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Russian E-Commerce Market Grows by 26%

Russians have embraced e-commerce, which is growing ten-times faster than the real economy and traditional retail.

The number of purchases online was 191 million in the reporting period, up by a record 44%. Pixabay

The Russian e-commerce market in the first half of 2019 expanded by 26% year-on-year to 725 billion rubles ($11 billion), Vedomosti daily reported on Sept. 2, citing a report by Data Insight. The number of purchases online was 191 million in the reporting period, up by a record 44%.

The largest online retailers accounted for most of the growth, with Russia’s leading e-retailer Wildberries almost doubling its orders to 61 million accounting for almost every third online purchase in Russia. The company's own data put turnover in the first half of 2019 at 85 billon rubles ($1.27 billion), up by 79%, and expected to top 200 billion rubles ($3 billion) in 2019.

Wildberries is Russia’s biggest e-commerce site and has been growing in leaps and bounds in recent years. Its founder, Tatyana Bakalchuk, became Russia’s second-ever female billionaire earlier this year after the company's revenue broke through the $1 billion mark.

Ozon online retailer of AFK Sistema investment conglomerate and Baring Vostok Capital Partners boosted orders by 85% to 11.5 million and by 80% in monetary terms to 32 billion rubles ($478 million).

Data Insight notes that the growth of largest platforms has not yet cannibalized the business of smaller players, as the other 500 largest retailers also increased the orders by 21% on average, with the growth rate accelerating from the 14% seen in 2018.

The number of online shoppers that make more than 15 purchases annually increased by 25%, while bundling products from 3-4 different categories also increased. However, the average online ticket size declined by 14% to 3,790 rubles ($57). 

Russians have embraced e-commerce, which is growing ten-times faster than the real economy and traditional retail. Online sales currently account for about 4.5% of Russia’s total retail turnover, but that has been more or less doubling every year in recent years and is on course to make up 8% of retail turnover by 2021.

This article first appeared in bne IntelliNews.

bne IntelliNews

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