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E-commerce market in Russia 2015
The e-commerce market in Russia saw slow growth in 2014-2015 due to economic crisis and currency fluctuations. Total e-commerce sales reached $21.4 billion in 2014, with domestic sales growing 3% and cross-border sales increasing more rapidly at 50% annually. Mobile commerce is an emerging trend, accounting for 10% of online purchases. Key drivers for future growth include expanding internet access, convenience of online shopping, and the potential of new product categories like groceries. International retailers may find opportunities through acquisitions as the competitive landscape changes.
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E-commerce market in Russia 2015
- 1. E-Commerce Market inRussia 2015 June 2014 updated Август 2014 August 2015
- 2. Hermes Group Facts& Figures Интернет-магазин уже есть, и было бы неплохо: Hermes is the only global service provider positioned closed to customers and providing all services along the supply chain — Hermes Group turnover 2014 (+7% 2014/2013)€2.23 bln — Suppliers joined Hermes-OTTO International supply chain2000 — Employees of Hermes Group worldwide12 470 — For Hermes Fulfilment due to the world’s largest automatic returns warehouse in Haldensleben The VDI Innovation Award 2013 — Parcels processed by Hermes in Europe in 2014 530 mln Sourcing & Product Transport & Logistics E-Commerce Full Services Distribution — Hermes is a premium sponsor of the football German Bundesliga
- 3. USA EU USA RU EU EU CN EU USA GLOBAL E-COMMERCE CN DE CN CN EU CN USA EU EU HNT’s Clients Since 2010Hermes NexTec has been launching and managing e-stores for the leading global and national brands all across the world
- 4. Content E-Commerce Market Trends &Perspectives E-Commerce Players E- Commerce Audience Size ● Volume ● Dynamics ● Structure ● Share ● Cross-country Comparison Volume ● Dynamics ● Potential ● Geography ● Spendings ● Payments ● Cross-country Comparison Number ● Leaders ● Dynamics ● Concentration ● Share ● Cross-country Comparison Market ● Audience ● Players ● Trends & Perspectives
- 5. Russian E-Commerce MarketOverall
- 6. Economic Crisis AffectedRussia in 2014-2015 Average weighted exchange rate RUR/USD: 2013 = 32.7 2014 = 38.4 Full dramatic effect of crisis will come out following the results of 2015 GDP 2014/2013 + 0,6% Inflation 2014 11.4% GDP(F) 2015/2014 - 4,0%2015(F) = 61 Inflation 2015 (F) 16.5%
- 7. Russia’s E-Commerce MarketSize (2014) Total Russian e-commerce market volume is $ 21.4 bln including: $ 10.9 bln $ 6.0 bln $ 4.5 bln Source: Hermes NexTec Russia estimations, E-Commerce Europe, Data Insight, InSales, 2014-2015
- 8. Russia's E-Commerce DomesticMarket Growth 2010-15F Total online sales: +3% (+ 30% in RUR) Physical goods: -1% (+ 20% in RUR) Virtual goods & services: +13% (+ 25% in RUR) Source: Hermes Nextec Russia estimations, EWDN, Data Insight, InSales , 2014-2015 2014
- 9. Russia is #4E-Commerce Market in Europe Rank Country Total Online Sales, $ Growth rate in $, % 14’/13’ 1 UK $ 72.9 bln 15.8% 2 Germany $ 58.8 bln 25.0% 3 France $ 42.8 bln 16.5% 4 Russia $ 16.9 bln 3.0% 5 Spain $ 11.1 bln 19.6% 6 Italy $ 8.6 bln 19.0% 7 Netherlands $ 8.3 bln 13.5% 8 Sweden $ 5.9 bln 15.5% 9 Poland $ 5.8 bln 22.6% Source: Hermes NexTec Russia estimations, Centre for Retail Research, 2014-2015
- 10. Russia’s E-Commerce MarketStructure Car parts Apparel, footwear, accessories Household goods, furniture, DIY Products for kids Cosmetics & Perfume Other Physical goods only %, 2014 Source: Hermes Nextec Russia estimations, InSales, EWDN, FOM, Consumer Barometer, 2014-2015
- 11. Share of E-Commercein Total Retail Sales 2014-2015 Source: Hermes NexTec Russia estimations, Centre for Retail Research, 2014-2015
- 12. E-Commerce Audience inRussia
- 13. Army of InternetUsers (2014) 146 000 000 people live in Russia (+ 400K 14’/13’) 71 500 000 of them use the Internet daily ( + 5.5M) Source: FOM, TNS, government statistics, 2014-2015
- 14. Internet Audience &Internet Penetration (2014) Source: Eurostat, E-Commerce Europe, Centre for Retail Research, TNS, FOM, 2014
- 15. Army of OnlineShoppers (2014) 31 000 000 people make purchases online in Russia or 27% of population 18 yo+ Source: FOM, government statistics, Hermes NexTec Russia estimation, 2014-2015 (+ 6M 14’/13’)
