Heavy Regulation Won’t Stop Russia’s B2B E-Commerce Growth

Russia’s business-to-consumer e-commerce industry yields more than $8 billion a year, but economists are now focusing on the strengthening presence of B2B online buying in the nation.

In a new article posted on The Moscow Times by Jennifer Trelewicz, the Chief Technical Strategy Officer of Moscow-based e-market platform B2B-Center, the state of B2B e-commerce in Russia is far beyond where it was when the industry first emerged in the early 2000s.

Today, the research shows that 68 percent of Russian corporations are using electronic trading platforms for procurement purposes. According to data from B2B-Center, online corporate and government purchases ballooned by 40 percent in the first nine months of 2014 compared with the same period of time in 2013.

The majority of this business, Trelewicz said, sprouted from construction goods and services, with more than one-fifth of all purchases made in 2014 falling into this category. Trailing close behind was the procurement of machinery and specialized products for the mining and oil-field industries, making up 18.6 percent of all online B2B purchases seen on B2B-Center.

As B2B online shopping increases in Russia, Trelewicz noted that the industry has become tightly regulated. Transactions made through B2B e-commerce platforms are legally binding due to the large financial value of these purchases. Procurement procedures, especially for state-run entities, face strict legal requirements, a fact Trelewicz says prevents “spontaneity” within the B2B e-commerce industry.

Still, experts report that Russian B2B online commerce is evolving as a more innovative industry, following its B2C peers to mobile devices for both procurement and payment management purposes. B2B-Center released its mobile app three months ago, and the company said it has already signed up more than 5,000 users.