Selling Online in Russia: A Quick Guide for Non-Russians
Hello, people! So you’re thinking about expanding your online business to the Russian market? Good choice! If you're not, you better do: Russian Internet today is a very rich yet not overcrowded market-place.
Here I’ll try to summarize some facts I learned about Internet sales in Russia and give you some tips.
And to start with, a little bit of statistics.
According to internetworldstats.com Russia had in 2010 almost 60 million Internet users and the figure is growing. Meanwhile, according to Forbes (warning, it's in Russian) there were about 5 000 online stores in Russia in the same year. And though this figure is also growing, one can easily figure out that there’s still lots of space for newcomers.
If one knows the specificity of the business, one can get some really good sales.
The main problems a successful seller has to solve are: give a customer an easy way to pay, and give a customer an easy way to get their purchase. Let’s talk a little about it.
The very first and the very biggest problem a foreign seller will face is that most information in Runet is in Russian. If you want the business to go, hire a translator, you won’t regret it a second. You will save more money than spend on them, because you’ll be able to find better offers. The links I am going to give below are mostly to the sites in Russian.
Tip 1: Hire a Russian-speaker or find a partner in Russia.
The way people want to pay for their purchases is different from the in Europe or USA. While most people there prefer paying with credit cards or online payment systems like PayPal or Google Checkout, Russians mostly prefer paying in cash upon receiving their purchases. This way may be quite convenient for customers, but is affordable to the seller only if they are selling something like food or groceries within a city, which is not very likely for a foreign seller.
But not to worry, there are ways of payment that are really popular in Russia and that are at the same time not risky as the previous one.
The first is SMS-payments. It may sound like a ringtone selling method, but it does work and it is popular. Just Google for “sms billing Russia” to find some offers (I personally liked this one). Normally, a customer has to pay tax to a mobile provider and some percentage to a billing provider. Better offers will be gotten if you search in Russian, and here’s where the translator will be most helpful.
The second, and in my opinion the best way, is QIWI. QIWI is a unique thing. It’s a network of payment terminals all over the country. Almost every shop has their machine. The good thing is that their system is integrated with all major mobile providers and even Visa and Master Card systems. Payments are normally free of extra charges for customers, which is another great advantage. As I said before, I think this is the best way to pay for things and not only in Russia.
There’s no normal PayPal in Russia, but there’re Yandex.Money and Webmoney. Both are nice, but Yandex.Money is nicer. Basically, both systems are analogs to PayPal.
Tip 2: Give customers a possibility to pay with QIWI-terminals (a must-have).
Also don’t forget about payment methods that are common for all online-stores worldwide: credit cards and bank transfers, though SMS- and QIWI-payments will be probably more preferable.
The next important thing is shipping. Russian Post is somewhat a legend for their unbelievably long delays (really long, like several months). The situation now seems to have gotten better and basically it was about the packages coming from abroad, so using Russian Post for delivery within Russia may be quite a secure tool. Nevertheless, DHL should not be left aside for they work in Russia and works pretty fine. Also, there’s a nice service by Russian Post itself: EMS Russian Post. It’s an Express post service, not too expensive, suitable for a wide range of customers.
As a customer of both Russian Post and DHL myself I can assure both ways are quite fine, and EMS is sometimes significantly cheaper. For instance, a package from Hong Kong has been delivered to me in the European part of Russia in about 2 weeks with DHL and a really big package (actually, it was a guitar) from Japan has been delivered to the same place in nearly the same time, but costed like 2 times less.
Tip 3: Use several services by Russian Post, especially EMS, alongside with DHL.
Courier delivery is a way if you plan to deliver things within one city (which is again not very likely for a foreign seller)
The next point will be the last for this post and probably a little surprising. From my point of view, the quality of an average new website in Runet is quite high. The environment dictates high level of design. Compare Amazon.com and Ozon.ru and see that the second one is more modern and more user-friendly. So, my point is:
Tip 4: Give your store good design so it will pass the requirements of the environment.
Investing in design is vital. You could possibly save some money by using ready solutions, and that's generally quiet a good choice for small businesses.
That’s all for today! If you have any questions, ask right away here in the comments, I’ll help if I can. Take care!
Good article. Pleasant to read.
As an expert in payment I would like to notice that there is no PayPal analogs in Russia at all. You should get a better understanding on how WebMoney and Yandex.Dengi works.
At the same time I would like to notice that WebMoney is absolutely leader of CIS e-commerce market. It supports a lot of local currencies and keep growing. As for now they have more than 18mln registration and around 20000 merchants.
Konstantin Molchanov says:
I have to agree with some points. I'd say that WebMoney is indeed a leader, but I see it as an unfortunate thing. As a client of the both, I'd definitely choose Yandex.Money for usage. And I presume I'm quite close to the "average customer."
From the customer's point of view, all three systems allow the essential minimum: paying online, binding with a bank account, transferring money commission-free inside the system. And that is why I compared them.
Ilya Vassilevsky says:
PayPal works perfectly in Russia, is localized to Russian, and you can attach many (though indeed, not all) credit cards issued by Russian banks to it to make one-time payments and subscribe to periodic payments. So, if your website accepts PayPal, you can expand to Russia right away :) Still, it would be better to use a meta-payment solution (one payment provider offering a wide range of methods). Of such providers, RoboKassa seems to be a popular choice.
Konstantin Molchanov says:
Quite strange to here that PayPal is fully operational in Russia because as far as I am concerned this is not true. See:
And Paypal.ru doesn't even belong to PayPal.
Thank you for the article it is very useful. I apologize if I repeat questions which have already been raised in previous posts but I am still not entirely clear.. I will be selling goods from the UK to Russia (I am Russian who is based in the UK ). What I am not clear about is that if I take payments via Yandex Money , Web Money, QIWI and other Russian payment systems – how do I transfer this money to my British bank account? I have done some research and it appears that most including Robokassa do not have facilities to allow to ‘cash’ the money in the UK. Due to a cash flow issues I need payments to arrive to my account immediately so I can buy new stock. Pay Pal seem to be the best and only option? My concern is that not many people in the age group that I am targeting (women age 35-50) will have Visa or Master Card to pay via Pay Pal. I would greatly appreciate any advice and suggestions.
There are many intermediary companies that specialize in buying from the US online stores and shipping to Russian consumers. The business model works as follows. US merchants deal with those broker companies instead of buyers in Russia. Russian buyers work also with those broker companies instead of retailers in the USA. For example, take a look at Global Orders USA - http://www.globalorders-usa.com . The broker company takes on the language barrier and the hassle of International shipping. I think it a great model for the American retailers and quite a good deal for the Russian buyers. Of course, International shipping is rather expensive, but in most cases prices for the same goods are considerably lower in the USA compared to Russia.
I just checked with sms billing, it seems that, for example, if I sell something at 10 dollar, and buyer pay by sms, the final money I received is bewlow 50%!! The payment cost is very high for sms, is it true?