Online stores were able to keep the customers who flooded into the pandemic
According to the forecast of the Association of Online Trading Companies (AKIT) and Sberbank, the Russian online shopping market will increase by 331 billion rubles this year. Last year, the growth was 3.5 times higher — 1,189 billion rubles. The pandemic provoked a sharp jump — under the influence of restrictions, even those customers who preferred to shop in traditional stores were forced to switch online. The positive dynamics of the current year indicates that after the lifting of restrictions, there was no noticeable outflow of customers from online stores.
A study conducted by AKIT and Sberbank showed that in the first nine months of this year, the volume of the Russian e-commerce market amounted to 2412 billion rubles. In Russia, the share of e-commerce in the total retail volume by the end of the 1st half of 2021 amounted to 8.5%. This indicator reached a record value in January — June last year, when due to covid restrictions, the share of online trading was more than 10%.
In general, by the end of 2020, the share of e-commerce in the total turnover of retail trade in Russia amounted to 9.5%. For comparison: in the USA this indicator was equal to 13.6%, in the UK - 27.6%, China - 24.5%. According to Statista estimates, online sales now account for 18% of global retail sales, and by 2024 their share will increase to 21.8%. According to the forecasts of the Ministry of Industry and Trade of Russia, in the coming years the share of online retail in the Russian Federation will be about 15% of the retail volume.
Fewer purchases, more deliveries
"E-commerce is one of the few sectors of the economy that not only managed to maintain positive dynamics during the pandemic restrictions, but even increased turnover and volumes. According to all forecasts, the growth rate may decrease slightly, but in general, the market growth will continue," Svetlana Revinova, Ph.D. in Economics, Associate Professor of the Faculty of Economics of the RUDN told EZH. She drew attention to the fact that against the background of the growth of the market as a whole, the average receipt for one purchase is decreasing.
Last year, this figure decreased by 14%. "The decrease in the average receipt is due to both the desire of buyers to save money and the increased frequency of purchases. If before the pandemic purchases were made approximately once a month and customers sought to order as many goods as possible in one delivery, now the situation has changed," S. Revinova explained.
So, the Wildberries online store showed an increase in the number of orders by 100%, in terms of sales in monetary terms — 96%, and the average check of this seller decreased by 2%. Another major player — Aliexpress Russia - has increased the number of orders by 218%, the volume of sales in monetary terms has increased by 171%, and the average receipt has decreased by 15%.
Another trend that the pandemic has brought to the e-commerce market is that the number of orders from Russians in foreign online stores has significantly decreased. According to AKIT, in 2020, at the height of the pandemic and with the introduction of quarantine measures throughout the country, the domestic e-commerce market grew by 92%, its share amounted to 86% of the total, while the share of the cross-border market decreased by 25% and amounted to only 440 billion rubles.
The same ratio of shares remained in the current year. According to the results for nine months, 86% of the market is occupied by domestic trade, 14% by the cross-border segment.
Nikolay Novoselov, Director of New Businesses at Cuore, in a conversation with EZH noted that unprecedented competition between suppliers contributes to the growth of online commerce. If in the classic offline one product is sold by one supplier, with a maximum of three, then there may be hundreds of them online, and in some categories thousands.
Their competition leads to a maximum reduction in prices and a variety of offers. "It also gives coverage to almost all existing product categories on the market: the marketplace becomes a one-for-all place for shopping. From drill head to lanolin. Now the number of sellers is approaching 400 thousand and many of them are just getting into the taste. Next year promises to be hot," N. Novoselov believes.
By the way, the annual survey of the Russian audience of online stores, which is conducted by Yandex. Market" and the company GfK Rus, showed that it is the desire to save money that leads buyers to the Internet. 55% of respondents named the ability to compare prices and search for favorable offers as the main reason that encourages them to make online orders.
Every second respondent noted the opportunity to read reviews, about as often respondents pointed to relatively low prices and the ability to shop at any time and from any place. The most common actions before buying are reading reviews (32% of respondents highlighted this point), comparing similar products (28%) and their prices in different stores (26%).
According to the study, half of the citizens aged 16-55 years buy something on the Internet at least twice a year. 80% of them order something at least once a month, 26% - at least once a week. The most popular category of goods is clothing and shoes for adults. 64% of respondents bought it at least once during the year. Face, body and hair care products rose to the second place (59%). Most noticeably, the demand for food products has expanded by almost a quarter (50%) — they occupy the fifth place in the top.
Mobile shopping breaks records
According to expert estimates, last year the smartphone became the main device for accessing the Internet. The trend towards mobilization has not bypassed the online trading market. The share of purchases made from mobile devices continues to grow — this year it exceeded 60%.
