A new report by Hamburg-based secondary market research company yStats.com highlights the development of online retail in the CIS countries. The publication, titled “CIS B2C E-Commerce Market 2015”, covers the major markets of the country group, including Russia, Kazakhstan, and Ukraine, as well as smaller emerging markets such as Belarus, Azerbaijan, Armenia and Uzbekistan. yStats.com’s CEO and Founder, Yücel Yelken, reveals that “despite the current economic downturn, these countries’ potential for B2C E-Commerce growth in the long term persists, as online still accounts only for a small share of total retail sales among them”.
B2C E-Commerce is in early stages of development in the majority of the countries in the Commonwealth of Independent States (CIS). In the most advanced of the online retail markets in this country group, Russia, B2C E-Commerce still accounts for less than 5% of total retail sales. This indicates that with support of the rising Internet and online shopper penetration and increasing use of Internet-enabled mobile devices, B2C E-Commerce sales in the CIS markets can be expected to grow further, despite the current economic downturn challenging many of the region’s countries.
Russia is the leader in CIS in terms of B2C E-Commerce sales, followed by Ukraine and Kazakhstan. In local currencies, online retail sales in these countries have shown strong double-digit growth rates over the past two years, with Kazakhstan leading the pack in terms of growth. The rise of mobile commerce is a common characteristic among those markets, together with the popularity of the clothing and shoes product category, purchased by more than 50% of online shoppers in Kazakhstan, close to half of online shoppers in Russia and over a third of online shoppers in Ukraine in 2014. Of these three markets, only in Ukraine was clothing topped by electronics as the product category most purchased online.
In Belarus, B2C E-Commerce is also developing rapidly. According to some official surveys, around half of Internet users already made purchases over the Internet in 2015. Other CIS countries, such as Armenia and Azerbaijan, cannot boast such online shopper penetration rates, but likewise they are expected to see rapid growth of online retail off a low base.
As B2C E-Commerce continues to evolve, prominent local market players have emerged. Some of them, such as online clothing retailers Wildberries and Lamoda operate in several of the CIS countries. The home-grown B2C E-Commerce companies in these markets, however, are challenged by the growing popularity of Chinese E-Commerce websites. Both Aliexpress.com and JD.com have opened websites targeting Russia, while also in other CIS markets many users browse these websites in search of the best prices.