!!!!!M commerce

D Е P А R Т M E N T O F C O N S U L T I N G

RUSSIAN MARKET OF M-COMMERCE 2012

Analytical review, based on on-line poll results

DEMO VERSION

This report was prepared by RosBusinessConsulting for information purposes solely. The information contained in this report was obtained from the sources, which RosBusinessConsulting deems reliable, however RosBusinessConsulting does not guarantee this information accuracy and completeness for any purposes. The information given in this report should not be interpreted either directly or indirectly as information containing investment recommendations. All opinions and estimations contained herein reflect the authors’ opinion as of the publication date and are subject to changes without notice. RosBusinessConsulting is not liable for any loss or damage resulting from the use of information contained herein, including published opinions or conclusions, by any third party as well as for consequences caused by incompleteness of given information. The information given in this report was obtained either from open sources or given by the companies referred to in this report. Additional information is given upon request. This document of any part hereof cannot be distributed without written permission of RosBusinessConsulting or replicated in any manner. Copyright © RosBusinessConsulting.

Moscow, 2012

Russian market of m-commerce 2012 2

RBC.research Department of consulting (consulting.rbc.ru)

ANNOTATION

The research “Russian market of m-commerce 2012” is dedicated to the analysis and development prospects of a comparatively new and promising market of m-commerce in Russia.

The research is exclusive and unique because the m-commerce market is professionally analyzed for the first time in Russia. Particular attention is paid to assessment of penetration level of mobile devices, in particular, smartphones and tablets. Use of mobile Internet in Russia is analyzed.

The research contains the analysis of preferences, behavioristic and socio-demographic characteristics of Russians who made purchases via mobile devices, broken down by their living geography, including estimations of the number of Russians who made purchases via smartphones and tablets. Their socio-demographic portrait is given. The rating of the most popular goods and services, bought via mobile devices, is given.

The review contains data on frequency and maximal sum of “mobile” purchases, made via smartphones and tablets. Main reasons to make “mobile” purchases are analyzed.

The leading Russian m-commerce market players are identified: the rating of the most popular mobile sites and mobile applications of e-shops based of the share of their customers is given.

Finally, particular attention is paid to the estimation of the Russian m-commerce market volume, comparison of the Russian m-commerce market with the markets of USA and the largest Western European countries.

The research was carried out in August – October 2012.

The report is on 84 pages.

The report contains 19 tables and 79 graphs and diagrams.

The report is written in Russian.

Sample size – 4842 respondents.

Phone: +7 (495) 363-11-12

http://marketing.rbc.ru E-mail: [email protected]

Copyright © RBC.research, 2003-2012

For m ore in fo on RBC’s depar tm ent o f consu l t ing see:

consu l t ing . rbc . ru

http://marketing.rbc.ru/

mailto:[email protected]



TABLE OF CONTENTS

ANNOTATION .................................................................................................................................................................... 2

SOME OF THE COMPANIES, CONSIDERED IN THE RESEARCH ................................................................................. 4

RESEARCH METHODOLOGY ........................................................................................................................................... 5

Purpose and objectives of the research ......................................................................................................................... 5

Information collection method ......................................................................................................................................... 5

Polling conditions ............................................................................................................................................................ 6

Sample Characteristic .................................................................................................................................................... 6 Sample size and structure ......................................................................................................................................... 6 Socio-demographic portrait of respondents ............................................................................................................... 7

OPINIONS OF EXPERTS AND PLAYERS REGARDING M-COMMERCE IN RUSSIA .................................................. 12

SHORT ANALYSIS OF M-COMMERCE MARKET SITUATION IN USA AND EUROPE ................................................ 14

USA .............................................................................................................................................................................. 14

Europe .......................................................................................................................................................................... 19

M-COMMERCE MARKET IN RUSSIA DEVELOPMENT PREREQUISITES ................................................................... 23

Use of mobile devices in Russia ................................................................................................................................... 23

Mobile Internet use in Russia ....................................................................................................................................... 28

Mobile Internet penetration in Russia ...................................................................................................................... 28 Mobile Internet audience in Russia .......................................................................................................................... 29

RUSSIAN M-COMMERCE MARKET SITUATION ........................................................................................................... 31

