1. E-commerce in Russia:Market overview Boris Ovchinnikov Fedor Virin Data Insight Research Agency

2. Agenda Market size Digital gap: capitals vs. regions Who are online shoppers? What do they buy? Market forecasts

3. Russian e-commerce market*reached $8bn. in 2010* B2C retail only

4. Market size Since autumn 2010 we see conformity in estimates* of e-commerce market size: $7-8 bn. whole market $5.5-6.5 bn. material goods * estimates byData Insight, Public Opinion Foundation, Insales, Chamber of Commerce and Industry

5. Online&Offline, Russia &World 14% of Russian adult population shopped online in 2010; e-commerce accounts for 1,6% of all retail sales These numbers are comparable to some European countries, but they are 3-5 times lower than the EU average or United States level

6. Online shoppers share Source:Eurostat;Data Insight

7. E-commerce as share of retail (2010) Source:Forrester; Centre for Retail Research;Data Insight

8. Some specifics of the market Fragmented market without strong leaders High significance of Yandex.Market price comparison service High significance of price factor Cash payments still dominate

9. Moscow &S.-Petersburg account for only 30%of Internet usersbutalmost 60% of e-commerce volume

10. Capitals vs. regions

12. Limited offer from online shops

13. Share of online shoppers is lower

14. Frequency of online purchases is lower

15. Online purchases are not diversified

18. E-commerce geography Russian e-commerce market split by macroregions

19. Leading cities Leaders in terms of e-commerce market volume:

20. Capitals vs. regions Despite current lag, regions will generate main growth for e-commerce in next years

21. Every month 7-8 mn. peopleare shopping online in Russia

23. Internet experience

24. Place of residence:capitals or regionsIf all three factors coincide, online shoppers share could reach 90% All 3 factors have a positive effect also on frequency of online purchases and on volume of online spending

25. Income as a shopping driver Obvious dependence: with higher income more people buy online Online shoppers share against monthly income capitals regions Source:Data Insightusing МАСМИ data

26. Experience as a shopping driver Share of online shoppers is also growing along with the growth of the online experience Online shoppers share against internet experience capitals regions Source:Data Insightusing МАСМИ data

27. How quickly users become buyers? Time gap betweenbecoming Internet userand becoming online shopper Source:telephone survey, 3200 respondents, Moscow & SPB, 04.2011 60% of online shoppers have made their first online purchase more than 3 years later than they got Internet access

28. Tickets and electronicsare two biggest piecesof Russian e-commerce market

29. What Shoppers Buy Online?

30. Where are the money? Purchases of more than 15 ths. roubles account for 15% of deals and63% of market volume. Expensive purchases are concentrated in six segments Distribution of purchasesabove 15K RUR (~$500) Source:telephone survey, 3200 respondents, Moscow & SPB, 04.2011

31. Market segments: capitals vs. regions High share of regions: books, CD/DVD, digital content, clothing & footwear Leadership of capitals: housewares, baby goods, portable electronics, computers, air & train tickets Dominance of capitals: household appliances, “black” electronics, food, concert tickets

32. Two groups of market segments

33. Russian e-commerce market will grow 2,5 times (+145%)in 5 years

34. Growth forecast Number of online shoppers will growfrom 14m in 2010 to 28m in 2015 CAGR 15% Market volume will grow from $8bn. in 2010to $18.5 bn. In 2015 CACR 18%

35. Growth factors Growth of Internet audience (+75% in 5 years) Growing online experience =>higher % of online shoppers, higher spending, higher frequency and diversity of online purchases Income growth (more money to spend)

37. share of online shoppers from regions will grow from 60% to 73%

38. e-commerce in regions will grow 2.9 times in 5 years, while in capitals it will grow only 1.9 times

40. Contacts Tel. +7 495 7254946 www.datainsight.ru Common questions: a@datainsight.ru Subscriptions for news monitorings: editor@datainsight.ru Fedor Virin facebook.com/fedor.virin luchiaen.livejournal.com twitter.com/#!/luchiaen Boris Ovchinnikov facebook.com/boris.ovchinnikov barouh.livejournal.com twitter.com/#!/barouh_boris