E-commerce in Russia has seen an unprecedented growth within the past year, as the pandemic pushed more Russian companies to develop online sales. The increase in e-commerce market was more than 50% for 2020 – for comparison, for the US, Germany and the UK the same figure was, by estimation, 9%,13% and 16% accordingly.
In 2020 – 2024 Russian e-commerce market development is predicted to keep its pace and have the biggest growth among other countries with fast emerging economies, such as Brazil, India and China. In this article we try to explain why this forecast seems realistic and what trends are noticeable on Russian e-commerce market already now.
E-commerce potential in Russia
One of the reasons to believe Russian e-commerce market will see an even further growth in the next few years is the market’s huge potential.
Here are some key figures from 2020:
- 81% of population in Russia have Internet access (118 mln people)
- 93,7% have at least once paid online for services or products
- 33,5 trillion RUB (≈370 billion EUR) is the annual turnover in retail in Russia (offline and online)
- e-commerce share of retail is only 2,7 trillion RUB
These figures show that Russia has a big customer audience familiar with internet purchases and willing to spend money. However, before the pandemic years Russian businesses preferred to invest into offline development, so e-commerce sector was rather weak. The lockdown has sped up the shift to digital platforms and development of logistics channels, increasing e-commerce share in retail from 5% in 2018 to almost 9% in 2020. By 2025 e-commerce share is predicted to constitute 25% of all retail.
At the same time, Russian consumers turn to making online shopping part of their routine, rather than a one-time big event. It is confirmed by increased amount of orders in online shops (78% increase) with lower average order value (14% decrease). More than half of consumers pay online for their orders, with bank cards and online banks being preferred methods of payment.
In this way, the image of online shopping is shifting from being something complicated and unknown to a hassle-free routine. Improved logistics and consumers’ changing habits create more favourable conditions on Russian e-commerce market for new players, but at the same time, make the environment more competitive and demanding.
E-commerce websites in Russia
E-commerce websites in Russia can be divided into two main categories: marketplaces and companies’ own online stores. Both types have grown significantly within the past year.
9 of 14 SMEs in Russia have increased their investment into e-commerce during the pandemic. Also, the share of companies present on e-commerce market has increased up to 76% in FMCG sector. This has led to the fact that some product categories, which used to be bought offline mostly, have experienced a big raise in online sales, as they became easier to shop for online. The most notable one is groceries, with almost 250% growth.
Top e-commerce product categories (by income share) in Russia in 2020
- Electronics (30%)
- Home and renovations (17%)
- Clothes (13%)
- Products for children (6%)
- Health (6%)
- Groceries (6%)
Marketplaces, such as ozon.ru, have also increased their income in 2020 more than twice (by 108%), having received 405 mln orders. It means that almost half (49%) of all orders on Russian e-commerce websites were placed on a marketplace. The increase, comparing to the amount of marketplace orders in 2019, is 57%.
Some of the factors, which have influenced the growth of marketplaces in Russia, could be their universal product range, continuous sales, free fast delivery and trusted delivery partners, plus their reputation and trustworthiness in the eyes of Russian consumers. The same factors are noted to drive the growth of e-commerce in Russia in general, too. This means that marketplaces are one of the solid trends in Russian e-commerce, and they will undoubtedly continue to develop and grow further.
Russian e-commerce and mobile apps
As businesses in Russia adapt to being present in digital environment, they also develop mobile-friendly websites and apps to respond to the growing share of mobile internet users. In 2020 35% of internet users accessed the web exclusively on mobile devices (+3% annual growth).
When making online purchases via mobile, the majority of people in Russia prefers mobile apps to mobile website versions – mobile apps are used twice as often as mobile websites. Whenever possible, Russian companies and marketplaces respond to this trend by developing and simplifying their online shopping apps.
Russian marketplaces, for example, save all the necessary information, such as payment and delivery details in the app, allowing for smoother and faster checkout. This results in the growth of mobile orders. Ozon.ru, one of the biggest marketplaces in Russia, reports that over 60% of their orders are coming via mobile.
Russian e-commerce trends: summary
This short overview proves that Russian e-commerce market continues to grow and develop. The noticeable trends, so far, are:
- Rapid growth with constant changes and new players
- Shift towards seeing online shopping as a routine chore
- Increased number of orders via mobile
- Increased interest towards marketplaces
- Importance of added value (wide product range, free and fast shipping, trusted payment servers, no hidden costs)
(Compare it with the last year’s overview here)
If you are interested in how your company can benefit from these trends, contact us. Flying Lynx helps international companies to start selling online to Russia via Russian e-commerce websites, such as Ozon marketplace. We have developed working models and logistics solutions for companies interested in reaching millions of new potential customers. Drop us a note, and we’ll tell you more.
Ozon.ru partner statistics
Article photo: Dylan Gillis/Unsplash