When buying from mobile devices, people are more likely to use store apps rather than their websites. According to the report "The state of marketing of shopping apps" by AppsFlyer, Russians have become twice as likely to install mobile store apps for the 1st half of 2021. The increase was 92% compared to the same period last year. "Russia remains one of the largest online commerce markets, ranking fifth in the world in terms of the share of installations on Android devices and third in terms of iOS app installations," Mikhail Zaitsev, CEO of AppsFlyer in Russia and the CIS, told EZH.
The market is making great efforts to match this trend. "Business is rapidly increasing its mobile presence: online stores create applications in order to be closer to users and offer them the most comfortable service. For example, as of September 2021, the Russian division of RTB House hosted five times more mobile applications than in 2020," said Alexey Khizhov, CEO of RTB House in Russia.
Speaking about the forecasts for next year, all the experts interviewed by EJ agreed that online trading will continue to develop, although not at the same pace as at the beginning of the pandemic. Marketplaces and ecosystems that have large resources and opportunities for promotion will grow especially actively. At the same time, the focus of sellers will gradually shift from actions to attract new buyers to steps to retain those that are already available.
Food products at a low start
Only 7% of Russians order food via the Internet. This is demonstrated by the data of the HSE sociological survey on everyday practices of the population. According to experts, consumers are still cautiously mastering the grocery segment of online shopping, but in the near future it may become a key diver of the growth of the e-commerce market.
Experts attribute the lag in the online grocery segment to the distrust that citizens still feel towards order collectors. In relation to food, it is especially important for consumers to evaluate the appearance of the product, make a choice based on their own preferences, and personally check the expiration dates.
Another reason is that the market is at the very beginning of its development. Before the pandemic, players considered food delivery unprofitable. And only after the introduction of restrictions, the supply in this segment began to grow rapidly following the demand. According to Andrey Starkov, associate professor at the HSE Graduate School of Business, in a few years the structure of consumption will seriously change, and food products will become a key driver of the growth of the online market.
The fact that consumer activity is currently growing is confirmed by the data of the largest players. According to the Wildberries analytical service, in January — September of this year, buyers from Russia made over 39 million food orders on the site, which is 177% more compared to the same period last year. Moreover, in the third quarter, the number of food orders reached 14.1 million, reaching the maximum value for 2021.
At the same time, the HSE study showed that the pandemic and related restrictive measures also pushed the popularization of ready-to-eat delivery services, however, as the survey results showed, they did not lead to a radical change in consumer eating habits. Thus, 84% of respondents indicated that they usually eat dishes prepared at home. First of all, this is due to the fact that people save money, and ready-made food is often regarded as a serious waste, experts say.
A study conducted by AKIT and Sberbank showed that in the first nine months of this year, the volume of the Russian e-commerce market amounted to 2412 billion rubles. In Russia, the share of e-commerce in the total retail volume by the end of the 1st half of 2021 amounted to 8.5%. This indicator reached a record value in January — June last year, when due to covid restrictions, the share of online trading was more than 10%.
In general, by the end of 2020, the share of e-commerce in the total turnover of retail trade in Russia amounted to 9.5%. For comparison: in the USA this indicator was equal to 13.6%, in the UK - 27.6%, China - 24.5%. According to Statista estimates, online sales now account for 18% of global retail sales, and by 2024 their share will increase to 21.8%. According to the forecasts of the Ministry of Industry and Trade of Russia, in the coming years the share of online retail in the Russian Federation will be about 15% of the retail volume.
Fewer purchases, more deliveries
"E-commerce is one of the few sectors of the economy that not only managed to maintain positive dynamics during the pandemic restrictions, but even increased turnover and volumes. According to all forecasts, the growth rate may decrease slightly, but in general, the market growth will continue," Svetlana Revinova, Ph.D. in Economics, Associate Professor of the Faculty of Economics of the RUDN told EZH. She drew attention to the fact that against the background of the growth of the market as a whole, the average receipt for one purchase is decreasing.
Last year, this figure decreased by 14%. "The decrease in the average receipt is due to both the desire of buyers to save money and the increased frequency of purchases. If before the pandemic purchases were made approximately once a month and customers sought to order as many goods as possible in one delivery, now the situation has changed," S. Revinova explained.
So, the Wildberries online store showed an increase in the number of orders by 100%, in terms of sales in monetary terms — 96%, and the average check of this seller decreased by 2%. Another major player — Aliexpress Russia - has increased the number of orders by 218%, the volume of sales in monetary terms has increased by 171%, and the average receipt has decreased by 15%.
Another trend that the pandemic has brought to the e-commerce market is that the number of orders from Russians in foreign online stores has significantly decreased. According to AKIT, in 2020, at the height of the pandemic and with the introduction of quarantine measures throughout the country, the domestic e-commerce market grew by 92%, its share amounted to 86% of the total, while the share of the cross-border market decreased by 25% and amounted to only 440 billion rubles.