Most demanded functions of mobile devices ................................................................................................................ 32

Shares of Russians, who made purchases via mobile devices .................................................................................... 36

Socio-demographic portrait of Russians, who made purchases via mobile devices ..................................................... 38

Smartphones ........................................................................................................................................................... 39 Tablets ..................................................................................................................................................................... 41

Rating of goods and services bought through mobile devices ...................................................................................... 44 Russia 100 thsd. + ................................................................................................................................................... 46 Moscow и Moscow oblast ........................................................................................................................................ 48

St.- Petersburg ......................................................................................................................................................... 50 Million-strong cities (except Moscow and St.- Petersburg) ...................................................................................... 52 Cities with the population from 500 thsd. to 1 mln persons ...................................................................................... 54 Cities with the population from 100 thsd. to 500 thsd. persons ................................................................................ 56

Maximal sum of purchase made via mobile devices ..................................................................................................... 58

Smartphones ........................................................................................................................................................... 58 Tablets ..................................................................................................................................................................... 60

Frequency of buying of goods and services via mobile devices ................................................................................... 61 Smartphones ........................................................................................................................................................... 61 Tablets ..................................................................................................................................................................... 63

Rating of the most popular mobile sites and mobile applications of e-shops ................................................................ 65 Russia 100 thsd. + ................................................................................................................................................... 66 Moscow and Moscow oblast .................................................................................................................................... 68 St.- Petersburg ......................................................................................................................................................... 70 Million-strong cities (except Moscow and St.- Petersburg) ...................................................................................... 72

Cities with the population from 500 thsd. to 1 mln persons ...................................................................................... 74 Cities with the population from 100 thsd. to 500 thsd. persons ................................................................................ 76

Methods of payment for purchases made via mobile devices ...................................................................................... 78

Reasons for making purchases via mobile devices ..................................................................................................... 82



SOME OF THE COMPANIES, CONSIDERED IN THE RESEARCH



RESEARCH METHODOLOGY

Purpose and objectives of the research

The research “Russian market of m-commerce 2012” is dedicated to the analysis and development prospects of a comparatively new and promising market of m-commerce in Russia.

Major objectives of the research:

Assessment of the level of penetration of mobile devices in Russia, including smartphones and tablets.

Analysis of the use of mobile Internet in Russia: quantitative estimation of “mobile” audience and mobile Internet penetration level.

Identification of the most demanded functions of mobile devices.

Estimation of the number of Russians, making “mobile” purchases broken down by their living geography.

Analysis of the socio-demographic portrait of “mobile” buyers.

Determination of the frequency and maximal sum of “mobile” purchases, made via smartphones and tablets.

Analysis of main reasons of purchases, made via mobile devices.

Identification of the most popular ways of payment for various goods and services, bought via smartphones and tablets.

Identification of the most demanded goods and services, bought via mobile devices..

Assessment of the most popular mobile sites and mobile applications of e-shops based of the share of their customers.

Estimation of the Russian m-commerce market volume, comparison of the Russian m-commerce market with markets of USA and the largest Western European countries.

Information collection method

To collect data and solve the above problems an online poll method with selection of a target audience from OMI (Online Market Intelligence) Internet panel was chosen. Feasibility of application of Internet poll method is due to strict conformance to the procedure and main principles of performance of quantitative statistical surveys:

wide coverage of population, having a possibility to participate in the poll, ensured by active Internet penetration in Russia. According to data of the Public Opinion Foundation, in spring of 2012 the monthly Internet audience above 18 years of age amounted to 59,5 mln users, i.e. 51% of the population at large of the country. Note that the Internet audience is economically active population whose expenses on goods and services are higher than the national average. Precisely because of these two reasons (growing internetization of Russian cities and high economic activity of Internet users) the audience of the performed online poll can be considered representative for the research of consumer behavior of buyers of goods and services via Internet.

creation of a friendly atmosphere when answering questions of an electronic questionnaire – easy-to-use Internet portal interface, absence of influence on the part of interviewer;

qualitative recruiting of poll participants. Over 100 recruiting sources – online recruiting, phone recruiting, via PR campaigns on mass portals with wide audience: mail services, search engines, weather forecast sites, online personals, sites of specialized communities of interest, deep profiling (maximum info on panelists is collected); quality of obtained information.



