Practical Ecommerce

How to start selling in Russia

In 2016, ecommerce revenue in Russia grew 21 percent compared to 2015, to $16 billion. This is according to the Russian Association of Internet Trade Companies. The Association expects Russian ecommerce revenue to reach $20 billion for 2017, which will be another 25 percent increase. Roughly 25 percent of ecommerce sales, for $5.6 billion, are to consumers in other countries.

In this post, I’ll provide an overview of ecommerce in Russia. I’ll also offer suggestions for foreign ecommerce companies to sell in the Russian market.

Ecommerce in Russia

First, ecommerce is relatively new and is growing rapidly. Roughly 70 percent of Russian consumers — 102 million people — access the Internet. But only 46 million of them regularly buy goods online, representing a compelling opportunity for growth.

More than half of Russian online shoppers are age 25-34 and live, collectively, in Moscow (46 percent) and in St. Petersburg (11 percent). Fifty-one percent of online shoppers are female.

The most popular product categories online are apparel, cosmetics, and small appliances.

Foreign ecommerce sales into Russia grew by 37 percent in 2016 compared to 2015. Fifty-one percent of cross-border sales are from China. Twenty-four percent are from Europe and 12 percent are from the U.S. Sixty-four percent of Russian consumers spend less than $26 for an order. Only 21 percent spend up to $60 for the order. Delivery charges, on average, cost another $21.

China-made imports are typically the least expensive. But Russian consumers are willing to buy from higher-quality European and U.S stores if the price is agreeable.

User experience. Russia-based ecommerce sites often have a poor user experience. Complaints from online consumers are constant, and growing. Most online stores in Russia are difficult to use. Responsive design is uncommon for Russian online sellers. Load speed is a huge problem.

Personal information security worries Russian consumers. Seventy percent of Russian consumers prefer payment on delivery, according to Nielsen, the research firm. Forty-seven percent of consumers will pay on delivery with a debit card.

Most online shopping in Russia is from desktop computers. However, a Data Insight survey in Russia found that 27 percent of respondents would make purchases using mobile devices if the store were mobile friendly. Mobile shopping and mobile payments will inevitably grow with the younger generation. In fact, a smartphone is the primary online shopping device for Russian consumers under 25 years old.

Delivery is painful for Russian shoppers. It can be long, expensive, and unsafe. And even if the package reaches its destination intact, it can be different from what was ordered.

In fact, leading cross-border retailers such as Gap, Debenhams, and Marks & Spencer do not officially deliver goods to Russia. But others, such as Macy’s and ASOS, do.

Nevertheless, delivery limitations from top international retailers do not stop Russian consumers from buying from foreign brands. It has created a niche, in fact, for Russian entrepreneurs who purchase goods in other countries on buyers’ behalf and then deliver to them in Russia. The process is simple. The delivery provider has a long list of supported online stores and malls. The buyer chooses a product to buy, creates an account at delivery provider’s system, completes the order information, and pays for it electronically. The owners of these services welcome new foreign online stores.

Taxes and duties. Foreign merchants that sell less than €1,000 per month, for goods that collectively weigh less than 31 kilograms per month, do not have to pay duties for deliveries. That allowance is going down to €500 in 2018 and to €200 in 2019. Deliveries over that limit will become a subject to 30 percent duty.

Soon, major foreign marketplaces operating in Russia — such as Amazon, eBay, and AliExpress — will have to pay 18 percent VAT for the purchases made by Russian consumers. Those marketplaces will presumably add this VAT to subtotal cost, making those goods more expensive for Russian consumers. But goods purchased on the marketplaces, with the 18 percent VAT, will have expedited crossing into Russian, meaning faster and safer.

Language. EF English Proficiency Index attempts to rank countries by their English-language skills. It reports that roughly 52 percent of Russians know English. But expansion into the Russian market demands localization. Consumers in Russia (and other countries) are naturally used to shopping on their own language, using their local currency. Russian consumers are more likely to purchase from a brand if they can understand promotions and use filters without translating.

How to start selling in Russia

  • Sell popular categories, such as apparel, cosmetics, small electronics, or gadgets.
  • Do not accept returned goods from Russia. Customers must agree with the no-returns policy before purchasing.
  • Try selling gifts or handmade items. The average 2017 Christmas holiday budget for a Russian consumer amounts to €250. Chocolates, perfumes, and cosmetics are the top gift choices.
  • Offer premium or high-end goods. Luxury boutiques are relatively popular among affluent Russians.
  • Offer quality. Though Russians are used to budget limitations, they nonetheless value quality and positive purchasing experience.
  • Target big cities. Citizens in Moscow and St. Petersburg spend two times more shopping online than other regions.
  • Use social channels. This is the fastest way in Russia to build brand and reach consumers.
  • Consider payment-on-delivery. It is the most popular payment method.

