Russia is a divisive country right now when it comes to online retailing. Political turbulence and frequent changes to legislation have led it to be considered a risky prospect for some ecommerce companies, yet, for others, there are a number of strong cases to be made for testing the Baltic waters.
We’ve looked at ecommerce success in France and the UK in recent blog posts, and now we’re turning our attention to Russia.
If you’re still sitting on the fence about this powerful nation, here are 5 reasons that taking a leap of faith could result in profits from Russia, with love.
There’s an enormous population of eager shoppers
Online shopping opportunities depend on market size and, in Russia, that market is huge. The country has a population of more than 143.5 million people, and £13 billion is already being spent on internet purchases annually.
Not only that, but the proportion of the population indulging in ecommerce is forecast to increase over the next 5 years. By 2020, it is estimated that Russia’s internet shoppers will grow from 3% of consumers to a considerable 60%.
There are cheaper resources to establish your presence
Russia’s marketing community is growing in talent, yet the cost of resources is still very affordable compared to established ecommerce markets. Services such as SEO optimization, web development and PPC management are half the price compared to markets such as the UK, with no discernible drop in quality.
There’s a pan-European precedent for ecommerce growth
While ecommerce itself might still be in its infancy, Russia’s internet culture – and its supporting tools – is just as developed as other European regions. For example, Yandex and Google share 91% of the country’s search engine market share. This means retailers can use familiar tools and techniques to raise their business profile in a new market.
Russian brands are in a comparatively vulnerable place
Domestic competition is a major consideration when launching online in a new territory, however the unstable climate within Russia over recent months has placed home-grown businesses in a weak position.
This means overseas brands with a stronghold in other markets can use their stable foundation to overpower local competition and grow share – particularly with a fall in the ruble’s value making regionally produced goods almost as expensive as their foreign counterparts.
Everybody’s facing the same challenges
Of course, international competition is a consideration too. However, don’t forget that other entrants to a new marketplace are facing the same challenges as your business. This is a great leveler, especially when combined with weakening of domestic competition.