Illustrating the importance of online cross-border commerce in Russia, the Chicago-based company BayRu, which helps consumers from Russian and neighboring countries place orders from foreign online retailers, announced last week that it has opened a representative office in Moscow.
Many Russians make online purchases from international giants eBay and Amazon or from more specialized retailers offering products that are either unavailable or far more expensive on the domestic market.
The purchase-abroad segment represents at least 6% to 7% of the overall volume of the Russian online retail market – some $600 to $700 million, according to Data Insight, a Russian consultancy specializing in online retail.
But e-commerce has not abolished borders. The Russian customs service applies import rules very strictly, which may create complications ranging from increased delivery time to outright parcel return, industry players say.
Another barrier is language: product descriptions and ordering procedures on most foreign sites are not translated into Russian. Other major issues include counterparty/seller trust, payment convenience, and returns management.
BayRu and like sites offer a Russian language interface and local payment methods to make international online shopping easier. They also ensure that parcels are properly prepared to meet customs procedures.
Founded in 2007 by a young Russian immigrant, BayRu was the first mover on this market. Now enjoying an “explosive growth,” according to CEO Aaron Block, the company offers the largest Russian-language browsable online catalog, with over 200 million items. It guarantees delivery and charges to its customers a fee of 9% of the order value for its services.
“Among the most popular categories are auto parts, fashion, electronics and collectables,” Maxim Andryukhin, head of BayRu’s Russian office, told East-West Digital News. “We also see very specific items – the most surprising one a jacuzzi for 9 persons.”
Andryukhin anticipates that BayRu will process about 200,000 orders this year. The company’s Russian office will focus on business development, marketing and PR, working closely with logistics partners and customs.
Among BayRu’s competitors are ebaytoday.ru, which also specializes in delivery to Russia, as well as Shipito, Borderlinx and BongoUS, which operate internationally.
- RUSSIAN E-COMMERCE REPORT 2012 – The total volume of Russian online retail reached 310 billion rubles, a little more than $10 billion, in 2011, up 25% from the previous year. EWDN’s research study of Russian e-commerce, which includes a chapter on cross-border sales, will be available in April 2012. To receive free insights or to order the full version, please contact us at [email protected].
