Morgan Stanley Report of Russian E-commerce

The market for e-commerce in Russia is growing rapidly. In January 2013 experts of Morgan Stanley held a large-scale study of Internet commerce in Russia and reflected in the results of some very interesting data that we present in this article.

According to forecasts of Morgan Stanley, in 2015 the Russian e-commerce market will grow by 35% to reach 4.5% of total retail sales in Russia. To date, the share of e-commerce accounts for only 2% of the Russian retail market, while the average share in the west is 6.5%.

The volume of e-commerce market in 2012 is estimated at $ 12 billion (representing 1.9% of the $ 670 billion retail market in Russia). Similar figures share online retail (2%) have been reported in the United States and the United Kingdom in 2003 and 2005. The penetration of e-commerce in the BRIC countries is also ahead of Russia: in China and Brazil, the figure is about 5%.

The share of e-commerce in Russia and other countries

The share of retail e-commerce in different countries.

The key drivers of the market is the penetration of high-speed access to the Internet and the increasing spread of banking cards. The main barrier is the growth of e-commerce logistics, a relatively small middle-income households, as well as a nascent culture of online payments (90% b2c orders are paid by cash on delivery).

Despite this, Russia is considered a contender for the title of one of the fastest growing markets in the world. Experts predict a rise in the penetration of e-commerce in 2020 to 7%, and the size of the market – up to 72 billion dollars.

Forecast growth in volume and share of e-commerce in Russia

Forecast of the volume (in billions of rubles.) And market share of e-commerce in Russia

Moscow and St. Petersburg is a unique city for e-commerce in Russia – sandwiching 15% of the population, they account for about 60% of e-commerce due to the significantly greater penetration of high-speed Internet access, a higher average income, and significantly higher quality logistics infrastructure. According to the forecast of Morgan Stanley, in 2020 online sales in these cities will grow by 30%, while in the rest of the average growth of 55%

Distribution of sales by region Russia

Predict the distribution of sales over the Internet in the Russian regions.

Despite this, experts say that the behavior of online shoppers is nearly identical to Western, but with a lag of several years. The results of a survey of several thousand people were making purchases on the Internet showed:

64% of online shoppers Russia – women between 18 and 39 years old with an average income per household is above 30 thousand.
The main reasons for shopping on the Internet, they find lower prices (47%), time savings (36%), convenience (33%).
48% of users have made their first purchase on the internet for the past two years. In addition, 63% of Internet users bought something online in the past 12 months (vs. 85% in the U.S.).
The average duration of the “experience” of online shopping in Russia – 3 years (versus 8 years in the U.S.).
54% of those who did not make purchases on the Internet in the last 12 months, expressed the need to see and touch the product before the purchase (versus 38% in the U.S.).

However, the Russian e-commerce market has its own unique features. For example, ease of delivery of the order at home is one of the most common reasons for purchase in the U.S., but only 19% of buyers in Russia have found it an advantage. At the same time, 27% of shoppers say that the reason for the order on the Internet is not much choice in the offline stores.

Morgan Stanley Report

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