Cross-border B2C E-Commerce grows in Russia amidst regulatory change

Posted on: B2C E-Commerce | Blog on December 21, 2015

B2C E-Commerce in Russia is forecasted to continue rising, despite the economic downturn in the country. The majority of forecasts remain optimistic, with most expecting the period from 2016 onwards to bring significant growth. Cross-border online shopping is one of the main drivers of B2C E-Commerce in Russia.

The share of cross-border online retail as part of total E-Commerce in the country increased to nearly one third in 2014, from below one fourth a year earlier. Also this year the growth rates of cross-border sales in Russia dramatically outpaced those of local retailers. The main reason motivating online shoppers to purchase items from abroad remains the same – cheaper prices offered by foreign merchandizers, especially those located in China.

This rising demand left a clear stamp on all cross-border E-Commerce statistics, with both the number of orders and number of parcels imported from China to Russia in the past few years rising at triple digit growth rates, compared to growth of below +50% for online retailers located outside of China, such as eBay. Meanwhile, the comparative value of orders placed on Chinese websites in 2013 and 2014 remained stable, while that of their Western counterparts slightly increased. This latter trend is likely to be reversed due to decreasing value of the Russian currency.

The rapid B2C E-Commerce developments have sparked the need for regulatory changes in mid- and late 2015, both in the area of cross-border sales and consumer protection. One initiative proposed by the Russian government to the members of the Eurasian Economic Union involves introducing charges on cross-border orders valued at over EUR 22, compared to a personal monthly tax-free parcel threshold of EUR 1,000 which is currently in place.  Proposed to be discussed in November, the initiative has been postponed due to opposition from the other parties in the Union.

With cross-border, mobile and online shopper penetration rates on the rise, the Russian market is likely to retain its dynamics in the near future.  More information about the trends and developments of B2C E-Commerce in Russia can be found in our report “Russia B2C E-Commerce Market 2015”.

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