The same ratio of shares remained in the current year. According to the results for nine months, 86% of the market is occupied by domestic trade, 14% by the cross-border segment.
Nikolay Novoselov, Director of New Businesses at Cuore, in a conversation with EZH noted that unprecedented competition between suppliers contributes to the growth of online commerce. If in the classic offline one product is sold by one supplier, with a maximum of three, then there may be hundreds of them online, and in some categories thousands.
Their competition leads to a maximum reduction in prices and a variety of offers. "It also gives coverage to almost all existing product categories on the market: the marketplace becomes a one-for-all place for shopping. From drill head to lanolin. Now the number of sellers is approaching 400 thousand and many of them are just getting into the taste. Next year promises to be hot," N. Novoselov believes.
By the way, the annual survey of the Russian audience of online stores, which is conducted by Yandex. Market" and the company GfK Rus, showed that it is the desire to save money that leads buyers to the Internet. 55% of respondents named the ability to compare prices and search for favorable offers as the main reason that encourages them to make online orders.
Every second respondent noted the opportunity to read reviews, about as often respondents pointed to relatively low prices and the ability to shop at any time and from any place. The most common actions before buying are reading reviews (32% of respondents highlighted this point), comparing similar products (28%) and their prices in different stores (26%).
According to the study, half of the citizens aged 16-55 years buy something on the Internet at least twice a year. 80% of them order something at least once a month, 26% - at least once a week. The most popular category of goods is clothing and shoes for adults. 64% of respondents bought it at least once during the year. Face, body and hair care products rose to the second place (59%). Most noticeably, the demand for food products has expanded by almost a quarter (50%) — they occupy the fifth place in the top.
Mobile shopping breaks records
According to expert estimates, last year the smartphone became the main device for accessing the Internet. The trend towards mobilization has not bypassed the online trading market. The share of purchases made from mobile devices continues to grow — this year it exceeded 60%.
When buying from mobile devices, people are more likely to use store apps rather than their websites. According to the report "The state of marketing of shopping apps" by AppsFlyer, Russians have become twice as likely to install mobile store apps for the 1st half of 2021. The increase was 92% compared to the same period last year. "Russia remains one of the largest online commerce markets, ranking fifth in the world in terms of the share of installations on Android devices and third in terms of iOS app installations," Mikhail Zaitsev, CEO of AppsFlyer in Russia and the CIS, told EZH.
The market is making great efforts to match this trend. "Business is rapidly increasing its mobile presence: online stores create applications in order to be closer to users and offer them the most comfortable service. For example, as of September 2021, the Russian division of RTB House hosted five times more mobile applications than in 2020," said Alexey Khizhov, CEO of RTB House in Russia.
Speaking about the forecasts for next year, all the experts interviewed by EJ agreed that online trading will continue to develop, although not at the same pace as at the beginning of the pandemic. Marketplaces and ecosystems that have large resources and opportunities for promotion will grow especially actively. At the same time, the focus of sellers will gradually shift from actions to attract new buyers to steps to retain those that are already available.
Food products at a low start
Only 7% of Russians order food via the Internet. This is demonstrated by the data of the HSE sociological survey on everyday practices of the population. According to experts, consumers are still cautiously mastering the grocery segment of online shopping, but in the near future it may become a key diver of the growth of the e-commerce market.
Experts attribute the lag in the online grocery segment to the distrust that citizens still feel towards order collectors. In relation to food, it is especially important for consumers to evaluate the appearance of the product, make a choice based on their own preferences, and personally check the expiration dates.
Another reason is that the market is at the very beginning of its development. Before the pandemic, players considered food delivery unprofitable. And only after the introduction of restrictions, the supply in this segment began to grow rapidly following the demand. According to Andrey Starkov, associate professor at the HSE Graduate School of Business, in a few years the structure of consumption will seriously change, and food products will become a key driver of the growth of the online market.
The fact that consumer activity is currently growing is confirmed by the data of the largest players. According to the Wildberries analytical service, in January — September of this year, buyers from Russia made over 39 million food orders on the site, which is 177% more compared to the same period last year. Moreover, in the third quarter, the number of food orders reached 14.1 million, reaching the maximum value for 2021.
At the same time, the HSE study showed that the pandemic and related restrictive measures also pushed the popularization of ready-to-eat delivery services, however, as the survey results showed, they did not lead to a radical change in consumer eating habits. Thus, 84% of respondents indicated that they usually eat dishes prepared at home. First of all, this is due to the fact that people save money, and ready-made food is often regarded as a serious waste, experts say.
