Morgan Stanley analyst says Russian e-commerce market will grow 170% over the next 5 years

According to Morgan Stanley’s report, the market for Russian e-commerce is showing positive growth momentum.

The Russian e-commerce market was worth 13.7 billion euros in 2017 and is expected to rise to 17 billion euros in 2018.

By 2023, the Russian e-commerce industry is expected to grow to about 46 billion euros, meaning the Russian e-commerce market will grow by 170 percent over the next five years.

It is well-known that Russian consumers like to spend a large part of their disposable income on things they buy. In other words, there is a huge consumer group here.

According to Morgan Stanley analysts, Russia’s e-commerce industry is the last major emerging market without a leader, however, it is already in a “transmutation” transition period, and it is predicted that by 2020, the Russian e-commerce market will have a leader with “worth more than 8.5 billion euros”.

<strong>E-commerce retail accounts for just 3% of the retail market</strong>

Throughout Russia’s retail industry, e-commerce retail accounts for only 3% of the total retail market,the development of e-commerce market has not had a profound impact on the Russian retail industry.

But on the other hand, Russia’s internet penetration rate is as high as 80%, and smartphone usage has reached 66%. Analysts believe that the Russian Internet development has been relatively mature, the number of users is reaching the threshold, which will bring more impetus to the development of the Russian e-commerce market.

Of course, the factors driving the development of the Russian e-commerce industry are not only the consumers ‘ willingness and quantity of net purchase, some e-commerce companies have received large amounts of money from private enterprises and government departments in the past few years, and this trend will continue, which is beneficial to the development of Russian e-commerce.

“More money will help retailers overcome business pain points more effectively (such as delivery costs), shorten delivery times and improve overall consumer shopping experience,” Morgan Stanley predicts. on a larger scale, more money will benefit e-commerce companies and the market.”

Payment and logistics are the two biggest difficulties in the development of Russian e-commerce. E-commerce entities in the transaction of goods, 80-95% payment using the delivery method,e-commerce platform must prepare the advance payment mechanism in advance to cope with it.

Direction of Russian e-commerce booming

Morgan Stanley believes that the development of Russian e-commerce may follow the Chinese model.
They believe that companies wishing to become the market leader in Russian e-commerce must develop platform models, invest in logistics, and provide financial support to sellers.

It is worth noting that the Russian climate is characterized by a long and cold winter, so every winter to Russia, warm hats, scarves, gloves, clothing is essential, women are particularly keen to buy animal fur coats.