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f+h Intralogistics 3/2016

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f+h Intralogistics 3/2016

E-commerce market growth

E-commerce market growth in Russia billion rubles 544 713 760 850 Despite the currency crisis, the e-commerce market in Russia is constantly growing. The volume of cross-border trade in Q1, 2016, grew more than twice compared with 2013 2014 2015 2016 the same period in 2015. In 2016 Russian buyers will spend 37% more via foreign online stores than in the past. GLOBAL BUSINESS A ccording to AKIT, the association of e-commerce companies, online sales volumes in Russia by the end of 2016 will grow by 15% up to 850 billion rubles. Among the main market drivers behind the growth of internet commerce is the increase in internet users and their competence, and the reduction of mobile internet costs. The key factors limiting growth are the negative economic situation and the decline of purchasing power. According to experts, the potential for the Russian e-commerce market is enormous. The online segment currently makes up a modest 4% of all domestic retail, which can be compared to 12% in the UK. The Russian online market is therefore not yet saturated, and the biggest players have not entered. All the same, the demand for foreign online stores is high. According to the results of Q1, 2016, Russian buyers spent about 70 billion rubles in foreign online stores, which is 106% more than for the same period in 2015. According to AKIT, cross-border trade volumes may grow by 37% in 2016 reaching 300 billion rubles. The number of inbound international shipments of goods in Q1 reached f+h Distribution 3/2016

48 million items, which is 182% higher than a year earlier. By comparison, the volume of orders in the Russian online shops during the same period grew by only 3%. About 95% of all shipments received in Russia from foreign online shops are delivered by “Russian Post”, the country’s national postal service. It is expected that the total number of parcels and small packages of goods will reach about 230 million items in 2016. The low volumes of cross-border e-commerce in Q1 2015 are connected with the weakening of the ruble at the end of 2014 which caused instant price increases, while the prices of Russian retailers grew gradually due to the stocks formed based on the “old r a t e s ”. Positive forecasts The majority of money spent by Russian buyers in foreign online shops was on small appliances and electronics, clothes and shoes. The average cost of a parcel of goods in Q1 2015 was 1,400 rubles (about 20 Euros). For the year this figure dropped by 32%. This fall has less to do with the economic crisis, but more with the growing popularity of cross-border trade and the increase in the proportion of small and cheap products in the total volume of international shipments. More than half of Russian online shop buyers live in Moscow (46%) and St Petersburg (11%). The other regions account for 43% of the parcels. The three leaders among the most popular internet retailers in Russia are AliExpress, Ozon and eBay. The Chinese site has become a total leader, attracting on average 23.8 million unique visitors per month and approximately 3.6 million per day. The Russian site Ozon showed more modest results in this regard, with average monthly unique visitors amounting to 9.2 million people, and 800 thousand daily. EBay has fewer per month at 7.4 million, but more per day on average at 1 million people. Speaking about the prospects of e-commerce, analysts note that the market in 2016 will continue its growth, and serious competition in this sphere is already starting to appear in the regions. Companies which will actively develop, establishing their presence in the regions and adopting new technologies and services, whilst optimizing costs, will have a guaranteed growth of 15 to 18% per year. Better market opportunity with a local online store When entering the Russian e-commerce market, foreign companies must take into account various factors such as product certification, customs regulations and the requirements of Russian legislation to protect the rights of consumers, as well as many other legal and tax aspects. In addition, it should be taken into account that all personal data must be stored in the territory of the Russian Federation in accordance with Federal law N152-FZ on the localization of personal data, which entered into force in 2015. If you want to use the full potential of the growing e-commerce market in Russia, we advise you to make a choice not in favor of a distributor, but in favor of your own online shop with its warehouse and the office. You will get the following advantages: About Schneider Group The Schneider Group provides its international clients the back office services they need to expand their business into or within Russia, Kazakhstan, Belarus, Ukraine, Poland and Germany. The services include market entry support, accounting outsourcing, tax consulting, import, ERP systems and support in legal matters with a focus on migration, labor and corporate law. The company employs 500 experts and is part of LEA (Leading Edge Alliance), the second largest international association focused on accounting, financial and business advisory services. n Your own online shop without your competitors‘ products n Individual consultation for your final customer via a hot line service n Direct contact with the client and the opportunity to develop customized marketing strategies n 100% regular import process in accordance with legislation With regard to the companies working on a “cross-border” basis (direct deliveries from abroad to the end users in Russia), there are a number of disadvantages compared to having a local presence. These include the cost for courier services as well as limited possibility to return the goods and long delivery. Besides, contact with clients is limited and there is no possibility to develop individual marketing strategies. Restrictions also concern payment systems since only credit cards are accepted, and in Russia the terms of payment by cash is an important factor. In addition, the exemption of customs duties for purchases valued under 1,000 euros will be abolished in the near future. If you intend to enter the market without the registration of a legal entity, but you want to take advantage of all the potential benefits, it is possible to use the services of an agent. Thus, you will save the costs and the agent will take care of your orders via your own online shop, the warehousing, the delivery and transportation of goods, as well as the payment system management. Despite the current market situation, the e-commerce market in Russia is growing steadily and offers great potential to foreign manufacturers and retailers, and the potential risks can be minimized by entering the market with the assistance of an agent. Photographs: Fotolia Processing: VFV, Sonja Schirmer f+h Distribution 3/2016


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