7 reasons to target the Russian online market

LinkedIn Twitter Facebook
Russian-money-main-.jpg

The recent Online Retail Russia event in Moscow (16/17 April 2015) confirmed that, for UK retailers seeking cross-border trading opportunities, Russia presents an attractive option despite its economic and political troubles. For traders able to take a long-term strategic view, now may be an ideal time to enter the Russian market and make the most of Russians’ continuing love affair with British luxury and fashion goods, while competition is weak and costs are low.

 

IMRG’s chairman and founder James Roper is a regular participant at Online Retail Russia and was this year joined by David Williams, director of online, EMEA at www.deckers.com.

 

David said: "It’s clear that while there is still economic instability in the market, the eCommerce infrastructure and agencies, logistics and consumer interest is increasing, and if one is bold, there are opportunities to make inroads in the market during the current climate. It’s clear that Russians still love western brands and there is still an appetite for them, and eCommerce, if done well and locally, is an ideal way to drive sales in this fascinating and potentially huge market.”

 

A time of crisis

 

Russia is currently experiencing its third economic crisis in recent years. Russia’s trade turnover with the outside world plunged 30.1% year-on-year in the first two months of 2015 as oil price falls, currency devaluation and sanctions shook the Russian economy. Total imports plummeted $25.7bn, a fall of 37.6% compared to the same period last year, while exports plunged 23.8% to $57.6bn, according to data published by the Rosstat state statistics agency. Trade between Russia and the European Union fell by 34.3% to $38.2bn, with Britain among the hardest hit – its trade shrinking 51.9%.

 

Yet despite all this, here are seven reasons why the Russian online market may be an attractive option for UK retailers.

 

  1. It’s huge, and more accessible than you think

 

Russia is a large and rapidly growing eCommerce market – there are already more than 150,000 online shops in Russia, and 35,000 new stores are coming online each year.

 

Russia has a population of 143.5 million people and 73 million active internet users, half of whom currently buy online spending £13bn annually. Today only 3% of shopping is online, but this is forecast to at least triple by the end of 2020 with cross-border expected to reach 60% of the total volume of online sales. Russians all use one language – and are located right next to the EU border.

 

  1. Despite the problems, Russians continue to consume

 

Russians are still buying 2.5 million new cars every year, whereas the whole of Europe buys 12.5 million. They eat, shop for clothes, use make-up, decorate homes and buy smartphones to make calls and surf the web. Consumer habits and behaviors are changing – Russians compare prices, search for best offers and look for deals. They are learning to buy smarter – to be able to buy more – and they still love expensive brands.

 

  1. The online infrastructure is on a European level

 

Google (31% market share) and Yandex (60%) are the primary Russian search engines and both use similar search algorithms. They have PPC and CPA platforms, RTB and retargeting tools, local and global marketplaces and social media – all the tools you are used to in the UK.

 

  1. What is expensive for Russians, is cheap for Brits

 

Local Russian talent just got cheaper. Localisation, SEO, PPC management and web development services are available and are of the same quality you are used to, but at half the price. Costs are lower for you – but not for your Russian competitors.

 

  1. We’re all in the same boat

 

Local Russian manufacturing capacities are modest. Russians are already consuming products that have been produced abroad – consumer electronics, apparel, cosmetics, sports equipment to name just a few. Inevitably with the drop of the ruble, the products local retailers are selling are getting more expensive – fully in line with your offer and that of other foreign sellers.

 

  1. UK brands are being searched for

 

Russians want your goods. In January 2015 there were 11,521 Yandex search requests for Fred Perry, 3,664 for Paul Smith, 1,551 for Vivienne Westwood and 2,444 for Mulberry. Some brands are turbocharged with marketing campaigns, while some are just air-breathers – but opportunities abound.

 

  1. Crisis means opportunity

 

Local Russian competition is struggling. Sales volumes and margins are falling, advertising volumes are dropping and it is becoming increasingly difficult for Russian brands to afford advertising, new product launches or other investments. PPC and SEO prices have dropped even in ruble value as competition weakens. If Russia is appealing to you as a long-term prospect, there has never been a better or cheaper time to test the Russian waters.

 

Russia is a sleeping giant, and getting an early toehold now may prove determining for future success.

 


 

 

Article By James Roper, Chairman and Founder of IMRG

LinkedIn Twitter Facebook

Royal Mail Sponsor

Register today for unlimited article views, and unique insights

Register Now

How can online retailers earn trust in Belgium?

How can online retailers earn trust in Belgium?

Belgium’s online presence is growing year after year and with a growing healthy appetite for cross-border purchases, what should online retailers take into account if they are to enter Belgium’s eCommerce market?
Delivery preference of Dutch and Belgian online shoppers

Delivery preference of Dutch and Belgian online shoppers

Dutch and Belgian consumers are increasingly buying their goods online, but they differ in how they want those goods delivered. A savvy online retailer needs to localise its delivery options to meet these local requirements. But what are these delivery preferences?
What can UK retailers learn from the Amazon model?

What can UK retailers learn from the Amazon model?

Amazon’s reach is so pervasive that it’s overtaking Google to become the search engine of shopping. And it’s just as attractive for retailers as it is for customers, allowing brands to offer their products to the biggest audience in eCommerce, and offering attractive and easy fulfilment options. But what can UK retailers learn from the successful Amazon model?
The fundamentals of retail: Which European countries are leading the way?

The fundamentals of retail: Which European countries are leading the way?

From delivering on promise, to quickly resolving contact centre queries, to minimising the amount of returns, there are myriad aspects for retailers to get right when it comes to delivering a great customer experience. But which European countries are most successfully delivering on the fundamentals of retail?
Beyond Black Friday: Unmissable international events for 2017 eCommerce plans

Beyond Black Friday: Unmissable international events for 2017 eCommerce plans

In the US, the day after Thanksgiving has been a key focus for US shopping. Now, Black Friday is becoming the unofficial start to the Christmas shopping season in countries across the world. But there are hundreds of other events across the world to be aware of when developing an international strategy. Here are a few...
How UK retailers use localisation to succeed in Asia

How UK retailers use localisation to succeed in Asia

Expansion into Asia can be a natural next step for a successful business and with UK brands such as Burberry, The Body Shop and Lush having all had huge international success, what can we learn from these brands?
Why international e-tailers should re-visit the top of the funnel

Why international e-tailers should re-visit the top of the funnel

The role of brand awareness is increasingly critical to international expansion and with various platforms offering better reach and targeting than ever before, why is it important for international retailers to revisit the top of the funnel to help create a more compelling picture?
‘Your Global Consumer Isn’t Who You Think She Is’ - An Interview with Kai Li from Revolve Clothing

‘Your Global Consumer Isn’t Who You Think She Is’ - An Interview with Kai Li from Revolve Clothing

Kai Li, Vice President of International for Revolve Clothing, took part in an insightful Q&A session and shared his approach to expanding businesses into new Countries and why identifying his business’s value proposition in those countries is critical.
Black Friday growing strongly in Brazil

Black Friday growing strongly in Brazil

The phenomenal performance of Black Friday rippled around the world and Brazil was no different with eCommerce Brasil reporting billions in sales. So what are the figures coming out of Brasil on this bargain-hunting shopping day?
eCommerce in Brazil: Going local is key

eCommerce in Brazil: Going local is key

As with anywhere, Brazil has its fair share of problems – but with a population of 200 million, a tech-savvy and consumption-driven middle class and arguably the most internet-connected population in the world, is Brazil seen as a necessary evil for international merchants looking to expand internationally?

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More