Russia’s e-commerce market is continuously growing and expanding. In fact, Statista approximates that Russia will showcase an annual growth in e-commerce of 5.7% between 2020 to 2024. This will result in an increase in market share from US$20,470m in 2020 to US$25,520m by 2024. Here’s some insight on Russia’s growing e-commerce market and the effect this will have on international merchants:
Due to the abundant e-commerce growth in Russia, many large companies are already attracted and set to penetrate the ever-growing market. International companies such as Microsoft, Nintendo, ASOS and even AliExpress have transitioned to the market with the hopes of satisfying its growing demand.
With the exponential growth of the Russian e-commerce market, many small foreign companies are also taking the leap with the hopes of increasing revenue. In fact, many Korean, European, American and Chinese companies are working hard to satisfy the growing demand of Russin consumers.
Key Trends Shaping Russia’s E-commerce Market
China seems to be playing a large role in the development of the Russian e-commerce market. Based on the information provided by KPMG 17% of Russians buy goods from online Asian stores. Chinese promotional methods, marketplaces and sales techniques have successfully launched within the Russian market.
Key Factors in E-commerce
One of the key factors in purchasing decisions of Russia continues to be the cost of goods on online platforms. In fact, based on information presented by KPMG 24% of Russians make purchasing decisions on the basis of price. Furthermore, 15% of purchasing decisions are based on brand and 9.6% based on peer influence. International merchants who abide by these factors are much more likely to succeed in the market and have greater profit margins.
Mobile Retail is Growing
Data Insight estimates that 13.4% of customers made purchases from their smartphones and 12.3% of customers made purchases through mobile apps. Young adults below the age of 25 are estimated to have used primarily mobile phones for online shopping. Additionally, it is estimated that within the coming years, the mobile device e-commerce market will double as more users begin to take advantage of wireless devices.
Popular Payment Methods In Russia
Image by Aleksandra Baranoff
Though cash is a popular payment method in Russian brick and mortar stores, more and more Russians are opting for terminal payments recently. E-wallets are the most popular alternative methods of payment. QIWI is one of the main e-wallet providers on the market currently. QIWI plays a major role in the Russian market currently with over 13 million users and 46,000 retailers. The e-wallet provides a multitude of benefits for its users such as multi-functionality, comfort, simplicity and security. QIWI is extremely flexible with which one can pay for purchases, utility bills, deposit funds and even make money transfers. Additionally, users can refill their e-wallets through a mobile phone bank card or terminal.
In addition to QIWI e-wallet, Oceanpayment also has deep cooperation with Russian mainstream e-wallet WebMoney and Yandex. Oceanpayment’s one-stop solution could help merchants quickly enter the local market, provide local consumers with secure and convenient payment solutions, improve consumer payment experience, and then increase order conversion rate for the merchants.
It is vital for international merchants to be entirely familiar with all aspects of the market they wish to enter. This includes statistics, trends, legalities, culture and many other factors which play an important role in doing business abroad. Merchants would highly benefit from the help of international companies, such as Oceanpayment. These companies can help in the research, transition, problem-solving and payment solutions in any given market. Through the use of an experienced company, merchants can guarantee themselves a smooth transition to cross-border sales with high conversion rates and profits.
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