Insight around the world - Russia
JOHN READMAN, COMMERCIAL DIRECTOR, SEARCH LABORATORY
The Russian ecommerce market received another shot in the arm in June as online fashion retailer Lamoda announced that it had raised $130m of investment.
The oligarch-led deal, which is the largest ever by a Russian ecommerce site surpassing Ozon’s $100m capital investment in 2011, is yet more evidence that the nation is on the cusp of an online boom.
Despite boasting nearly 60m internet users Russia still lags behind when it comes to ecommerce.A lack of trust in online payment systems has meant the market has stagnated while fellow European counterparts have blossomed.
But retailers and consumers alike are beginning to shake free of this constraint. Cash on delivery remains the preferred method of payment in Russia, but debit and credit cards are becoming increasingly prevalent, with MasterCard estimating that 70% of Russians now own a bank card.
UK retailers can take advantage of this, and their first port of call when expanding their ecommerce operation to Russia should be the search engine Yandex.Yandex is Russia’s Google and 87% of online sales in the country start on its pages. By optimising for Yandex you make your website visible to the Russian online consumer.
The UK domestic ecommerce market is the global leader – however our retailers’ expertise does not translate smoothly to the Russian market. Cultural and language barriers are more poignant in Russia than in other European markets and these need to be carefully navigated.
A handful of UK retailers have taken on these challenges and shown signs of waking up to the fact Russia is an internet giant no longer a slumber – ASOS now has a Russian site, for example – but many remain ignorant of the potential profits to be made in the country.