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Russian eCommerce Market Overview and Trends

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E-commerce in Russia Market Landscape
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Page 1: Russian eCommerce Market Overview and Trends

E-commerce in Russia

Market Landscape

Page 2: Russian eCommerce Market Overview and Trends

What Russia is….

• Country with large territory

• Customers behavior varies from region to region

• Diverse in Technology

* Source: Rosstat, 2011

17 075 400 km² or11,46 % from total dry landRanked 9 in the world by population size (142 914 136 mln people*)

Page 3: Russian eCommerce Market Overview and Trends

Monthly internet audience is about 50 mln.

Source: Internet in Russia. FOM. Winter 2010/11

3

+10,1 mln.

Month

36,3 mln.

+3,9 mln.

Week

Day

Yearly change

-13%

-6%

+41%

Currently every 2rd adult Russian is on the Internet

Main growth – due to regions, 90% of new users outside of Moscow and Saint-Petersburg

Page 4: Russian eCommerce Market Overview and Trends

4

Large and High Growth Internet Market Opportunity

Key Investment Highlights

Growth in Internet Users vs. Penetration

0

20

40

60

80

100

0 5 10 15

Inte

rnet

Pen

etr

ati

on

20

10

(%

)

Internet users CAGR 2010-14e (%)

Source: Euromonitor (January 2011), FOM (March 2011) for Russia

Key Developed Markets

Total Internet Users (MM)

Brazil

China

India

Russia 2010

50

66

54

3933 31

80

Germany UK Russia France Italy Spain

Ряд4 Ряд5

Russia 2014e

2010 2014e

BRIC

Page 5: Russian eCommerce Market Overview and Trends

2011 e-commerce market estimated turnover 245 bln. Rub (6 bln Euro)

Annual growth by 17%

The average purchase ~ 2700 Rub (65 euro) varies from 4700 rub (113 Euro) in large cities to 2000 rub (48 euro) in small towns

55% of internet users buy or research before shopping on line:

• Online shopping browser – 24% (~ 12 mln. people)

• Regular online shoppers – 11% (~ 6 mln. people)

• Occasional online shoppers – 16% (~ 8 mln. people)

5Source: FOM. E-commerce market. March 2011.

Russia e-commerce key market facts

Page 6: Russian eCommerce Market Overview and Trends

Buying trends

6

Perc

enta

ge o

f people

over

35

Percentage of population in cities 1 mln+

Proportion of people buying each product category: More than 15% 7-14% Less than 7%

Younger

10%

20%

Cosmetics & perfume

70%

Household appliances

and electronics

50%

30%

60%

80%

40%

Books

Clothes, shoes

Cell phones

Food

Children’s products

Computers &

peripherals

Travel tickets

CD&DVD

Older

Large cities

Small cities

Page 7: Russian eCommerce Market Overview and Trends

Popular product categories

7

as a % of all online shoppers

Source: FOM. E-commerce market. March 2011.

Clothes, shoes

Books

Household appliances and electronics

Cosmetics and perfume

Cell phones and accessories

Children’s products

Food items

Computers and peripherals

Travel tickets

Audio and video DVDs

23

18

17

13

8

8

7

6

6

5

+5 pp

-1 pp

-4 pp

0 pp

-1 pp

+2 pp

-1 pp

0 pp

-3 pp

0 pp

August 2010

Page 8: Russian eCommerce Market Overview and Trends

33% of payments are made remotely

8Source: FOM. E-commerce market. March 2011.

as a % of all online shoppers

Cash on delivery

Bank cards

Bank transfer

Online payment system

Payment terminal

SMS

0 10 20 30 40 50 60 70

65

15

8

7

6

1

Advance payment

Page 9: Russian eCommerce Market Overview and Trends

This seasonfashion trends in Clothing and Shoes

search…

Page 10: Russian eCommerce Market Overview and Trends

80%

Fashion became more and more popular

10 * Chart shows absolute yearly increase

jun

'09

aug

'09

oct '

09

dec '0

9

feb

'10

apr '

10

jun

'10

aug

'10

oct '

10

dec '1

0

feb

'11

apr '

11

jun

'11

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Clothes Shoes

Page 11: Russian eCommerce Market Overview and Trends

jan feb mar apr may jun jul aug sep oct nov dec0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

