The Russian eCommerce market is about to explode, so any marketer should prepare to invest in this sector now. Read on for the current market situation and essential tips for those looking to launch their eCommerce presence in Russia.
Retail eCommerce sales in Russia were worth $15.7 billion in 2015, and are expected to top $17 billion in 2017 (source: RBTH).
A large portion of that spend is towards overseas brands. Global brands have more experience and stronger infrastructure than their Russian counterparts to better serve the Russian community. As a result, Russian consumers are flocking to them.
Russia’s import tariff system also currently favors international eCommerce companies. Small parcels coming into the country for private individuals are not eligible for tax, whereas company imports are subject to heavy fees, which drive up prices. Russian shoppers can take advantage of the wide range of tax-free products.
Russian consumers are also unlikely to use price aggregators to discover products. If a product is unavailable in one store, they’ll look at other known stores rather than use a search engine, so developing a strong reputation will more likely help you win secondary business (source: Deloitte).
FOUR TIPS FOR RUSSIAN ECOMMERCE SUCCESS
1. Be Personal
In terms of Russian consumer behavior, Russians like to feel that they are receiving personalized service from a brand. It’s important to be able to interact with customers over the phone or via web chat, but more importantly, be able to do that in Russian. Brick-and-mortar stores are still more popular than online shops in Russia due to the perception of getting better customer service in person. So it’s important that you have a strong, Russian consumer communications and post-sales support program in place.
It’s also crucial to offer Russian-language websites. The vast majority of Russians do not speak English, so a Russian site is essential.
2. Get Payment and Delivery Right
80-95% of eCommerce payments in Russia are made in cash on delivery. This has allowed some retailers to offer try-before-you-buy options (source: eCommerce worldwide), which increases return rates since customers can freely return items if they don’t want to pay. Furthermore, Russians are suspicious of online payments and cyber-security and thus prefer to use hard cash, particularly those over 35.
Despite low trust, online payments are on the rise. Services such as Yandex.Money, Visa QiWi Wallet and WebMoney are growing in popularity and have worked to improve security. The trend is most prominent among younger consumers, but as acceptance grows, the convenience of online payments will likely become the dominant force.
Russian expectations for delivery times are relatively lenient – international shipments are expected to take between seven and ten days to arrive, and customers in more remote locations expect delivery to take longer (source: WebCertain). When shipping into Russia, though, it’s important to understand local restrictions and customs processes to see if any regions will refuse certain goods.
3. Don’t Forget Other Regions
Russia is the largest country in the world with a variety of worthwhile markets other than Moscow to target.
There are multiple cities with populations of over half a million people outside cosmopolitan, western Russia. If you prepare your infrastructure to reach those regions, you’ll benefit from a much wider customer base. This is especially true as eCommerce growth reaches areas with restricted access to high-end, brick-and-mortar stores.
4. Prepare for Mobile
MCommerce is just starting in Russia but has shown significant growth recently. Mobile internet usage in the country is high (80% in 2016 – source: eMarketer), while mCommerce accounts for only 22% of the eCommerce market.
However, Russia is next-in-line to join the shift towards mCommerce. You should make sure your sites are optimized for mobile and tablet browsing as a key part of your strategy.
We’re currently witnessing the beginning of the Russian eCommerce age. With the right site and tools in place, there’s a real opportunity to build a successful campaign as more consumers turn to online marketplaces and cross-border shipping.