Ecommerce in Russia: More Players, More Payment Choices, Better Logistics


I last wrote about the Russian ecommerce market in 2014, in “Ecommerce in Russia: Another Emerging Market? ,” where I addressed the restricted payment options and primitive logistics infrastructure. Those conditions have gradually improved. Russians have access to varied community […]

I last wrote about the Russian ecommerce market in 2014, in “Ecommerce in Russia: Another Emerging Market? ,” where I addressed the restricted payment options and primitive logistics infrastructure.

Those conditions have gradually improved. Russians have access to varied community payment choices. The best domestic marketplaces are constructing warehouses and increasing the use of technology to enhance logistics. New delivery formats have emerged self-pickup from offices and lockers are popular because they provide online shoppers an alternative to the unreliable Russian Post, the national mail service. Nevertheless, ecommerce sales have grown slowly, representing an ailing economy.

Domestic online sales of physical products are expected to reach $22 billion in 2019, based on Russian research company Data Insight. Cross-border earnings (imported goods) are expected to account for $7 billion this year. This compares to about $504 billion national U.S. ecommerce sales in 2018, according to Statista.

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Purchase Drivers

Russian goods have a reputation for poor quality and high prices. More positive pricing is the principal driver of cross-border ecommerce purchases in Russia. A 2018 poll by Growth from Knowledge (a German research company ) and Yandex.Market (the Russia-based market ) found that nearly 60 percent of those respondents said they shop online because it’s less expensive than offline.

Additional discounts and free delivery are different things that inspire Russian shoppers, both for national and international purchases. The items Russians buy most often online are consumer electronics and apparel and accessories.

Russian customers aged 25 to 34 years are the most frequent online shoppers.

Domestic Players

The national ecommerce market generated $18 billion (including VAT) in bodily goods sales in 2018 based on Data Insight. The earnings of the top four online retailers united comprised 27 percent of the total. Much like 2014, The Russian ecommerce landscape remains fragmented, with only the top two national market leaders — Wildberries and Citilink — generating more than $1 billion in sales in 2018.

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Wildberries, which focuses on fashion products, and DNS-Shop, which sells digital products, grew 74 percent and 83 percent respectively in 2018. Wildberries has been Russia’s biggest online shop for three successive years and is expanding into appliances. The business linked the earnings growth to the expansion of its product line along with the evolution of pick-up points. During the first 3 weeks of 2019, Wildberries opened 800 new pickup points, bringing the total amount to 3,700. Launched in 2004, Wildberries has 15,000 workers.

The Russian ecommerce landscape remains fragmented…

Multichannel player Citilink has over 20 stores in Moscow, and its own site specializes in consumer electronics and household appliances.

Ozon, a recognized player that shifted its business model in September 2018 to become a market for different sellers, now has 6,000 merchants. The organization had a 73-percent growth rate in 2018 and is investing heavily in its own fulfillment capabilities.

Yandex is a big Russian multinational company specializing in internet-related services and products, including ecommerce. The Yandex Market Group was established in 2018 as a joint venture by Yandex and state-owned Sberbank, the largest bank in Russia. The group contains three entities: the Yandex.Market; Beru, another national market; and Bringly, an international market that claims more than 4 million products and directly competes with AliExpress.

Last month Russian online news provider Bell reported that”Sberbank and Yandex may depart their e-commerce joint venture… while Sberbank may be eyeing another player in the region — Ozon or Avito.” Avito is a classified advertising site, like Craigslist. In ancient 2019 South African net conglomerate Naspers bought Avito.

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Cross-border Ecommerce

Chinese firms dominate the international marketplace with AliExpress, the enormous Alibaba-owned market, being the strongest. Russians also purchase from Tmall, another China-based market. Chinese sellers offer you the best prices, and Russian online shoppers are very price sensitive. Orders placed by Russian shoppers on AliExpress are delivered to Russia by approved shipping partners of Cainiao, the logistics service aggregator of Alibaba Group.

In September 2018 Alibaba allied with Group, a leading Russian online company. Both partners aim to create an ecosystem which would encompass ecommerce, social communications, and gambling. Additional investors include Russian telco MegaFon and state-owned Russian Direct Investment Fund.

In the last year, Turkish ecommerce merchants have entered the Russian market.

Seventy-three percent of cross-border bought goods are delivered by Russian Post. Acceptable shipping period for cross-border purchases is about three weeks, according to a Growth from Knowledge 2018 survey. However, consumers in major Russian cities expect delivery in three to five days.

Nevertheless, the cumbersome logistics process in Russia is a barrier to cross-border ecommerce. Many international sellers use a regional logistics partner to browse the procedure.


For domestic purchases, payment on delivery (either by cash or debit card) is still dominant, accounting for 70 percent of ecommerce payments. Other payment options for domestic purchases comprise the state-supported bank card Mir (which competes with Visa and Mastercard) and e-wallets like Yandex.One and WebMoney. Payment on delivery is declining, but because of greater trust in ecommerce and the higher availability of different methods of payment.

For domestic purchases, payment on delivery (either by cash or debit card) remains dominant…

Most foreign sellers don’t provide payment on delivery. For international purchases, Russia-based consumers prepay using credit and debit cards or other electronic payment methods.

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Apple Pay, Samsung Pay, and Google Pay entered the Russian market in 2016-2017. In 2018, every one of these payment methods was used by approximately 15 percent of online consumers, largely by smartphone owners in urban areas.


Many Russians have small incomes. The inexpensive Chinese products sold by AliExpress are particularly appealing due to the huge variety and low prices. Frequently Russian consumers purchase goods from AliExpress and resell them on Avito. The gray market is enormous, exceeding the official ecommerce marketplace for physical goods many times over.

Beginning in January of 2019, Russia reduced the per-person threshold for tax-free purchases from international vendors to $500 from $1,000. Past the $500 limit, the government assesses a 30 percent tax. The government is considering lowering the amount .

The typical individual online cross-border buy was just $25 in 2018, according to the Ecommerce Foundation, a Netherlands-based research company. The general domestic average purchase value was 63.

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