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Report

Russian E-Commerce and E-Payments Report

Research Type: Overview
Published: 11 Sep 2019
Pages: 120
File Type: PDF
Size: 2269kb
Analysts: Ana Sabie
Geographic Scope:    Russian Federation
Editions: Ecommerce
Topics: Online-Payments, Product, Services

This free report highlights the main facts, numbers and trends of the Russian ecommerce and e-payments markets in an international perspective.

It is published by East-West Digital News (EWDN), a news and research agency covering Eastern Europe’s tech markets, with contributions from leading market experts and support from ThePaypers.


Free download link: https://www.ewdn.com/ecomreport/


Key findings:


• At around USD 20 billion (domestic market for physical goods), the Russian ecommerce market is entering an accelerated development cycle. As ecommerce penetration is growing across Russian regions. A range of major domestic online retailers see their sales volumes increase annually between 50% and 150%.


• Estimated between USD 3.2 and USD 5.5 bln in 2018 (physical goods only), inbound cross-border flows are still limited by global comparison. AliExpress still dominates the cross-border scene, but Western players saw their sales resume in the past two years after a setback in 2014-2016. Meanwhile, a range of Turkish players are now entering the Russian market.


• The majority of cross-border purchases are tax-free. There is no major obstacle for international players to succeed – be it in logistics, payments, customs or marketing. Market entry is made easier by new marketplaces and a variety of strong local service providers. However, foreign ecommerce and e-payment companies should pay particular attention to Russia’s personal data laws which may require adaptations.


• While cash payments tend to decline, bank cards are widely used for online purchases of digital goods, physical goods and services. Local e-wallets as well as PayPal are popular too. International contactless payments entered the Russian market in 2016-2017 and already enjoy popularity in urban areas.


Recommendations to international companies:


• A variety of niches are favorable to international merchants who can succeed if adapting to local conditions. In particular, the interface should be localized and specific Russian payment means should be accepted.


• According to law, all companies must store the personal data of their Russian users or customers in servers located physically on Russian soil. This applies to foreign online retailers targeting Russian consumers even with small sales volumes. The legal requirements, which are distinct from the EU’s GDPR, may require substantial adjustments in the collection, processing and storage of personal data. 


• The personal data local storage requirement also applies to payment operations. This implies that payment service providers must store Russian personal data in Russia, not in the cloud or other countries.


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