Russian e-commerce market at ''inflexion point''
Morgan Stanley analysts expect the Russian e-commerce market of physical goods to grow almost threefold in the next five years. As Russians are becoming ''mature'' Internet users, the experts forecast the emergence of a dominant online retailer by 2020.
The Russian e-commerce market for physical goods will grow from last year's $18 billion (1,040 billion rubles) to $31 billion by 2020 and may reach $52 billion by 2023, says East-West Digital News citing a report released by Morgan Stanley last month. Currently, e-commerce has a mere 3% share in Russia's total retail despite high penetration rates of the Internet (80%) and smartphones (66%) in the country. As the report's authors believe there is a clear link between the number of years spent online and the willingness to transact online, they claim that Russia is reaching a critical mass of ''mature'' Internet users, which is driving a rise in the number of transactions online.
''Russia is the last major emerging market without a dominant online retailer. Russia is at an inflexion point,'' reads the report. The experts predict the emergence of ''a leader being worth $10 billion'' by 2020. The market is likely to develop according to a Chinese scenario (a marketplace model), with two key players aiming for leadership. The first one is Yandex, which has teamed up with Sberbank last year to create a huge e-commerce platform named Beru. Given Sberbank's huge client base and outlet network and Yandex Market's multimillion audience, the project, which is currently in its beta version, has every chance to succeed. In addition, Yandex Taxi's 400 million drivers may act as potential delivery agents for the enterprise, assume the analysts.
The other potential leader is an alliance of Mail.Ru Group and Chinese Alibaba Group. In September, the companies announced their intention to launch a global platform for e-commerce, social communications and gaming. The Chinese partner's B2C subsidiary AliExpress is the leader of the Russian cross-border e-commerce market. Its strong position joined with the audience of Russia's leading social networks Vkontakte and Odnoklassniki, which belong to Mail.ru Group, will give the project strong impetus.
Morgan Stanley estimates that a future leader may control up to 60% of the market under a marketplace model, but it will have to provide suppliers with favourable financial conditions and make considerable investments in logistics. At the moment, the top four e-commerce companies in Russia account for only 27% of the market. One of them, Ozon.ru, can become ''a credible challenger to Yandex and Mail'' thanks to developed logistics and its strong backers, consider the analysts. Besides, several major players (Eldorado.ru, Lamoda.ru, MVideo.ru, Wildberries.ru) are analysed very superficially, and some are even ignored (Citylink.ru, DNS-Shop.ru) by Morgan Stanley's report, note East-West Digital News, adding that their role may have been underestimated.