Ecommerce in Russia will grow 170% next five years
Ecommerce in Russia is showing an active growth. Last year, it was worth 13.7 billion euros and for this year it’s predicted to be worth 17 billion euros. And by 2023, the Russian ecommerce industry is predicted to grow to almost 46 billion euros. This would mean an increase of 170 percent in the next five years.
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The predictions come from a Morgan Stanley report on ecommerce in Russia. The analyst claim Russia is the last major emerging market without a dominant online retailer. But they think the country is at an inflection point and predict a leader “being worth over 8.5 billion euros” will emerge by 2020.
Ecommerce share is still at 3 percent
Ecommerce still hasn’t that much of an impact on the total retail industry in Russia, as the online share is still at just 3 percent. But on the other hand, the internet penetration rate is quite high, with 80 percent, and the same goes for the smartphone usage (66 percent). The analysts believe Russia is reaching a critical mass of mature Internet users, which will lead to more online transactions.
Russian ecommerce growth also driven by retailers
But it’s not only the number and willingness of consumers shopping online that drive the growth of ecommerce in Russia, good things are also happening on the supply side. For example, several ecommerce initiatives have received significant funding over the past years, from both private and public backers, and this trend is set to continue.
“More funding should allow for more scale, helping retailers to drive down key pain points (such as fulfilment costs), and to improve delivery times leading to a better overall customer proposition”, Morgan Stanley predicts.
Requirements to thrive in Russian ecommerce
The American bank thinks ecommerce in Russia could develop according to a Chinese template. They think, for an ecommerce market leader in Russia to thrive, it needs to develop a marketplace model, invest in logistics and provide financial support for merchants.