Today, perhaps, left products and services that are not available online. Through the Internet you can order anything from pizza and a new phone before the wedding or call doctor. The volume of Internet trade are the envy of most other industries in the Russian economy. 22 per cent plus in the last year alone and, according to experts, in the next 5-7 years, its pace does not expect much to slow.
Our country is the market No. 1 in Europe, the spread of the Internet, and the number of online shoppers. Remember, Russia’s population of nearly 147 million people. And according to the research company Mix Research, 44% of them buy online.
It is clear that a number of demand not only stimulates the development of domestic Internet-shops and online services, through which Russia went to tens of thousands, but also attracted foreign chain retailers. Increased competition. Increase the costs. And the income of potential buyers to grow not in a hurry. Therefore, more and more projects in the field of electronic Commerce, even large and well known, go with the race route for the buyer.
One of the major cost items for online retailers is the logistics. Pick up the goods in the warehouse of the manufacturer, to sort, to store, to pick up the goods, arrange shipping, returns. How to organize the process efficiently and profitably?
Let’s try to understand this together with our expert Giorgi Elikashvili, the General Director of group of companies PONY EXPRESS. This logistics operator is now a partner of more than 700 Russian and foreign online stores:
“E-Commerce in Russia began its development in different economic reality. Few thought about the translation of fixed costs into variables. The rapid growth gave the opportunity to the online stores to have its own fleet of vehicles and a permanent staff of couriers. Now the situation has changed. And we are seeing more and more small online stores, but major online retailers abandon their own logistics in favor of outsourcing. We see growing demand in service fulfillment, when all logistics processes in the e-Commerce does logistics partner.”
Well-organized logistics, of course, an important competitive advantage. It gives the opportunity to reduce costs. But what can help increase sales? No matter what city is not working online store, a geographically secluded market is always finite. Yes, there is a own well-established loyal client base, there are certain sales volumes. But in order to thrive, you need to enter new markets.
Recently, eBay Analytics and Data Insight published a study on the proportion of annual sales growth Russian Internet sellers abroad. According to these data, in 2016 the Russian Internet-stores was sent abroad 7.9 million parcels. This is 22% higher than a year earlier. The average check amounted to $ 55. Two-thirds of this amount (4,9 million parcels) went to foreign offices of major retailers taking orders using local domains ( such as KupiVIP or Ozon). And third were the sales of small online stores.
More than half of the orders sent abroad, small and medium-sized online shops, account for sellers of the regions. Given that the Russian domestic market is very centralized, it can be argued that retail exports is a promising channel for regional players, say in Data Insight.
And the head of the Russian eBay Ilya Kretov and all claims that under favorable conditions, online exports could grow by more than 25 times.
George Elikashvili in these studies no doubt.
“Yes, there were skeptics who did not see opportunities for online exports. But we were never one of them. So for several years actively developing its logistics base abroad. Opened a logistics terminal in Europe, in Riga, where customs clearance and handling of goods of our customers, including online stores. Representative offices of PONY EXPRESS in the post-Soviet countries, with which Russia traditionally associated trading relations. We see that stream online export increases every year, as the demand for logistics services to make delivery of goods from Russia abroad. Indeed, in the development of the retail export without quality logistics platform can not do. There are real cases when using the logistics services of the PONY EXPRESS, our partners have expanded the geography of sales and increase profit. And these large online retailers and small shops, assures Elikashvili. For example, we have become partners of the company KupiVip in Kazakhstan and has provided not only the delivery of goods throughout this country, but organized the results of the products in our Kazakhstan Express centres the opportunity to try on, organized business through its own contact centre, and provided a quick and quality logistics of returns. As a result, we and our partners managed to achieve figures of redemption at 95%, which is the highest rate in the industry. Or an example of cooperation with the small Internet shop of cosmetics from Tver. The company has established sales to Azerbaijan. This country in the customs Union is not included. But since we have an office there, we provide the partner’s shipping and warehousing, but the service of customs clearance of goods. So the export is and I am sure that in coming years its volume will increase at double-digit pace.”
If we talk about what the Russian goods interesting to overseas buyers, based on eBay Data Analytics and Insight 40% of the export flow is clothes and shoes. In addition, over the border from the Russian Internet shops order the goods for the house and interior, electronics, books and games, auto parts and cosmetics.
As with any market in e-Commerce today is committed to globalization. And we see that the Russian manufacturers and sellers of today have every opportunity to occupy a niche in the market of global e-commerce.