Wildberries, Russia’s leading e-commerce player (nearly $1.8 billion in revenues generated in 2018), has plans to enter the EU market via Slovakia, the RIA news agency reported, citing company founder Tatyana Bakalchuk. The statements were made at a bilateral Russian-Slovakian government meeting on Sept. 27.
Wildberries eyes Central and Eastern European (CEE) countries as an entry point to the EU “due to their cultural affinity” with Russia. The company may invest €200 million euros over five years to build “a central hub” of some 300,000 sq.m. in Slovakia. The investment program and first sales are planned to start this year, according to Wildberries, which is discussing the plans with the Slovakian authorities.
Wildberries is the first Russian online retailer to announce such ambitious international plans. While cross-border sales to Russia already account for billions of US dollars every year, Russian e-merchants have essentially focused on their domestic market so far and made few attempts to sell abroad. (See EWDN’s latest industry report.)
One of the rare examples of significant outbound cross-border sales is that of Ozon.ru, whose products are popular among Russian-speaking communities in the USA, Israel and other countries. However, Ozon has no in-house logistic infrastructure outside Russia.
Widlberries’ positioning in terms of assortment on the EU market is not known yet. Wildberries is unlikely to focus on Russian brands, since just a few of them – like Natura Sibirica and Splat – enjoy traction in Europe, notes EWDN e-commerce expert Vlad Shirobokov.
“The Russian consumer goods industry remains little developed, but in addition to some successful brands there is a potential with individual entrepreneurs; and Wildberries has learned to work with them efficiently, which is not always the case of e-commerce companies in the West,” believes Mikhail Burmistrov of Infoline Analytics.
Russian e-commerce is growing at an annual rate of around 20%. In 2018, domestic sales of physical goods reached around $18 billion, while inbound cross-border sales amounted to $5.5 billion, according to Data Insight ($3.24 billion according to Russian E-Commerce Association).
