Earlier this month in Moscow East-West Digital News with is partners industry association NAMO, Chinese platform OSell and US publication Internet Retailer held the first China-Russia E-Commerce Summit.
The conference started with a presentation of the key figures and trends of this fast-growing market. Last year Chinese online retailers and marketplaces accounted for at least two thirds of Russian consumers’ orders on international sites and one half of Russia’s cross-border e-commerce market in value, said EWDN chief editor Adrien Henni (see presentation).
In total the Russian domestic e-commerce market was estimated to be worth $14,5 billion (taking into account physical goods only), with the cross-border segment reaching at least an additional $2.5 billion, Henni continued. “In the middle and long term Russia, which already is number one in Europe in terms of Internet users, is bound to become one of the largest e-commerce markets in the continent as well,” he believes.
For the moment, just one third of Russian Internet users have made online purchases, explained Fedor Virin of Data Insight, compared with two thirds or even more in advanced markets.
Alexander Ivanov, president of the National Association of Mail Ordering (NAMO), offered an estimate of this year’s figures: “In 2015, the total number of e-commerce parcels and packages including both domestic and cross-border deliveries – which amounted to 235 million last year – may decrease due to the contraction of the domestic segment, while the cross-border segment will increase to 120 million, compared with 70 million in 2014.”
The logistics problems caused by the significant growth of e-commerce flows from China to Russia as well as their possible solutions were abundantly discussed by top executives from the Russian Post as well as its competitors CDEK, IML, PickPoint, and SPSR Express.
The speakers noted that the delivery conditions from abroad – China in particular – have improved dramatically over the past few years. Delivery from China via regular postal channels used to take up to two months a couple of years ago, if they ever reached the customers. Today shipping companies deliver parcels in a matter of days, while the Russian Post has recently announced it will reduce delivery time to seven days.
Russian export soon a reality?
Also discussed were the prospects of selling Russian goods to Chinese online consumers. Pioneering this market is Russian e-commerce site 220 Volt, whose CEO Alexey Fedorov described his company’s commercial activities in China. He noted that the Chinese quality requirements for online sales are very high, sometimes even higher than in Russia.
Victor Xu, President of JD.com’s international business group, underlined the huge scale of the Chinese e-commerce market. Demand for quality goods is high, while Chinese consumers’ purchasing power is on the rise. Such factors may create substantial opportunities for Russian e-commerce companies willing to enter the Chinese market, Xu said.
“Russian sellers are welcome to trade via JD.COM,” he added.
Ekaterina Barvalina of the Russian Ministry of Economic Development said that the government is taking steps to simplify customs procedures and reduce the related costs to export small packages as soon as next year.
Such measures are likely to stimulate Russian players selling abroad, said Alexander Ivanov, who believes the number of parcels and packages sold abroad by Russian online retailers could “grow from currently 0.7 million to 15 million per year over the next three years, should they reach their full export potential.”
Among the top experts and players participating in the discussions were Alexey Maslov, Ph.D., of Moscow’s Higher School of Economics, Alexey Fedorov of 220-volt.ru, Ekaterina Barvalina of the Russian ministry of Economic Development, Alexander Ivanov of industry association NAMO (moderator), David Sneddon of Google, Victor Xu of JD.COM and Mark Zavadsky of Alibaba.
Some Chinese businessmen came from as far as Shanghai to attend the event.
The event also featured an unexpected dance show.
