In this post, I will give a summary of ecommerce in Russia. I’ll also provide suggestions for foreign ecommerce businesses to market in the Russian sector.
Ecommerce in Russia
First, ecommerce is relatively new and is growing quickly. Roughly 70 percent of Russian consumers — 102 million individuals — access the net. But only 46 million of them regularly buy goods online, representing a compelling opportunity for growth.
Over half of Russian online shoppers are age 25-34 and reside, collectively, in Moscow (46 percent) and in St. Petersburg (11 percent). Fifty-one percentage of online shoppers are female.
The most popular product types on the internet are apparel, makeup, and compact appliances.
Foreign ecommerce sales into Russia grew by 37 percent in 2016 compared to 2015. Fifty-one percent of cross-border earnings are from China. Twenty-four percent are from Europe and 12 percent are from the U.S. Sixty-four percent of Russian consumers spend less than $26 for an arrangement. Just 21 percent spend around $60 for the purchase. Delivery charges, normally, cost another $21.
China-made imports are usually the least expensive. But Russian consumers are ready to purchase from higher-quality European and U.S stores if the price is agreeable.
User experience. Russia-based ecommerce sites frequently have a bad user experience. Complaints from online consumers are continuous, and growing. Most online shops in Russia are difficult to use. Reactive design is rare for Russian online vendors. Load speed is a massive issue.
Personal information security concerns Russian consumers. Seventy percent of Russian consumers prefer payment on delivery, according to Nielsen, the research company. Forty-seven percent of customers will pay on delivery using a debit card.
Most online shopping in Russia is from desktop computers. But a Data Insight survey in Russia found that 27 percent of respondents could make purchases using mobile devices if the shop were mobile friendly. Mobile shopping and mobile payments will inevitably grow with the younger generation. In actuality, a smartphone is the key internet shopping apparatus for Russian customers under 25 years old.
Shipping is debilitating for Russian shoppers. It may be long, costly, and unsafe. And even if the package reaches its destination intact, it could be different from what was ordered.
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Nevertheless, delivery constraints from leading international retailers don’t stop Russian consumers from purchasing from foreign brands. It has created a market, in actuality, for Russian entrepreneurs who buy goods in different countries on buyers‘ behalf and deliver to them in Russia. The approach is simple. The shipping provider has a lengthy list of supported online shops and malls. The buyer selects a product to purchase, creates an account at delivery supplier’s system, completes the purchase info, and pays for it electronically. The proprietors of those services welcome new foreign online shops.
Taxes and responsibilities. Foreign merchants that sell less than $1,000 a month, for products that collectively weigh less than 31 kilograms a month, don’t have to pay obligations for deliveries. That allowance is going down to $500 in 2018 and to $200 in 2019. Deliveries over that limit will get a subject to 30 percent obligation.
Soon, major foreign marketplaces working in Russia — such as Amazon, eBay, and AliExpress — will have to pay 18 percent VAT for those purchases made by Russian customers. Those marketplaces will presumably include this VAT to subtotal cost, making those products more expensive for Russian customers. But products bought on the marketplaces, with the 18 percent VAT, will have expedited crossing into Russian, meaning quicker and safer.
Language. EF English Proficiency Index attempts to rank countries by their English-language skills. It reports that approximately 52 percent of Russians understand English. But growth to the Russian economy demands localization. Consumers in Russia (and other countries) are naturally utilized to shopping in their language, using their local currency. Russian consumers are more inclined to buy from a new if they are able to understand promotions and utilize filters without translating.
How to begin selling in Russia
- Sell favorite categories, such as apparel, makeup, small electronics, or gadgets.
- Don’t accept returned products from Russia. Clients must agree with the no-returns coverage prior to buying.
- Try selling gifts or handmade items. The typical 2017 Christmas holiday budget to get a Russian consumer figures to $250. Chocolates, perfumes, and makeup are the best gift choices.
- Offer high-end or premium goods. Luxury boutiques are rather popular with affluent Russians.
- Offer quality. Though Russians are utilised to budget constraints, they nonetheless value quality and positive buying experience.
- Target big cities. Citizens in Moscow and St. Petersburg invest twice more shopping online than other areas.
- Utilize social channels. This is the quickest way in Russia to build brand and reach customers.
- Consider payment-on-delivery. It’s the most popular payment method.
Marketplaces are a fantastic means to achieve Russian consumers. Popular marketplaces include:
- Amazon. The simplest approach. Russian customers are already there.
- eBay. Not as popular as Amazon, but could still produce sales.
- Yandex.Market. Yandex is the biggest search engine in Russian.
- Avito. The Russian Craigslist. Everyone can join and market.
- Ozon. The Russian Amazon. It is the national market of everything.
- Litres. The dominant electronic bookseller; a national leader. Self-publishing is supported.