Russian cross-border e-commerce growing exponentially, cross-border, russia, russian logistics, russian chinese trade, sino-russo trade, sino-russo online retail, internet retailing,

Russian cross-border e-commerce growing exponentially

Russian cross-border e-commerce exploded in 2015

Whilst it is getting increasingly difficult for Russian business and logistics service providers to access European markets, evidence of the so-called ‘eastern-pivot’ are more pronounced.

It is not just the mega amounts of cash the Chinese are pumping into Russia infrastructure projects like high speed rail links, oil and gas extraction projects. Russian consumers are turning towards the world’s second largest economy for deals from Chinese retail websites. Chinese e-commerce market and logistics businesses are winning as they satisfy a need amongst Russian buyers to supply inexpensive goods and deliver to the door. The only loser appears to be western online retailers who are unable to match price with the rapid reduction in value in the ruble.

In 2015 30-million Russian shoppers spent $10.5 billion online, 2% of the total Russian retail market. This is huge potential for those companies who can deliver the right experience. Compare the 20% e-commerce market penetration in Czech, Germany, Switzerland and the United Kingdom and you can appreciate why Russian giants of e-commerce like KupiVIP, Lamoda, Ozon, and Ulmart have invested in their own logistics network rather than subcontract to established carriers like DHL et al.

$9 billion per year e-logistics.

An e-retailer operating an in-house logistics operation is not original but logical if you have the volume and the vision to see Russian logistics as a competitive advantage.  A successful parcel delivery business depends on volume. Why give that away to a potential competitor?

UK’s Shop Direct Holdings have cross ownership through shareholders Barclay Brothers with Yodel, a business model the catalogue industry has practised for years. Amazon operate air charter flights carrying thousands of packages in its own European and US airfreight business.

Despite investment by KupiVIP, Lamoda, Ozon etc., international cross-border retailing is the fastest-growing segment in Russian e-commerce. Foreign retailers’ online sales of physical goods to Russia have exploded in the last 3 years: 40 million packages at $1.3 billion in 2013 to 135 million packages and small parcels at $3.4 billion in 2015.

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In 2015 Russian online orders for Chinese goods grew from 45% to 72% of all overseas purchases.  According to Russian Post own statistics, China dominates providing Russia with 80% of all its online retail deliveries.

Russian consignments per recipient under 31 kilos and €1000 per month are duty-free. If that threshold is exceeded customs duty is 30% of the value plus €4 per kilo.

Customs and delivery delays have reduced for international online purchases and an “average” consignment will be delivered between China and Russia within 10-days.