2018 was the year e-commerce in Russia took off – there’s never been a more lucrative time to launch your brand’s online shop. Here’s how to delight your customers and become an online sensation.
In 2018, Russian e-commerce hit the big time.
What do we mean?
- 81% of Russians searched for products online (up 18%).
- 82% visited an online retail store (up 15%).
- 58% actually bought something (up 12%).
- Consumers spent an average of $215 across the year (up 11%).
In short: Russians are searching for and buying more products online than ever before. This trend will only continue – the e-commerce market is set to triple in the next five years.
So no more excuses: now is the time to invest in e-commerce in Russia.
Good news for international brands: Russians love foreign products. In fact, 49% prefer them over domestic goods.
Russia’s import tariff system favours international companies too. You won’t be taxed for small parcels you send to Russian individuals from abroad. Conversely, Russian companies are taxed heavily for their imports, driving up domestic prices.
As if that weren’t enough, it’s getting easier for global brands to sell in Russia. AilExpress – Alibaba’s international e-commerce site – was already the most visited online store in Russia. But in 2018, Alibaba launched a joint venture with Mail.ru to tighten its grip on the market. If you’ve already set up shop in China, you’ll be familiar with AliExpress. But if the Chinese market’s still on your to-do list, check out our tips for e-commerce success here.
In 2018, Yandex – Russia’s leading search engine – also released two new e-commerce platforms. One of them, Bringly, is specifically designed for cross-border shopping. It makes it easy for Russian customers to buy products from the UK and elsewhere. So don’t forget to incorporate this platform into your e-commerce strategy.
It’s worth bearing in mind that Russian consumers are unlikely to use price aggregators to discover products. If they can’t find what they want in one store, they’ll look at other known stores before resorting to a search engine. So take the time to build your brand in Russia – it will pay off.
E-commerce in Russia may look pretty straightforward for international brands. But that doesn’t mean you can afford not to localize and personalize your content.
Russia has one of the lowest English proficiency levels in Europe, so you should localize your website and e-commerce store into Russian. This has not been a strength for international brands in the past. A 2016 study showed only 19 luxury fashion brands had a Russian website – Prada and Gucci simply redirect you to their global English site. Investing in localization would give you a competitive advantage over these brands.
This is surprising given the importance Russians place on personal service in their own language. Russian consumer trust is low, so they want to speak to sellers on the phone or via web chat. It’s why brick-and-mortar stores are still more popular than online shops. To combat this, you’ll need a fully localized comms programme – from first impression to post-sales support.
It’s not all about appealing to the ‘Russian’ consumer, though. Russia is the largest country in the world – it’s a long way from Moscow to Vladivostock. Moscow and Saint Petersburg account for the lion’s share of the population, but don’t forget about rural regions. They have less access to physical stores, which makes online shopping increasingly appealing – especially as infrastructure improves.
DO YOU TAKE CASH?
Here’s the elephant in the room: selling in Russia is logistically tricky.
It’s why cross-border commerce levels are still so low. It can take 15–30 days for an order to arrive in Moscow – the wait times for more remote regions are so long as to put many consumers off.
As a result, you’ll need to carefully plan your delivery methods before launch. You also need a good understanding of local restrictions and customs processes to avoid certain regions rejecting your products.
It’s not all bad news though. Russian infrastructure is improving, and there are more and more delivery options available. This will continue as rural e-commerce demand grows.
The other hurdle you need to overcome is delivery. Only 20% of Russians have a credit card. Cybersecurity and legal concerns mean trust is very low. That’s why an overwhelming majority of Russians prefer to pay cash on delivery, so retailers now offer try-before-you-buy options on the doorstep. Customers are free to put the item back on the truck if they don’t want to pay. To compete, you’ll need to offer this too.
That being said, online payments are on the rise. In 2018, only 18% paid online, rising to 40% in 2019. This is partially due to the growth of services like Yandex.Money, Visa QiWi Wallet and WebMoney. They offer physical terminals as well as online systems to help improve security.
Although m-commerce is still in its infancy in Russia, it’s growing up fast. 23% of Russian consumers bought something on their mobile in 2018. In 2019, it was 32%. Expect this figure to keep growing as Russians become more comfortable with online payments. Stay ahead of the competition by optimizing your site for mobile and tablet now.
This is the beginning of the e-commerce age in Russia. Imagine being able to go back to the mid-noughties and the start of the Amazon-led e-commerce boom in the West. For international brands, that’s the current situation in Russia. With the right site and tools in place, e-commerce in Russia could be your brand’s next big step to global growth.
Need a hand preparing your e-commerce site for launch? Get in touch – we’d love to help.
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