Russia is a multi-ethnic country with a total population of about 146.7 million (as of 2619). Due to the underdeveloped light industry in Russia, many residents rely heavily on imports for daily necessities. Therefore, for Chinese sellers, with the development of mobile Internet, Russia’s e-commerce market has great development prospects, and its consumer market mainly has the following characteristics.
(1) High Internet penetration rate and large market scale
Due to the rapid development of mobile Internet technology, Russia’s Internet access level and penetration rate are high, the scale of Internet transactions is large, and the market is highly active. According to statistics, Russia’s Internet penetration rate remained at 70.4% in 2016 and reached 80% in 2017. According to statistics from the Russian Association of E-commerce Enterprises (AKIT), the transaction volume of Russia’s e-commerce market has steadily increased by 15% to 20% each year. In 2018, the transaction volume of Russia’s e-commerce market reached 1.66 trillion rubles (about US$25.5 billion).
(2) Social media participation exceeds the global average
Russians frequently use Russian social media websites and international websites such as Yandex, VK.com, Google, and YouTube. The three famous Russian social networking sites are VK.com, Ok.ru, and mail.ru, with registered customers reaching 140 million (as of September 2012), 205 million (as of January 2013), and 400 million (as of December 2013), respectively. More than half of Russian netizens follow their favorite brands or retailers on social media. Therefore, this tendency to use social media cannot be ignored. Social media is a good way for e-commerce companies to reach customers.
(3) Russian is the official language and the overall education level is high
Russia has more than 130 languages due to its large number of ethnic groups, but Russian is the official language. More than 80% of Russians speak Russian, and very few people can speak English, less than 8% of the total population. More than half of Russians are not used to shopping on foreign websites. They hope that shopping websites can provide Russian or translated versions. In addition, Russia is a country with a high level of education. People are highly educated and have a greater demand for home appliances and daily necessities. As the level of urbanization in rural areas of Russia gradually increases, the corresponding consumption level will also increase.
(4) Unbalanced regional development of e-commerce market
The regional development of Russia’s e-commerce market is quite unbalanced. About 50% of online shopping is concentrated in Moscow (31.1%), Moscow Oblast (7.5%), St. Petersburg and Leningrad Oblast (11.3%), where the per capita income of residents is high and the logistics infrastructure is well-developed. About 15% of the Russian population lives in these areas. According to the forecast of Morgan Stanley experts, Internet sales in Moscow and St. Petersburg will have a significant increase, and the average growth rate in other regions will reach 55%.
However, e-commerce is highly competitive in major cities such as Moscow and St. Petersburg. Although AliExpress entered the Russian market early and gained a significant market share, the rise of Russian e-commerce companies has made it more competitive with cross-border e-commerce. In addition, Russia’s “economic protectionism” is very serious, which will pose a certain threat to my country’s cross-border e-commerce platforms.
(5) Payment and logistics are the two biggest difficulties in the development of Russian e-commerce.
It should be noted that Russians still prefer cash on delivery, which is very different from the United States and many European countries.
(6) High requirements for products.
According to Nielson research, the Russian e-commerce consumer market tends to buy convenient products, focusing on categories such as clothing, shoes, accessories, and household appliances. Young customers pay more attention to novelty and product quality, while middle-aged customers pay more attention to brands. According to Yandex Marketing’s research, more than half of Russian online shoppers have returned products, and many customers also said that if the products they received do not match the description on the website, they no longer trust the store and will not buy from the store again.