ECommerce In Russia: A Big Opportunity

By Chanel Smith (@PYMNTS_EMEA)

ECommerce in Russia is blossoming, yet the market is still struggling to gain support from international investors who harbor a poor perception of Russia.

By 2012 Russia took the lead and housed the largest online population in all of Europe, and now its eCommerce market is estimated to reach over £23.7 billion by 2015, reported eCommerce Facts. But investors remain dubious, since the Russian eCommerce market is troubled by logistic challenges with payments infrastructure, as well as a long history of poor consumer confidence when it comes to online payments.

However, after Russia’s was added to the World Trade Organization, the number of online retailers has increased and more consumers have been open to purchasing online. And, contrary to several other eCommerce investment targets, Russia can offer its own online ecosystem. For example, Yandex.ru—a Russian search engine site that owns its own online payments system—is vastly preferred over Google by consumers looking to access Russian eCommerce sites.

PYMNTS.com breaks down an infographic provided by eCommerce Facts, which highlights other key opportunities for international investors looking to explore eCommerce in Russia.

The Opportunity

At present, the study shows there are 61.4 million Internet users in Russia, which is predicted to increase to nearly 80 million by 2014. These figures indicate that the majority (51 percent) of Russia’s population is using the Internet. Furthermore, 23 percent are using mobile technology to access the Internet, and eCommerce is not limited to only big cities.

Who Is Shopping Online?

According to eCommerceFacts, the most avid online shoppers in Russia are generally females aged 30 to 39 years old and the average age of the online consumer is 44. The report also shows the average shopper is part of a household with an income less than RUB 30k. The average online purchase amounts to RUB 3,200 per transaction.

Russians spend the most money on electronics and books when shopping online. The infographic also notes that online food shopping is not popular in Russia.

The Role Of Social Media In Russian eCommerce

Social media is a budding trend in this region, and the study indicates such sites play a large role in the future growth of eCommerce. The infographic states that 34.5 million users in Russia will visit at least one social media site per month and the average consumer spends roughly 10.4 hours on social media per month. The social media site, VK.com, is the most popular, while other sites such as Facebook and Twitter are also common. According to eCommerceFacts, the eRetailers that have gained traction and success in Russia are also the companies that have a strong social presence.

The eCommerce Market

Russia’s eCommerce is still growing, but at a rapid pace that is expected to be worth almost £20 billion by next year. By 2015, the market is predicted to exceed £23 billion.

In 2011, overseas online purchases were worth $1 billion, and at present the study indicates that 6 percent of respondents said they have already purchased from overseas eCommerce sites. ECommerceFacts suggests that there is immense growth opportunity for foreign eRetailers in the future, as more consumers grow comfortable with online shopping.

The Importance Of Building Trust

In comparison to other international eCommerce markets, Russia has low consumer trust. In the past, online shoppers in Russia have complained of receiving fake, poor quality or used products. Other reports show that many consumers weren’t sent anything at all after making an online purchase.

Presently, cash on delivery is the most popular payment option amongst Russian consumers, while card payments are still mistrusted. However, consumers in larger cities are warming up since the report shows that this segment uses credit and debit payments more often. Additionally, other payment options—namely Money.Yandex and WebMoney—are also popular.

To read the full report, click here.

Or to view the infographic, look below.