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.

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):

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 Ozon.ru). 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.

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.

So what are the Russian's actually buying from the foreign online stores?

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.

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.