E-commerce market in Russia 2015: facts, figures, international comparison, trends & perspectives

1. E-Commerce Market in Russia 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 2010 Hermes 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 Market Overall

6. Economic Crisis Affected Russia 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 Market Size (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 Domestic Market 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 #4 E-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 Market Structure
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-Commerce in Total Retail Sales 2014-2015
Source: Hermes NexTec Russia estimations, Centre for Retail Research, 2014-2015

12. E-Commerce Audience in Russia

13. Army of Internet Users (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 Online Shoppers (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 Shopping Online
Source: Hermes NexTec Russia estimations , Eurostat, E-Commerce Europe, Centre for Retail Research, FOM, 2014-2015

17. E-Shoppers Geography by Regions
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 Online Spend 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 Online Purchase & 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 of Online 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 in Russia

22. Number of E-Shops in 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 in Russia 2015
Source: e-shops / companies’ statistics, Hermes NexTec Russia estimations, 2014-2015
Physical goods only
Millions of $, 2014

24. Ulmart vs. Amazon
2014
Founded 2008 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 Volume Perspectives
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
Lobbyism by 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 Drivers in 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 Structure Changes
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 Internet Audience
Russian Internet Audience is #1 in Europe already
with high potential of further growth

32. New Purchasers: Growth Dynamics
Every year the army of Internet shoppers in Russia
becomes 20-25% larger.

33. Online Spend Trend
Average annual 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 Payments Evolution
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: The Strongest 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 of Internet Marketing
Hermes NexTec Russia
Oleg.Zhukov@hermesworld.com
https://ru.linkedin.com/pub/oleg-zhukov/3/358/178
www.hermesworld.com