The disadvantages of the method are insufficient (lower, than in a general totality of population of the Russian cities) share of older aged people, however as the time goes by and internetization grows this disadvantage will be overcome.

In order to improve the survey results quality a set of measures was taken to control the quality of filling of questionnaires, including:

software verification of multiple accounts (same addresses, phone numbers, email addresses, passwords, etc.);

unique references to the questionnaire (possibility to fill it only once);

measurement of an average filling time of the questionnaire.

Final data processing: SPSS program.

Polling conditions

Dates of polling – August 22 – August 31, 2012.

Sample size – 4 842 respondents.

Table 1. Breakdown of respondents by their place of residence

Number of respondents

Cities with the population from 100 to 500 thsd. persons 1412

Moscow 890

Cities with the population from 500 thsd. to 1 mln persons 860

St.- Petersburg 468

Moscow oblast 381

Samara 127

Nizhny Novgorod 97

Ekaterinburg 95

Novosibirsk 95

Rostov-on-Don 89

Ufa 80

Volgograd 72

Kazan 66

Chelyabinsk 60

Omsk 50

Total 4842

Source: RBC.research

Sample Characteristic

Sample size and structure

Sample size is 4842 respondents – men and women, residents of Moscow, St.- Petersburg and Moscow oblast, as well as of other cities of Russia.



Fig. 1. Shares of respondents, using smartphones and tablet computers, % of total number of pollees

© РБК.research

51,0%

17,5%

0%

10%

20%

30%

40%

50%

60%

Use smartphones Use tablet

Source: RBC.research, actualization date– September 2012

Table 2. Sample structure by living geography, %

City Number of respondents, pers.

Share in the sample, %

Cities with the population from 100 to 500 thsd. persons

1412 29,2%

Moscow 890 18,4%

Cities with the population from 500 thsd. to 1 mln persons

860 17,8%

St.- Petersburg 468 9,7%

Moscow oblast 381 7,9%

Samara 127 2,6%

Nizhny Novgorod 97 2,0%

Ekaterinburg 95 2,0%

Novosibirsk 95 2,0%

Rostov-on-Don 89 1,8%

Ufa 80 1,7%

Volgograd 72 1,5%

Kazan 66 1,4%

Chelyabinsk 60 1,2%

Omsk 50 1,0%

Total 4842 100,0%




OPINIONS OF EXPERTS AND PLAYERS REGARDING M-COMMERCE IN RUSSIA

Mobile media is a fast growing market having a bright future…

Roman Romanov, PhD in Sociology, consultant of business accelerator «Now» and Internet-agency «E-marka», со-organizer, member of the Program Committee for the Mobile Media Conference

Due to a wider use of mobile Internet, growth of smartphone park and population mobility as a whole m-commerce deserves close attention…

General Director of PayOnline processing centre, Marat Abasaliev.



M-COMMERCE MARKET IN RUSSIA DEVELOPMENT PREREQUISITES

Russian m-commerce market is in the embryo state, however, this market prospects are practically assured, because there are all preconditions for this market development.

Sales of smartphones and tablet computers grow, as well as the mobile Internet user audience. Thus, reports of the largest retail networks, selling mobile phones, speak of rapid increase of sales of smartphones and tablet computers. According to Euroset data over a period from the first half of 2011 to the first half of 2012 sales of smartphones grew by 67% and made up 27% of the number of mobile phones sold by the company in the first half of 2012. Sales of tablets via the company’s retail network increased eightfold and made up 800 thsd. pieces.

Nevertheless, so far the penetration level of smartphones and tablets lags far behind the US and Western European countries. Thus, according to estimations of RBC.research, at present only 2% and 18% of residents of the largest Russian cities have smartphones and tablets respectively. However in the years to come increase of sales of these devices will lead to growth of these figures.

Mobile Internet use grows along with penetration of smartphones and tablets. According to TNS data, mobile sites visiting audience in June 2012 made up 14,6 mln of residents of large Russian cities (100 thsd. +) above 12 years of age, what is up by 18,9% compared to the similar period of 2011.

