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.