Russia’s ecommerce market continued to grow at double-digit rates in 2016, even as offline retail was severely affected by the economic crisis.
These are the findings of a report published by East-West Digital News (EWDN), an international news and research agency covering technology across Eastern Europe. Online sales in 2016 exceeded USD 26 billion, growing more than 20% year-on-year, the source indicates. The cross-border segment is the fastest growing, up 26% by value and 80% by number of parcels and small packages, and exceeded USD 4 billion for physical goods alone. This growth has been driven in large part by Chinese companies – most notably Alibaba’s B2C marketplace Aliexpress.ru – but key western players including Amazon, Asos, Next and Yoox are also in the game.
A separate report on ecommerce warehousing and fulfilment, with participation from EY experts, provides a full set of market data, interviews and case studies with key Russian and international retail companies. Due to the crisis, the real-estate infrastructure that companies need to serve Russian consumers has become dramatically cheaper and more accessible. International and local retailers are taking advantage of these opportunities to launch huge projects to build, expand or upgrade warehousing and fulfilment facilities across the country. Even though half of ecommerce companies now have their own infrastructure, demand still exceeds supply on the fulfilment services market. However, while service performance of many providers leaves to be desired, delivery conditions across the world’s largest country have improved considerably over the past years, with the delivery service industry now entering a phase of consolidation.
• In 2016, the domestic online retail market exceeded USD 22 billion (including USD 12 billion for physical goods and USD 10 billon for online travel), growing by more than 20% year-on-year despite the crisis. Some western-funded companies (like KupiVip, Lamoda, and Ozon) recorded impressive growth in 2016, while others (Oktogo and Wikimart) are on the verge of bankruptcy.
• The cross-border ecommerce market is growing even faster (+26% in value, +80% in number of parcels and small packages), exceeding USD 4 billion for physical goods only. Since 2014, this growth has been driven essentially by Chinese companies, first and foremost Alibaba’s B2C marketplace Aliexpress.ru. Key western players, however, are also in the game (e.g. Amazon, Asos, Next, Yoox)
• Since 2014, due to the crisis, the real-estate infrastructure has become dramatically cheaper and more accessible. Leveraging these opportunities, key players in the retail industry are engaged in huge projects to build, expand or upgrade their warehousing and fulfilment facilities.
• Even though half of ecommerce companies have their own infrastructure, demand still exceeds offer on the fulfilment service market. In spite of improvements over the past years, the service performance of many providers leaves to be desired.
• Delivery conditions across this huge country have improved considerably over the past years. The delivery service industry is entering a phase of consolidation with a series of mergers and acquisitions over the past months. The most recent one, in January 2017, was the acquisition of SPSR Express by DPD, a property of France’s GeoPost.
The EWDN reports have been researched and written in collaboration with experts from EY, international ecommerce companies and their service providers.
The Russia ecommerce report can be downloaded here: http://www.ewdn.com/e-commerce/insights.pdf