Russia's Backward Logistics Infrastructure

The prices of goods in Russian stores are much higher than those in online stores, and more and more people are keen on online shopping. At the same time, Russia has limited choice of domestic products, and many people are eager to find better products in foreign websites. Therefore, Russia's cross-border online shopping groups are growing.

The scale and influence of Russia's local e-commerce website is relatively small, and has yet to achieve a great climate. After the localization of foreign companies such as eBay and speed sell, the latter became the most influential contender in the Russian electricity supplier field.

According to recent reports, Russia's research firm Data Insight revealed that in 2013, Russia's total electricity market revenue amounted to $165 billion, equivalent to 2% of the total retail market, while consumers in St Petersburg and Moscow accounted for 30% of the total number of Russian Internet users, but their online shopping accounted for 60%.

In the Russian electronic commerce research report released by "East and West digital news", in 2013, about 30 million of Russia's consumers went online shopping, accounting for 23% of the total population over 18 years old. The Russian e-commerce market was mainly composed of small companies, scattered and not systematic. At present, there are about 39000 e-commerce sites (online stores), but there are no more than 20 revenues per year exceeding US $100 thousand. Nevertheless, the Russian electricity supplier market has great potential and is developing at an annual rate of 20%.

In the Russian market, almost all goods are more expensive than Eastern Europe and the United States, because Russia has not paid enough attention to consumer goods production for many years. In terms of e-commerce logistics, Russian post plays a major role. It is a state-run mail company, notorious for its slow delivery speed. Yes, foreign e-commerce sites have huge commodity price advantages over Russian local e-commerce networks, but they rely on Russian post to deliver goods at a slow pace. In contrast, Local electricity supplier The website has built its own distribution center or transported convoys, which deliver faster and cost less.

Russia's local electricity supplier did not become a major climate

Most of Russia's e-commerce sites have less scale and influence, two of which are Ozon and Ulmart. Ozon is known as Russia. Amazon As many as 3 million items were sold, and in 2013, the revenue amounted to US $700 million. Ulmart sells 55000 items, including computers, household appliances and household appliances, with a revenue of 1 billion 200 million US dollars in 2013. Ulmart has its own distribution fleet, up to 90 trucks, and has built logistics infrastructure in Moscow and St Petersburg. Ozon services throughout Russia, while Ulmart mainly serves big cities.

Express companies play an important role in the Russian electricity supplier market. When drivers send online shopping products to the door, they will patiently wait there to let customers try their clothes to fit and whether the appliances are working properly. If there is no problem, the customer pays the bill in cash. Russia also has online payment tools. But payment tools like QIWI wallet are mainly used to settle water and electricity charges. However, according to the current trend, it will eventually penetrate into the electricity supplier field.

　　 EBay In 2013, the Russian website was launched, and at the same time, it was granted the Russian government's permission to use its own payment service system PayPal. Russian people can either buy things on eBay or sell things there. At the beginning of this year, the China electricity giant Alibaba group also launched the global express Russian station. Data from research firm TBS showed that in a few months, fast selling became the most visited e-commerce website, reaching 16 million visitors in July.

Online shop prices are two or three times cheaper than physical stores.

There is no doubt that Russian online shoppers are very young, well-educated, and have higher incomes and higher tastes than ordinary Russians. Clothing, shoes and accessories are hot selling products on the Internet. Although the main shopping malls in the main city are selling designer clothing, the price is double or even three times the price of the Internet. The same is true of beauty products, because online prices are much cheaper than physical stores, so they sell well. Online shoppers are willing to wait for weeks to buy cheaper things on the Internet, or even risk being unable to get them.

Electronic products, including apple phones, are also selling products online, and household products occupy a large share of the market. Besides, Russians like to repair cars by themselves, so auto parts sell well. Other hot products include baby diapers, toys and so on.

Although Russia has broad prospects for e-commerce, it has encountered some obstacles: lack of professional talents, lack of professional talents in IT, marketing, logistics, inventory management and so on. Backward infrastructure, high logistics costs in some remote areas, and the volume of venture capital in Russian electricity supplier has declined, from 360 million US dollars in 2012 to 235 million US dollars in 2013. Many e-commerce sites need a lot of money to optimize websites and improve logistics infrastructure.

Overall, Russia's e-commerce is facing greater obstacles than India and China. However, Russian domestic consumers have great demand for foreign high quality goods.

At present, those who are shopping abroad are mainly Russians with higher education level, because only they can cross the language barrier and know how to use the wired payment tools.

In the long run, if Russia establishes a more reliable and cheaper logistics distribution system, and at the same time, foreign sellers can realize localization operation of the website, the prospect of Russian electricity supplier market is considerable.