The new force behind the Russian economy is online shopping
We’ve been hearing arguments that the real growth behind Russia’s economy isn’t oil and gas, but good old consumer spending. A report in February by the Russian bank Sberbank says that by 2020, Russia will be Europe’s largest consumer market, as well as the world’s fourth biggest. Russians are relatively wealthy; Russia’s per capita GDP is closer to Western levels than it is to those of the other BRIC emerging economies.
But a data point from eBay brings home why retailers are scrambling to get into Russia, and to reach its massive population of internet users. “Today, Russian users place an order on eBay every three seconds,” Wendy Jones, eBay’s vice president of geographic expansion and cross border trade, said at an analyst day on March 27, whose transcript we recently came across. And more to the point is how fast Russian e-commerce is growing: Jones added that the more than $400 million Russians spend on eBay is 54% more than the year before.
Indeed, growth in online shopping is expected as the middle class expands in a country with more internet users than any other European country, according to Jones. EBay isn’t the only e-commerce company in the ring. Amazon has also opened an office in the country, though it is only selling e-books for now. Jones notes that Russia’s e-commerce market is fragmented sector, with 10 of the top e-commerce retailers making up only 20% of the market. A lot of shoppers may already be buying on eBay, but the company still has its work cut out.
Photo credit: AP Photo / Mikhail Metzel
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