The sleeping giant?
4 Reasons to enter the Russian eCommerce-market
Russia is one of the world's fastest growing eCommerce markets. If you are going to read one post about the Russian eCommerce market, this it the one, trust us.
Growthsulting is one of the leading foreign agencies helping companies to reach the Russian market. We work with many big and small eCommerce & B2B-companies in the Russian market and help them them with marketing & sales to Russia.
Great growth expectations for eCommerce
Russia's eCommerce market is growing rapidly and according to the research by АКИТ (Trade association for Russian eCommerce-companies) and the Russian banking giant Sberbank the market grew by 58,5% in 2020. The online sales in 2020 did count for only 5,9% of the total retail market. In more developed eCommerce markets the same number is usually between 10-15%.

When you compare these numbers to other big European countries, the potential comes even more clear:
Germany's eCom market growth in 2020: 14,6%
France's eCom market growth in 2020: 18%
Global eCom market growth in 2020: 26%

«International companies now have unique window of opportunity to enter Russia's eCommerce market before it gets too saturated with competition»
Mikael Krasnov
Founder, CEO
eCommerce to Russia is easy
(sort of)
Many of our clients have the perception that accessing the Russian e-commerce market would be really expensive and labor-intensive process. The usual way of thinking is that you would need to set up a company in Russia, find a distribution network and partners in Russia, and fight the infamous Russian bureaucracy every day. This can be the case in B2B-sales, but slightly different rules apply in D2C-sales (direct sales to the Russian consumer):
You do not need a trade agreement or import certification

Purchases are tax and duty free up to 200 € / order. 15% tax is charged on the part exceeding € 200

You do not need to set up a business in Russia

Sanctions have no bearing on consumer trade

Tax and duty exemption also affects the price of products, and in some product categories, Foreign Online Stores can fight with their prices instead of unique selection and quality. If a foreign company sells its products through a Russian subsidiary within Russia, they would have to pay 0-18% customs duty and 20% VAT on the import of each product. In addition, the company should take care of the warehousing and logistics of the products or pay for it to a partner (for example, Itella). For this reason, it is almost automatically better to start sales from abroad and only when volumes increase drastically, consider establishing a Russian subsidiary.

However, before accessing the Russian e-commerce market, it is good to consider the following obstacles as well. The Russians are already used to fast deliveries, and in the largest Russian cities, many online purchases are delivered the same or the next day.

When sending from abroad, this is almost impossible and the delivery times to Moscow and St. Petersburg are about 4-8 days and to the rest of Russia about 8-14 days. Transport costs are also high and should be taken into account when considering the product range. In other words, it is usually pointless to send "a few euros" worth of products to Russia.

Another challenge relates to sales channels: where to sell, where to advertise and in what language? In Russia, you can sell either through your own online store or through a Russian marketplace (we work closely with Russian marketplace When joining and using marketplaces, you also need a Russian-speaking person, as most of the registration and dashboard pages are in Russian only.

Another thing is the language skills: according to news story published in 2015, only 10% of Russians speak even a little English. So localization is really important.
Consumer behavior is changing
For many years the Russian's online buying behavior was focused on cheap products (especially from China) and more expensive purchases were rare. Now that the Chinese companies like AliExpress have started building their own logistics hubs inside of Russia, the AOV (average order values) of cross border purchases have gone up.

Another thing is the change in people's mentality. Many Russians have started buying more expensive items and the buying behavior is slowly shifting from price leaders to market leaders and premium-category.
…Earlier Russian buyers were keen on making low-price and affordable goods orders from abroad. But now, more and more high-quality and luxury goods retailers are experiencing interest from Russian consumers.
Oksana Korobkina
COO, Yandex.Money
So what are the Russian's actually buying from the foreign online stores?
Cross border sales to Russia by categories, 2020
Average order values by category, Russia 2020. Orange: cross border sales, blue: domestic sales
As we can see from the graphs, the Russians are spending much more when buying from abroad when compared to the Russian online stores. This is due the fact that the shipping costs affect to the average order value (AOV) positively, since the costs are higher and customer wants to "save money" by purchasing more at the time. Another reason is, that many premium products are not currently sold in Russia or their price is much higher than the price abroad.
Grow to other russian-speaking countries
After a successful launch to Russia, you will have a chance to enter to other markets close to Russia. The eCommerce-markets in countries like Kazakhstan, Belarus & Ukraine are growing rapidly and the selection of premium products is even less in those countries. If your products are interesting, the odds are that you will have

The process of expanding will be also much easier, since the Russian language is already widely spoken in those countries, so you don't have to worry about the translations.

Your company could also use these translations when entering the Baltic region, since they have big Russian-speaking minorities and is used as a second language in many online stores.