- 16. Internet Users ShoppingOnline Source: Hermes NexTec Russia estimations , Eurostat, E-Commerce Europe, Centre for Retail Research, FOM, 2014-2015
- 17. E-Shoppers Geography byRegions 4,1 Southern R. (13%) 9,1 Central R. (29%) 6,0 Volga R.(19%) 3,4 Ural R. (11%) 3,5 North-Western R. (11%) 4,0 Siberia R. (13%) 1,0 Far East R. (3%) Moscow – 5,9 (19%) Millions of people, 2014 Source: TNS, Yandex, Comcon Synnovate, FOM, Hermes NexTec Russia estimations, 2014-2015
- 18. Average Yearly OnlineSpend per E-Shopper Source: E-Commerce Europe, Centre for Retail Research, FOM, VISA, Data Insight, CRR, RetailMeNot, Hermes NexTec Russia estimations, 2014-2015
- 19. AOV of OnlinePurchase & Annual Number of Purchases Source: E-Commerce Europe, Centre for Retail Research, FOM, VISA, Data Insight, CRR, RetailMeNot, Hermes NexTec Russia estimations, 2014-2015
- 20. Payment Methods ofOnline Shopping in Russia 2013-14 2013 2014 Source: FОМ, VISA, Yandex, Gfk, Hermes NexTec Russia estimations, 2014 Credit cards Credit cards Cash Cash Other OtherElectronic money Electronic money
- 21. E-Commerce Players inRussia
- 22. Number of E-Shopsin Russia There are about 53 000 e-shops in Russia (2014) +7 % from 2013 95 % of them put all together have 10% of Russian e-commerce market Source: InSales, Data Insight, Hermes NexTec Russia estimations, 2014
- 23. TOP-10 E-Shops inRussia 2015 Source: e-shops / companies’ statistics, Hermes NexTec Russia estimations, 2014-2015 Physical goods only Millions of $, 2014
- 24. Ulmart vs. Amazon 2014 Founded2008 1994 Headquarters St. Petersburg, Russia Seattle, USA Geography Russia 15 countries Revenue, bln $ 0.85 88.99 Employees 6.5K 183.1K Share of domestic e-com, % 8% (Russia) 36% (USA) Revenue per employee, $ 131K 486K Website traffic, monthly 19.5M 1.5B Conversion rate, % 4% ordinary days 6% holidays 4% ordinary days 8% holidays Average order value, $ 122 47 Source: e-shops / companies’ statistics, Hermes NexTec Russia estimations, 2014-2015
- 25. E-Commerce Trends &Perspectives in Russia
- 26. E-Commerce Market VolumePerspectives Inflationary growth of Russian e-com Domestic e-commerce market: growth in rubles, stagnation in $ Outstripping growth rate of cross-border online sales (+50% YoY)
- 27. Cross-Border under Threat Lobbyismby domestic market players Cross-border regulations is likely to become more strict Political context dictates its rules Be safe. Be local
- 28. M-Commerce is Coming 10%of online shoppers purchase via mobile (e.g. 30% in US) More e-com mobile apps – more mobile shopping Share of mobile payments is 20% (1% in 2010)
- 29. Key E-Commerce Driversin Russia New Internet audience – new purchasers Deeper online – new style of life. A custom to buy online Convenient. Better price. Better choice Mobile shopping is a new trend in Russia No wide offline retail choice for many small towns in regions
- 30. E-Commerce market StructureChanges Domestic appliances & Electronics ↓, Apparel & footwear ↑ Other Sports Groceries Gifts Perspective segments: sports goods, groceries, gifts Due to the crisis luxury segment is shrinking
- 31. #1 European InternetAudience Russian Internet Audience is #1 in Europe already with high potential of further growth
- 32. New Purchasers: GrowthDynamics Every year the army of Internet shoppers in Russia becomes 20-25% larger.
- 33. Online Spend Trend Averageannual online spend per shopper in Russia grows due to the inflation (↓ in $) AOV of Internet purchase: growth in rubles, decline in $ Intensity of online purchasing is stable
- 34. Methods of PaymentsEvolution Even less cash than before, but still its the domination ¼ of payments are made by bank cards already Electronic money expands their share
- 35. Competitive Landscape: TheStrongest Survives For leaders it’s time to increase efficiency. Weak leave the market Offline business with online branches feel better than online shops There is no better time for international online retailers and brands to enter the Russian market via advantageous M&A deals No more cheap borrowed funds. Investments are on hold
- 36. Oleg Zhukov Head ofInternet Marketing Hermes NexTec Russia Oleg.Zhukov@hermesworld.com https://ru.linkedin.com/pub/oleg-zhukov/3/358/178 www.hermesworld.com