Cross-Border Internet Trade in Russia

E-commerce in Russia is booming! As reported by the Russian Association of Internet Trade Companies (AITC), Russian e-commerce turnover amounted to about 14.5 bn euro in 2016, which is a growth of about 21 per cent in comparison to the previous year.

 

Cross-Border Trade

A third of the mentioned volume of internet trade belongs to cross-border trade. Russians spent about 497.4 mln euro on products from abroad. This is an increase of 37 per cent in comparison to 2015. Among the favourite products purchased by the Russians were electronic devices, household appliances, shoes and clothes. A total of 233 mln international parcels containing ordered goods were delivered to Russian customers in 2016, and this number is expected to rise to 400 mln in 2017.

All goods in cross-border parcels are considered in Russia as goods for personal use. Therefore, they are not subject to VAT or any other fees if their total cost does not exceed 1000 euro or their total weight is under 31 kg per person per year.

Russian Post remains the largest carrier of the goods purchased online. Furthermore, it has recently begun cooperation with international carriers such as German DHL Group and the US Fedex with the aim of facilitating the cross-border trade.  

As can be seen from the chart, ninety per cent of all goods were purchased by Russians in China. Europe and the USA performed weaker in quantity (4 and 2 per cent accordingly):

  graph_1_sourcing markets-e-commerce_Russia

However, the share of Europe and the USA in monetary terms was much bigger – 23 per cent for the EU and 12 per cent for the USA – due to a relatively low average bill of Chinese goods:

 graph_2_online_trade_Russia

According to forecasts, Russian online trade turnover is supposed to reach about 17.5 bn euro in 2017, of which about 6.3 bn euro could belong to cross-border trade.

Significant increase in budgets for digital advertising

Along with the growth of the internet trade, digital advertising flourished in Russia in 2016 as well.  As stated by the Interactive Advertising Bureau (IAB) Russia, average expenditures on digital advertising grew about 20 per cent faster than on offline advertising. Among the most frequently used instruments of digital advertising were search engine and banner advertising, targeted and mobile ads. Further growth of the Russian digital market is forecasted for 2017, with display, mobile and video advertising as the leading performance channels.

 

 

 

 

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