"The Chinese invasion of Russian ecommerce"

Over the past few years, China has become the dominant force on Russia’s cross-border market. In 2014, Chinese merchants captured market growth almost entirely, accounting for around 70% of fulfilled orders and 50% of market value, according to expert estimates cited in our recent study `The Russian Cross-Border Sales & Payments Market.`

While Russia’s production capacities in the field of consumer goods are widely known as the weak point of the country’s economy, its neighbour, China, has plenty of resources to manufacture these goods. The low prices of Chinese-made goods are, ultimately, the biggest attraction for Russian consumers, especially as the Russian economy experiences decreasing growth and the RUB continues to depreciate against the USD.

AliExpress, the market leader by far, saw its Russian audience grow fivefold in the January 2013 - July 2014 period. It became Russia’s most visited ecommerce website and one of the country’s top 10 most visited websites, overrunning eBay or local giant Ozon.ru in terms of traffic. In the last months of 2014, the Alibaba subsidiary sent several hundred thousand packages and parcels every day to Russia, and growth is continuing in 2015.

Russian audience of some large international ecommerce websites
in million monthly users

Even though its huge catalog is not fully localised, AliExpress has done much to adapt its offer to Russia’s specifics. In addition to bank cards, the Chinese platform now accepts payments via QIWI, Yandex Money and WebMoney, three major Russian operators which combine online and offline payment channels across the country. The Chinese company has also launched iTao, a social network project dedicated to Russian e-shoppers. The service is a mixture of social networks Pinterest and Instagram, with users posting successful and unsuccessful shopping experiences, adding product information, as well as sharing tips with each other.

In early 2015, in a bid to make deliveries faster and more reliable than with postal operators (which may take several weeks or even months to ship goods between the two countries), AliExpress inked a deal with SPSR Express, a major private operator. Not only will the Russian company use its existing courier and pickup point networks to serve AliExpress, but also intends to invest up to USD 10 million to open hundreds of dedicated facilities across the country. Last, but not least, AliExpress will open its marketplace, through a special section, to Turkish fashion brands willing to reach Russian online consumers.

AliExpress is not the only platform to reach Russian consumers. Around one third of eBay’s cross-border sales to Russia are generated by Chinese merchants. Amazon’s marketplace is also used widely. LightInTheBox.com and DealeXtreme.com are other competitors, while DJ.COM is actively preparing market entry. Worthy of note are also such Russian platforms like Kupinatao, Shopotam or Vivatao, which offer a fully localised interface, as well as mail-forwarding services to make purchases on Chinese websites even easier.

To receive an executive summary of EWDN’s study on cross-border sales to Russia, please contact report@ewdn.com.

About Adrien Henni

Adrien Henni is Chief Editor and co-founder of East-West Digital News, the international resource on digital industries and ecommerce in Eastern Europe. After 10 years of experience in the internet, mobile and venture businesses in France, Russia and Ukraine, Mr Henni has begun advising a variety of startups, funds and other organisations.