Marketplaces are a good way to reach Russian consumers. Popular marketplaces include:

  • Amazon. The simplest way. Russian consumers are already there.
  • eBay. Not as popular as Amazon, but can still produce sales.
  • Yandex.Market. Yandex is the largest search engine in Russian.
  • Avito. The Russian Craigslist. Anyone can join and sell.
  • Ozon. The Russian Amazon. It’s the national marketplace of everything.
  • Litres. The dominant digital bookseller; a national leader. Self-publishing is supported.
email-news-env

Sign up for our email newsletter

  1. John O'Brien October 19, 2017 Reply

    very interesting article, accurate and to the point, so who are the most reliable delivery companies and accept COD, is anyone offering returns management ? thx John

    • Maxim Komonov October 20, 2017 Reply

      Hello, John!

      Thanks for the kind words. This is my international writing debut.
      I can’t say for everyone right away, but one major player comes to my mind – SPSR. Well established and long-time company.

      I think they deliver from Asos, Amazon and eBay to Russia at the moment. They also deal with returns.
      You gave me a nice theme for the next post. Thank you!

  2. David October 19, 2017 Reply

    How does Organic Health & Wellness sell in Russia? I represent a manufacture here in the USA that has very reasonable pricing!

    • Maxim Komonov October 20, 2017 Reply

      Hello, David!

      The interest to that kind of products is very strong and rising. Russian consumers like everything natural – that’s a part of national mentality. But everything organic is more expensive – no surprise here. There’s also a common opinion around the country, that wellness and health products manufactured abroad are of the higher quality than ones made in Russia. Probably, this is not correct opinion, but it has place and you can use it.

  3. saneen javali February 24, 2018 Reply

    How can I sell on Russian e commerce marketplace from India? Which are the appropriate sites?

    • Maxim Komonov February 26, 2018 Reply

      Hello, Saneen!
      Sorry for keeping you waiting.
      If you already have your products listed in Google Merchant Center and Yandex Market, the marketplace you want to continue with is Ozon.ru – the largest place for online shopping in Russia. Here is a link for you to get started – https://goo.gl/5rvyG1 . Unfortunately it’s all in Russian but you can use Google Translate to get the point. Ozon does not allow each and everyone to sell on the marketplace to maintain high reputation. You need to sent a request with all documents listed and if they make a positive decision, you’ll be green to go. Probably, it will take you some time, but don’t hesitate to make the first step. Good luck!

  4. Widmayer February 27, 2018 Reply

    hi do u know some delivery providers?

  5. Alexander March 10, 2018 Reply

    It has created a niche, in fact, for Russian entrepreneurs who purchase goods in other countries on buyers’ behalf and then deliver to them in Russia. The process is simple. The delivery provider has a long list of supported online stores and malls. The buyer chooses a product to buy, creates an account at delivery provider’s system, completes the order information, and pays for it electronically. The owners of these services welcome new foreign online stores.

    Could you please provide us example sites for this?

    Thank you

    • Maxim Komonov March 12, 2018 Reply

      Hello, Alexander!

      Thanks for asking.
      Qwintry, Borderlinx or Buyusa are good examples of the service.

      Cheers!

  6. Bat April 13, 2018 Reply

    I have two questions. 1. What is the likelihood of Russians making a payment (for an online order) into a bank account in Russia of the seller? Are mobile payments popular among ordinary people in Russia? 2. How risky or practical is delivering goods via Почта России in the form of parcel?

    • Maxim Komonov April 15, 2018 Reply

      Hello, Bat!

      Thank you for the question and apologize for the delay with an answer.

      1. I believe you’re asking about a direct transfer without payment aggregator at checkout. This practice is common but not in case of online purchasing. The option is considered only for the highly trusted vendors known personally. As for mobile payments – yes, but with a remark. Mobile payments are raising but debit card transfers are still the most popular payment method. But as PayPal & Data Insight report, in Russia, one of five purchases made online in 2017 were mobile. For younger generation under 25 y.o. mobile payments are the primary method. Things will continue to change rapidly.

      2. The Post of Russia is a heavenly gift and a hell curse at the same time for the whole country. They can be lightning fast or can lose your letter with no trace at all. The Internet is full of memes on Russian Post workers and attitude. The organization is huge and has hundreds of thousand employees and over 43 thousand offices across our tremendous country. It is hard to maintain the quality of the services of such big company on each stage. But the organization has been heavily invested and modernized a couple of years ago and they promise to become better.

      At the moment: Is it risky to deliver by The Post of Russia? I would say “Yes”. Is it fast? You never know. Is it cheap? Absolutely yes. And they have an indisputable advantage: with their logistic capabilities, they can deliver your parcel anywhere (if they don’t lose it) – to any big city or tiny village, or wild forest, or desolated island, or the North Pole, or wonderland – they will say “Yes” to any sending.

      Hope I’ve been helpful.

      Good luck!

      • Bat April 16, 2018 Reply

        Dear Максим,

        Thank you very much indeed for your answers to my questions. They are extremely helpful for someone like me who has never lived in Russia to know these things. Thank you again! Keep up the good work that you are doing.

        • Maxim Komonov April 16, 2018

          Thank you, Bat!

          You made my day!