By the way, onrush of e-commerce also affected m-commerce growth rates. Successful experience of distant purchases, appearance of large (and familiar to Russians) players at the e-commerce market increased Russians’ confidence in e-shops, what in its turn favoured goods and services sales growth, including sales via mobile devices.

Use of mobile devices in Russia

…

Fig. 2. Number of active SIM cards in Russia in 2006 – 2011, pcs.

172,9187,8

207,9219,2

227,6 232,5

151,9

13,8%

8,7%

10,7%

5,4%

3,9%

2,2%

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012E

0%

2%

4%

6%

8%

10%

12%

14%

16%

Number of active SIM cards, mln pcs.Growth rate, % to the previous period

Source: AC&M, (2012) estimation and calculations of RBC.research



Table 3. Use of mobile phones in Russia, Moscow, St.- Petersburg and regions of the country, Q1 2011 – Q2 2012, data as of the end of the corresponding period

Indicator 2011 2012

Q1 Q2 Q3 Q4 Q1 Q2

Russia

Number of mobile phone users in the RF*, mln pers.

220,7 222,7 225,2 227,6

Mobile phone penetration level in the RF, %

152,0% 153,4% 155,1% 156,8%

Moscow

Number of mobile device users in Moscow*, mln pers.

34,6 35,4 35,5 36,0

Mobile phone penetration level in Moscow, %

203,5% 208,5% 209,1% 212,1%

St.- Petersburg

Number of mobile device users in St.- Petersburg*, mln pers.

13,0 13,2 13,5 13,7

Mobile phone penetration level in St.- Petersburg, %

205,0% 207,5% 213,1% 215,6%

Other cities of Russia

Number of mobile device users in regions of Russia*, mln pers.

173,2 174,1 176,2 177,9

Mobile phone penetration level in regions of Russia, %

142,1% 142,9% 144,6% 146,0%

Source: AC&M, * AC&M identifies the number of active SIM cards with the number of mobile phone users

Fig. 3. TOP-10 countries in terms of used mobile phones in 2009, mln pcs.

859,0

752,0

279,0

238,0

220,0

202,9

154,0

111,0

105,0

121,0

China

India

USA

Russia

Indonesia

Brazil

Vietnam

Japan

Pakistan

Germany

Source: US CIA



Fig. 4. Number of mobile phones, used by Russians, % of Russians, residing in Russian cities with the population exceeding 100 thsd. persons

3,0%

71,0%

26,0%

Source: Romir

Use of mobile phones and tablet computers, gaining their popularity in Russia, is one of essential factors of m-commerce development. Thus, it’s evident, that smartphone and tablet computer owners constitute the basis of mobile Internet audience and they also make up almost 100% of Russians who made purchases in Internet via mobile devices.

However, recent studies speak of a rather low penetration level of these devices in the country. Thus, according to eMarketer data, at the beginning of 2012 only 28% and 10% of Internet users aged from 16 tо 54 years had smartphones and tablets respectively. As a comparison, in BRIC countries these figures are much higher. Thus, in Brazil, that demonstrated rather modest results compared to China and India, smartphone and tablet computer penetration level made up 35% and 12% respectively.

Fig. 5. Penetration of smartphones and tablets in BRIC countries, at the beginning of 2012, % of Internet user audience aged 16-54

59%

37%

35%

28%

33%

19%

12%

10%

China

India

Brazil

Russia

Source: eMarketer



Boom of sales of smartphones and tablet computers, observed in 2011-2012, will continue in 2013, …

Fig. 6. Dynamics of smartphone sales volume in Euroset retail networks for the 1st

half of 2009 – 1

st half of 2012, mln pcs. (% of phone sales)

1st half 2009 1st half 2010 I1st half 2011 1st half 2012

Smartphone sales, mln pcs.

