Online trading is moving to the regions
In 2023, the volume of online sales in Russia grew by almost a third and reached 6.4 trillion rubles, the Association of Internet Trade Companies (AKIT) reported. It is curious that the regions of the South of Russia, Siberia and the Far East have become leaders in terms of volumes of online purchases, increasing turnover by almost half and pushing aside the traditionally more “advanced” metropolises – Moscow and St. Petersburg. “MK” found out the latest trends in the online trading market and its risks from experts.
According to AKIT, the volume of online purchases in our country grew by 28% over the past year. The total share of e-commerce in retail sales has reached almost 14%. The vast majority of it comes from online trading within Russia. Cross-border transactions accounted for only 3.1% of total transactions. According to the head of AKIT Artem Sokolov, the regions have become the driver of the development of e-commerce in our country, and megacities and federal cities have almost reached their limit in this regard. Thus, in 2023, the volume of the online market in the South of Russia, Siberia and the Far East increased by more than 40%, while in Moscow, St. Petersburg, and the Moscow region there was an increase of only about 10%. The top five most popular items purchased online among Russians included digital and household appliances, furniture and household products, clothing and footwear, food, as well as cosmetics and health products.
Meanwhile, debate about whether online retail will ultimately win over brick-and-mortar stores continues to rage. Thus, according to Artem Tuzov, director of the corporate finance department at IVA Partners, the transition of Russians to online shopping is a long-term trend that will not change. After the 2022 pandemic, which gave impetus to the development of e-commerce around the world, logistics has changed so much that buying goods online with delivery to almost anywhere in Russia is more profitable than purchasing the same products in a regional store. “Retail trade in durable goods will gradually die,” the expert is sure. And this is just the tip of the iceberg: startups vying for market share in large chain stores due to the ability to buy popular goods with home delivery in 15 to 30 minutes can seriously change the entire industry over time, the analyst believes.
“With an increase in the number of buyers from among the representatives of the “Internet generation”, the market will only grow, while e-commerce will not displace classic retail, they will coexist.” – Chairman of the organizing committee of the International Management Forum Timur Yadgarov enters into an absentee dispute. At the same time, the share of e-commerce in the total retail volume in Russia still remains relatively low and has the potential to grow by 2-3 times over the next five years.
Online trading also has a dark side. “Marketplaces suffer from all the ills associated with scaling,” warns Nikita Kulikov, CEO of PravoRobotov. — This is also a difficulty with our own staff: there have been more frequent reports in the press about periodic fights and other excesses at distribution points, and their owners may not behave in accordance with corporate requirements. Again, logistics and possible damage to goods, and, of course, theft.” This also includes cases of fraud, capture of bank card data and other crimes by criminals.
At the same time, the industry is not without risks of economic disruptions. Thus, according to Freedom Finance Global analyst Vladimir Chernov, low competition among online stores in Russia allows 3-4 leading companies to increase tariffs for sellers when placing goods on their sites, which does not contribute to the development of the affordable online trading market. True, the possibilities of classical collusion to “dictate prices” in this area are still limited by the very specifics of business. “Technically, marketplaces can collude, but, on the other hand, if the product is presented somewhere else on the network and at a different price, the algorithms for issuing information and forming the cost will still take into account that the product is also cheaper,” Kulikov explained. — And if we are talking about a block on searching for goods in the largest search engines, then such a symbiosis in the current situation and in the existing legal framework is simply impossible, and such “cartel agreements” are doomed to further criminal prosecution. And when the risk is so great, there is simply no point in it, because by receiving their 20-30% from the goods, marketplaces can make great money anyway.”