As a result of the invasion of Ukraine, Russia It is in the eye of the hurricane. Since last February 24, when this “special military operation” began, as the Russian president defined it, Vladimir Putinthe world has witnessed this offensive, bringing enormous consequences to the country, especially in the economy.
The expulsion of Russian banks from the SWIFT interbank telecommunications system, or the suspension of payment services on Russian territory of platforms such as Visa, MasterCard, PayPal, ApplePay, etc., or the cessation of operations in Russia of different giant brands such as Nike, , H&M, Mango, Cartier, Calvin Klein, , Apple and many more, are just some of the measures taken at the economic level after this armed conflict that has led more than a million Ukrainians to leave their country and has cost the lives of hundreds of people. A situation from which the eCommerce on Russian soil.
A huge country, with a population imbalance
With a GDP slightly higher than that of Spain, Russia represents the fifth largest economy in Europe (after , Germany, and Italy) and number 11 in the world. In 2014, the Russian economy suffered a recession from which it had been gradually recovering.
At the demographic level, Russia has the ninth largest population in the world with 145.9 million inhabitants, according to figures from the last census carried out in 2020. is projected a decline to 145.74 million by 2024 due to population aging and slowing population growth. The Russian population is predominantly female: 53% are women compared to 47% men.
Also, with regard to the territorial distribution of the Russian population, 24% are concentrated in Moscowwhile About 70% live in the western regions of this huge country. Barely 4% of the population lives in the “Far East” of Russia.
Of course, there is a big difference when it comes to Buyer behavior between urban and rural Russia. Consumers in Russia’s largest cities are more likely to shop online, and also more often. To highlight, Moscow, Saint Petersburg and their surrounding regions account for almost 46% of the Russian eCommerce market.
Millennials represent the largest online shopping demographic within Russia, with un 80% of monthly online shoppers. This practice has become increasingly popular in Russia, and it is precisely millennials with disposable income who have dedicated themselves to driving this consumption behavior in the country. In addition, this demographic group is responsible for changes in purchasing behavior, with more people turning to purchase products from their mobile devicesalso having traceable deliveries and a network of lockers and collection points.
Since the beginning of the invasion of Ukraine, the entire Russian economic sphere has suffered severe blows due to international sanctions (which had already been suffering blows due to the COVID-19 pandemic), which may represent a shock to a sector such as eCommerce, which has been growing steadily for four years. One of the main factors of this growth that Russian eCommerce had been carrying out was in part thanks to the great penetration of the internet in Russia: Around 94 million people have access to the Internet, plus there is remarkable access to affordable mobile devices.
According to November 2019 data, 92% of the Russian population aged 18-24 use the Internet on a daily basis. On the other hand, 83% of people between the ages of 25 and 39 use the Internet on a daily basis, while almost 60% of people between the ages of 40 and 54 also have daily access to the web.
A market of 27,500 million euros
According to if we remove online income from the tourism sector, Russia has the twelfth largest market in the world in terms of eCommercewith revenues of more than 27,500 million euros in 2021and a growth of 16% between 2020 and 2021.
In the table below you can also see the forecast made for its future growth, made before the invasion of Ukraine. After this event, it is very difficult to know how your market will evolve.
In this regard, in 2021, in the Russian eCommerce were Electronics (30%), Fashion (24%), Toys, Hobby and DIY (19%), Furniture and Appliances (14%) and finally, Food and Personal Care (13%). The e-commerce penetration rate was 46% in 2020, with a forecast of reaching 60% of the population by 2023.
Russian eCommerce (not counting cross-border sales) (although it reaches up to 18% in the largest cities).
The main reasons for buying online by Russians
There are different factors why consumers in Russia choose eCommerce platforms to make their purchases, which has motivated the growth of this sector in the country. The reasons Russian consumers give for shopping online range from getting better prices and save time (24%) and money (18%) up to the option being able to compare prices and products (35%).
Other options that influence the purchase intentions of Russians on eCommerce platforms include the free delivery (40%), the detailed description of the product (36%), the credit card payment options (19%) and the free returns (18%). These data were provided by Statista based on
Likewise, Russian consumers are characterized by being loyal to a brandwhich means that those retailers that prove to their customers that they are trustworthy and of good value will attract and retain those customers.
The eCommerces that sell the most in Russia
The most popular eCommerce in Russia are Wildberries, MVideo and DNS-Shop. On the whole, the three stores account for 45% of eCommerce revenue in Russia.
Breaking down the numbers of each of them, in 2021, wildberries.ru, is a gigantic marketplace founded in 2004 and considered “the Russian Amazon”, which obtained revenue from sales of more than 6,700 million euros in 2021while MVideo.ru, a Russian consumer electronics retail platform by revenue, recorded 4,110 million euros in revenue. For its part, DNS-Shop.ru, online store specializing in the sale of computers, electronics and household items as well as the manufacture of computer hardware (including laptops, tablets and smartphones), did the same receiving income from more than 1.8oo million euros.
Completing the Top 5 highest earning Russian eCommerce platforms is citilink.ru, which, in addition to an online store, sells technology in more than 1,000 establishments throughout Russia, with 1,479 million euros in revenue Y Ozon.ru, a multi-category marketplace born in 1998, with 1,075 million euros.
Amazon, for its part, does not have its own store in Russia, operating through its international portal amazon.com. Furthermore, in the context of the war with Ukraine, the company founded by
In the case of , it does have a .ru version of its marketplace, which has grown a lot in recent years. According to the figures of the that have generated a GMV close to 32,700 million euros.
The Russian government had outlined a strategy that sought to make eCommerce more popular among local consumers. This strategy was entrusted to both the Ministry of Finance and the Ministry of Communications to develop the legislative framework and, from there, to generate innovative logistics solutions to address this problem. But given these sanctions and the economic isolation that the world is applying to Russia, plus the economic collapse that this implies, it is unlikely that the numbers will be the same as in previous years.
The main logistics providers in Russia
Logistics companies in Russia have greatly contributed to the growth of this sector. DPD (which operates in Spain as ) has established itself as the leading logistics provider among Russian online stores. In accordance with a recent study, 31% of Russian online stores indicated that DPD was one of their logistics providers.
In addition, they also highlight Russian Post Y boxberry, which are among the top three shipping service companies that online retailers offer to their customers in Russia, with rates of 26% and 21% respectively.
In any case, the scope of eCommerce logistics in such a huge country, stretching from its border with Ukraine to Siberia, it’s really uneven. Urban areas have many more shipping options, and much faster than rural areas in the north and east of the country.
Photo: Depositphotos
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