Share of smartphones in sales of mobile phones, %

Source: Euroset reporting

Fig. 7. Smartphone penetration, % of mobile phones registered in MTS network

1st half 2010 2nd half 2010 1st half 2011 2nd half 2011 1st half 2012 2nd half 2012

Smartphone penetration, % of phones, registered in MTS network

Source: MTS reporting



Fig. 8. Smartphone and tablet penetration in Russia 100 thsd.+, 1st

half of 2009 – 1st

half of 2012, % of Russians aged 18-54, residing in large cities of Russia

© РБК.research

1st half 2009 1st half 2010 1st half 2011 1st half 2012

Smartphone penetration level, % Tablet penetration level, %

Source: estimations of RBC.research

Mobile Internet use in Russia

Mobile Internet penetration in Russia

Growth of smartphone and tablet penetration as well as reduction of Internet access rates of the leading mobile operators led to increase of mobile Internet use. Thus, according to TNS data during 2011-2012 mobile sites visiting audience, living only in large cities of Russia (100 thsd. +) increased by ХХ% (or by ХХ mln persons) and made up ХХ mln. of Russians. Mobile Internet penetration level achieved ХХ%. According to forecasts of RBC.research in 2013 mobile sites visiting audience may make up ХХ mln persons and the penetration level will increase by ХХ%. These factors will favor m-commerce market development in Russia.

Table 4. Mobile Internet use in Russia (100 thsd. +), Moscow, St.- Petersburg, June 2008 – June 2012, thsd. persons above 12 years of age (%)

June 2008

June 2009

June

2010

June

2011

June

2012

Russia 100 thsd. +

Number of Russians above 12 years of age, using mobile Internet, thsd. persons

6 961,6 7 815,1 9 203,8

Penetration level, % of Russians above 12 years of age, living in 100 thsd.+ cities

11,5% 13,0% 15,3%

Moscow

Number of residents of Moscow above 12 years of age, using mobile Internet, thsd. persons

907,8 1 390,6 1 323,0

Penetration level, % of residents of Moscow above 12 years of age

9,5% 14,6% 14,0%

St.- Petersburg

Number of residents of St.- Petersburg above 12 years of age, using mobile Internet, thsd. persons

N/a 452,8 547,1

Penetration level, % of residents of St.- Petersburg above 12 years of age

N/a 10,9% 13,2%

Source: TNS



Fig. 9. Dynamics of mobile Internet audience in Russia 100 thsd.+ , June 2008 – June 2012, mln pers. above 12 years of age (%)

2008 2009 2010 2011 2012 2013F

Number of Russians above 12 years of age, using mobile Internet, mln pers.

Penetration level, % of Russians above 12 years of age, living in 100 thsd.+ cities

Source: TNS, RBC.research forecast

Mobile Internet audience in Russia

Smartphone and tablet owners form the basis of mobile Internet user audience. Thus, according to TNS data in June 2012 about 46% mobile devices, used to access the Internet were ordinary mobile phones, 45% - smartphones and 8% - tablet computers.

Fig. 10. Mobile devices, used to access Internet, June 2012, % of mobile Internet users above 12 years of age

34%

46%

11%

14%

8%

41%46%

50%

45%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

St.-Petersburg

Moscow

Russia 100 thsd. +

Ordinary mobile phone Smartphone/ communicator Tablet Cannot say

Source: TNS

Speaking of the socio-demographic portrait of mobile Internet users, it’s worth to note that most of them are men (a little over 54%), and Russians aged 18-34 (about 67%).



Fig. 11. Mobile Internet user portrait, % of Russians of corresponding age and sex, living in 100 thsd. + cities

Sex

62%

38%

21%

3%

18-24

25-34

35-44

45-54

Age

28%

19%

Men

Women

7.9 mln pers.

6,7 mln pers.

4.83 mln pers.

4.78 mln pers.

2.12 mln pers.

0.91 mln pers.

Source: TNS



RUSSIAN M-COMMERCE MARKET SITUATION

Russian m-commerce market lags far behind Western Europe and USA what is due to a relatively low level of smartphone and tablet penetration and a relatively low use of mobile Internet.

…

Most demanded functions of mobile devices

At present information search through mobile Internet is one of the Top 4 most demanded functions of mobile devices. Thus, according to results of the opinion poll performed by RBC.research, 73% of owners use their smartphones to search for information. At that the most used capabilities are calls, sending of SMS messages (they are used by 93,6% of smartphone owners) and use of a calculator (79,6%).

Among tablet owners search for information in Internet occupies the leading position with the share of users equal to 87% and is ahead of such functions as e-mail viewing and sending of messages (they are used by 82% of Internet tablets users), and interaction in social networks (77%).



