By East-West Digital News
East-West Digital News has released a 316-page research study on the Russian online retail market – one of the fastest growing but least known (and most misunderstood) on the planet.
The research – in which PwC in Russia and the Moscow Higher School of Economics, among others, took part – is based on interviews with 80 Russian and international market players, from eBay and DHL to local retailers Ozon.ru and KupiVip.ru.
For the first time, international audiences are provided with reliable and precise data on this market, which amounted to just $10.5 billion last year, but could reach some $50 billion before the end of the decade.
The report also explores the regional e-commerce scene – now nearing the tipping point in a market thus far dominated by Moscow and St. Petersburg.
The report includes a full set of data regarding investments in Russian e-commerce companies, in partnership with Fast Lane Ventures, with an analysis of venture investment trends, startup financial aspects, and exit issues, based on exchanges with leading Russian and foreign VCs.
“Yet our report is, above all, a practical guide,” says Chief editor Adrien Henni. “A large part of it is dedicated to analysis of and concrete advice for each of the key issues defining the industry – from marketing to payments, from fulfillment to legal requirements and on to little known HR challenges.”
“With already 60 million unique Internet users, Russia will become one of the largest online retail markets in Europe,” says Damian Doberstein, who co-founded the Russian branch of global venture fund E-Ventures. “Combined with still weak consumer involvement in e-commerce, this creates huge growth potential for online retailers. In Russia today, only 30% of online users shop online, compared to 97% in Germany. Another ‘pro’ is that competition on the Russian e-commerce scene is relatively low compared to China and Brazil, not to mention Western countries.”
“Infrastructure, from broadband, to electronic payments, to logistics, improves slowly, bringing significant improvements in operating conditions year after year. But for foreigners to succeed in Russian e-commerce, a strong knowledge of local specifics is required,” notes Vardan Gasparyan, senior consultant in supply chain management at PwC in Russia.
A special chapter is dedicated to cross border sales – a particularly opaque area – with exclusive data from PayPal and the Russian Post, as well as practical advice for players operating from abroad on how to organize sales to Russia.
E-Ventures, Fast Lane Ventures, Intel Capital, Mangrove Capital Partners, the Russian Venture Company (RVC) and other leading Russian and international venture funds took an active part in the research.