion rubles (US$19.1 billion) by the end of 2017, while cross-border e-commerce trade increased 34 percent in the first half of 2017 year-on-year to 178 billion rubles (US$3 billion), meaning the share of cross-border tax free trade grew 35.7 percent in the first half of the year. Russian Post’s share of this accounted for 67.5 percent of the country’s online market in the first half of the year. “If cross-border trade keeps those growth rates it will squeeze out Russia’s online sales of small appliances and apparel within a couple of years,” AITC CEO Alexey Fedorov said in response to the results.
The local online sales of appliances and electronic devices added 11 percent in the reporting period to 98.9 billion rubles (US$1.7 billion), the AITC said. The biggest share of foreign goods ordered by Russian customers arrive from China – 90 percent, followed by the EU (4 percent), the US (2 percent). In financial terms, China accounts for 52 percent, the EU for 23 percent, and the US 12 percent.
“There is huge value in Russian online purchases from EU based portals”, says Chris Devonshire-Ellis of Dezan Shira & Associates. “Russians purchased just 4 percent of their online goods from the EU, but the financial value amounted to 23 percent of the total Russian expenditure. EU based businesses should be getting Russian sensibilities such as Cyrillic onto their websites. Their products are among the most valuable purchased by Russians”.
A useful guide to Russian online behavorial patterns and what attracts Russian buyers can be found here, or you may contact Dezan Shira & Associates at email@example.com for professional and practical assistance.
Russia Briefing is written and produced by Dezan Shira & Associates. The firm provides Russian and international businesses and governments with strategic, legal, tax and operational advisory services to SMEs and MNCs investing throughout Russia and Asia. We maintain 28 offices across China, India and the ASEAN nations as well as St. Petersburg and Moscow. Please contact the firm at firstname.lastname@example.org visit our Russia Desk or visit our practice at www.dezshira.com
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