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Growth dynamics of Russian e-commerce

0 20 February 2013

ecommerceThe Russian e-commerce market has grown three-fold between 2008 and 2012, from $ 3.5 billion to $ 10.4 billion as reported by PricewaterhouseCoopers.

Although sales in online retail in Russia are significantly lower that those in China and the United States, they are at the same level or even higher than those in Brazil and India. E-commerce makes up for 2.2% of overall of retail sales in Russia.

PWC analysts believe that the underdeveloped logistics of the infrastructure and public mistrust are the main problems hindering the growth of e-commerce in Russia, which is why more than half of Russian internet shopping is made by residents of Moscow, St. Petersburg and their regions.

Experts also believe that a further impediment is the fact that, compared with the rest of the BRIC, Russia’s mobile market is oligopolistic, leading to higher prices for the use of mobile internet, and therefore to a low percentage of online shoppers via mobiles. The situation may however change as the mobile market develops, leaving a large margin for market growth.

A further difficulty is the fragmentation amongst the suppliers of quality logistic services for online shopping. 62% of express deliveries in Russia are controlled by three global logistics providers- DHL, UPS, and TNT, 20% are made by "EMS Russian Post" and the remaining share is divided among 373 local companies. This structure is not allowing the market to develop at the greatest possible speed.

Morgan Stanley’s most recent report on e-commerce in Russia predicts the market’s increase up to $ 36 billion by 2015.

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