Fig. 12. «What capabilities of your smartphone do you use?», % of polled Russians, having smartphones

© РБК.research

93,6%

79,6%

73,0%

72,3%

71,9%

63,9%

61,0%

59,0%

57,5%

49,1%

48,9%

43,8%

38,2%

37,9%

36,1%

30,4%

27,7%

19,0%

60,6%

Send SMS messages

Use calculator

Search for information in

Internet

Listen to MP3 player




Fig. 13. «What capabilities of your tablet do you use?», % of polled Russians, having tablets

© РБК.research

86,7%

82,2%

77,3%

75,4%

73,7%

69,9%

60,4%

53,8%

51,5%

49,7%

48,3%

44,5%

39,1%

36,1%

34,0%

29,9%

57,8%

Search for information in

Internet

View e-mail, send messаges

Interact in social networks

Read news

Play games


…

Shares of Russians, who made purchases via mobile devices

…



Fig. 14. Shares of Russians, who made purchases via mobile devices, % of pollees aged 18-54, having smartphones or tablets

© РБК.research

Moscow

Moscow oblast

St.-Petersburg

Other million-strong

cities

Cities from 500 thsd. to

1 mln pers.

Cities from 100 to 500

thsd. pers.

Russia 100 thsd.+

% of tablet owners % of smartphone owners


Fig. 15. Shares of Russians, who made purchases via mobile devices, % of pollees aged 18-54, using mobile Internet and having smartphones or tablets

© РБК.research

Moscow

Moscow oblast

St.-Petsersburg

Other million-strong

cities

Cities from 500 thsd. to

1 mln pers.

Cities from 100 to 500

thsd. pers.

Russia 100 thsd. +

% of tablet owners, using mobile Internet

% of smartphone owners, using mobile Internet




Socio-demographic portrait of Russians, who made purchases via mobile devices

Smartphones

Fig. 16. Portrait of Russians, who made purchases via smartphones, % of Russians living in large cities (100 thsd.+)




Fig. 17. Most popular smartphone brands, % of polled Russians, who made purchases via smartphones

© РБК.research


Tablets

Rating of goods and services bought through mobile devices

At present the ranges of goods and services sold via smartphone and via tablets are a little different. …



Russia 100 thsd. +

Fig. 18. Rating of the most popular goods and services, bought via smartphones, 2012, % of polled Russians, who made purchases via smartphones

© РБК.research

Payment for mobile services




Fig. 19. Rating of the most popular goods and services, bought via tablets, 2012, % of polled Russians, who made purchases via tablets

© РБК.research

Payment for mobile services




Moscow и Moscow oblast

St.- Petersburg

Million-strong cities (except Moscow and St.- Petersburg)


Cities with the population from 100 thsd. to 500 thsd. persons

Rating of the most popular mobile sites and mobile applications of e-shops

Onrush of m-commerce in USA and Europe proved the prospects of this distant commerce segment. In anticipation of a similar boom in Russia many players of the domestic e-commerce market have not limited by their presence in the classic online space and created their own mobile sites and applications, allowing them to develop in the m-commerce segment as well. Currently the following e-commerce market players are most active in this sphere: ...



Russia 100 thsd. +

Fig. 20. Rating of the most popular e-shops where goods and services were bought via smartphones, 2012, % of polled Russians, who made purchases using smartphones

© РБК.research

Biglion




Fig. 21. Rating of the most popular e-shops where goods and services were bought via tablets, 2012, % of polled Russians, who made purchases using tablets

© РБК.research

Ozon

Source: RBC.research, actualization date- September 2012



Moscow and Moscow oblast

St.- Petersburg

Million-strong cities (except Moscow and St.- Petersburg)


Cities with the population from 100 thsd. to 500 thsd. persons

Methods of payment for purchases made via mobile devices

Reasons for making purchases via mobile devices

….

Fig. 22. «Please, indicate reasons why YOU made purchases via a SMARTPHONE or a TABLET?», 2012, % of polled Russians, who bought goods and services via a smartphone and a tablet

© РБК.research

It was necessary to make

an urgent purchase

Purchase via a smartphone Purchase via a tablet


The sum is not equal to 100%, because respondents could choose several alternative answers.

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