Report: Amazon Opens Office In Russia

Online commerce giant Amazon is continuing to increase its global footprint, according to a recent Forbes report, starting their first venture in Russia.

According to the Forbes article (in Russian), the first Russian division is believed to have already opened, with Arkady Vitrouk having a prominent role with leading the operations. Vitrouk was previously the general director at ABC-Atticus, the publishing group under Alexander Mamut. Amazon has not acknowledged the opening or appointment of Vitrouk as head of the office, but Forbes reports that Vitrouk is participating with leadership consultations. TechCrunch claims to have verified Vitrouk’s status as director of Kindle content for Russia via his LinkedIn account.

It has been reported that Amazon is looking to hire three positions for the Kindle business and local content in Russia, namely senior product manager for Kindle content pricing, principal for content acquisition for Kindle Russia and a content acquisition manager.

Currently, Russian consumers are able to access Amazon products, but can only order from the US or UK sites. Moreover, they are only offered a limited selection of products including only books, audio and video items.

Russia has the largest Internet market in Europe, the eighth-largest economy in the world and has shown an increasing growth in the eCommerce sector. According to Euromonitor, Russians spend 60 percent of their pre-tax income on shopping: the largest such percentage on the continent. 

That being said, Amazon will face its fair share of challenges in Russia as well. According to Pay Boutique, just one in eight Russians used a plastic card for online payments as of 2011, and retail payments accounted for just 10 percent of all card transactions that year. And despite possible benefits of opening an office in Russia, the lack of an established delivery infrastructure and low credit card use across the nation could also prove to be difficult obstacles for Amazon.

Ozon is a Russia-based business that provides similar services as Amazon, and has been forced to design a system to overcome these logistical issues. Ozon created their own delivery truck system, and accepts cash-on-delivery from customers. Ozon customers are also able to return the item at the time of delivery if they are unsatisfied with the product. Amazon in Russia may need to develop similar solutions in order to overcome the country’s differences in culture.

The Russian Amazon website is redirecting browsers to the European website which also include links to other European country sites. Confirmation of the office opening remains unclear, however Forbes has reported that Amazon has submitted patent applications in Russia for book publishing, electronic texts, media files, and storage and delivery of goods.

To read the full story at Forbes click here, or to read the story at Tech Crunch click here.