The market of goods being sold from Russia to foreign customers is already significant, PayPal Russia’s Head Vladimir Malugin said in a recent interview with The Moscow Times.
This market was worth about $2 billion last year, up 32% from 2015, according to a research conducted jointly by PayPal and the Data Insight agency.
Digital goods make up 44% of the market, while travel accounts for another 27%. Physical goods account for some 23%, but are the most dynamic category, growing at 120% year on year, Malugin said.
In comparison, cross-border sales of physical goods from international sites to Russian consumers exceeded $4 billion last year, according to industry data cited in EWDN’s e-commerce report.
“Interestingly enough, the products that are exported most from Russia are not the ones you would expect,” notes Malugin, who cites sunglasses, wedding dresses and cases for go-pro cameras as being more frequently exported than matryoshkas and samovars.
Breakdown of Russian companies’ online sales to foreign consumers in 2016
As estimated in September 2016 by Data Insight and PayPal
Aficionados of Russian goods and services live mainly in North America (44% of Russian exports), followed by Western Europe and then by Asia and the Pacific. it’s not necessarily Russian speaking people that are buying from Russia. In fact, buyers are people of all nationalities who are satisfied with the quality, the price and the offer being made. More than 50% of people online today don’t necessarily care about which country the goods are coming from, as long as all the other factors are right for them.
“It’s not necessarily Russian speaking people that are buying from Russia,” says Malugin, who believes that customers of all nationalities may be satisfied by Russian e-merchants in terms of quality, price and offer.
Most online exporters are young companies: 60% have launched their business less than three years ago. Seventy percent of these companies are based outside of Moscow and St. Petersburg. For these businesses, “international recognition is more difficult, and the lack of experience is an obstacle,” says Malugin.
To help these companies, the Russian Export Center, a government-backed organization, agreed on a joint program with eBay earlier this year. Not only will these sellers have their goods featured on eBay, but the company’s Russian staff also provides them with free consultations about how to start selling and promote offers via the platform. Russian sellers will also benefit from eBay’s technical support to launch their own online store.
Small e-merchants making PayPal one of their payment options also benefit from PayPal’s Buyer Protection Program and Seller Protection Program.
“The trust factor is important, and that’s where we can come in. By working with PayPal, a Russian merchant can gain the trust of global consumers,” Malugin claims.
