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Russia’s retail e-commerce market soars 20% to $15.7 billion

Russia’s total retail e-commerce sales reached 920 billion rubles ($15.7 billion) in 2016, up 20 percent from the previous year, according to a study (in Russian) by the Association of Online Retail Companies (AKIT), which unites the country’s largest e-commerce retailers. AKIT estimates the market will top 1 trillion rubles ($17.1 billion) in 2017.

Russian consumers, however, increasingly prefer foreign retailers. Last year, growth in the cross-border retail market (37 percent) significantly outpaced that of the local market (6 percent). As a result, foreign retailers accounted for over 300 billion rubles ($5.2 billion) in 2016 – a third of the market.

The growth of cross-border trade in Russia’s e-commerce market is mostly due to the lower prices owing to the fact that foreign companies don’t have to pay taxes or fees," said AKIT’s president, Alexey Fedorov. At the moment, all small parcels coming into Russia are exempt from customs duties, whereas Russian retailers that import their goods must pay various tariffs, he added.

According to AKIT data, 90 percent of goods purchased abroad came from China, but in monetary terms the share of Chinese retailers was slightly over 50 percent, which indicates a low average purchase size in Chinese online stores.

If this continues, there’ll be nothing left of Russian e-commerce in a few years, and we’ll sell nothing but Chinese goods. Russia will become a tax-free market for China," said Fyodorov, adding that Russia should introduce fees and taxes for the cross-border online retail market.

In 2016, Chinese online retailer Aliexpress became the most popular online store in Russia, with over 22 million unique visitors a month. Russia’s second most popular e-commerce retailer, Ozon.ru, is far behind with 9 million visitors a month. Third place goes to Eldorado.ru, an online retailer of consumer electronics, with an audience of 7.5 million unique visitors a month.

Russia Beyond The Headlines, 21 March, 2017