107%108%

130%

100%

84%70%

64%

86%101%

129%

124%

109%

88%

106%

153%

125%

96%

68%55%

85%

106%

130%

114%

88%

Clothes Shoes

“Summer slump” – seasonal demand

11 Source: Words stat Yandex

Page 12: Russian eCommerce Market Overview and Trends

Interest level: 4 regions lead the way

12Words stat Yandex

Clothes Shoes

33%

15%12%

12%

9%

8%

8% 3%

MoscowVolga RegionCentral part without MoscowSt. Petersburg&NorthwestUralSiberiaSouth

40%

13%11%

10%

8%

8%7% 3%

Page 13: Russian eCommerce Market Overview and Trends

Category interest level by gender and age

13

Source: Words stat Yandex

Shoes

5%

< 18

18-24

25-34

35-44

> 45

< 18

18-24

25-34

35-44

> 45

0% 10% 20% 30% 40% 50%

3%

6%

11%

3%

1%

5%

13%

45%8%

4%4%

11%44%

16%

4%

1%

1%

2%

11%

50% 40% 30% 20% 10% 0%

Men

24%

Women

76%

Clothes

Women

79%

Men

21%

Page 14: Russian eCommerce Market Overview and Trends

Advertisement click rate

14Source: Words stat Yandex

42%

“Clothes” queryAll queries

8,6%

do clickdo not click

49%

“Shoes” category

Page 15: Russian eCommerce Market Overview and Trends

Users response rate by age

15 Source: Words stat Yandex

-150% -100% -50% 0% 50% 100% 150%

61%

52%

49%

42%

57%

39%

48%

51%

58%

43%

Series3 Series4

52%

50%

44%

52%

48%

56%

50%

48%

36%

64%

Clothes Shoes>45

35-44

25-34

18-24

<18

Page 16: Russian eCommerce Market Overview and Trends

Popularity of TOP players in fashion

16 Source: Words stat Yandex

jul ause

p oct novdec jan feb ma

aprma jun jul au

sep oct nov

dec jan feb maapr

ma jun0

50,000

100,000

150,000

200,000

250,000

300,000

Bonprix

Quelle

Otto

Sapato

Wildberries

Lamoda

1

2

3

3

1

2

1

3

2

La Redoute

Page 17: Russian eCommerce Market Overview and Trends

Yandex for e-merchants

Page 18: Russian eCommerce Market Overview and Trends

Contextualdisplay ads

Guaranteed

Highest ranking ads

Org

anic

sea

rch

resu

lts

Yandex.Direct

Yandex.DirectThe largest service of contextual advertising placement in runet.

Key features

• Impressions for interested users

• Customised: on the positions, geo, time.

• Managed: new bid-management strategies allow you to adapt the campaign efficiently based on their tasks

• Effective: using in combination with Yandex.Metric allow you to manage advertising through conversion to achieve the goal

• Tracking: using the “TargetCall” allows you to measure all communication channels

18

Page 19: Russian eCommerce Market Overview and Trends

Yandex.Market

19

The leading comparison shopping service

List of shops

Related products

Product accessories

SummaryProduct

description

Shops location on map

Key features for users

• Price comparison and consumer reviews on shops and thousands of products throughout Russia with its description

• Over 4,500 merchants

• Advanced recommendation engine

• Database of thousands of product models and features

• Public wish lists

• Cross shop busket

Value proposition for merchants

• Prioritizes display of offerings from shops in close proximity to users, increasing relevance to shoppers and advertisers

• Download of commodity items from the shops, automatic product categorization and identification

• Strict merchant quality control

• Yandex does not keep inventory

Page 20: Russian eCommerce Market Overview and Trends

• Premium placement on the companies list relevant to user queries

• Additional Adv message on the card with contacts of the selected organization is shown on the map

• Extended list of placement were info is shown like search, mobile application etc.

Value proposition

Yandex.Spravochnik (GEO location)The largest catalogue of organizations and cartographic service in runet.

User Services

20

Premium positionAdv Message

Key features• Biggest cartographical service in Russia with geo-located

information• ‘Organization page’ provides users with contacts, address, website

and other detailed information• Mobile application for most popular platforms

Page 21: Russian eCommerce Market Overview and Trends

Homepage

CardsJob

Raspisaniya

Auto

Money

Market

Maps and traffic

Dictionaries

Video

Music

Games

Services

AfishaPhotos

Mail

WeatherTV

NewsYounger Older

Men

Women

21

Yandex sociodemographic targeting

Page 22: Russian eCommerce Market Overview and Trends

22

Yandex sociodemographic targeting

Key features

• Selected trusted user profile with defined sociodemographic and behavioral patterns

• Applied MatrixNet technologies algorithm to

– Defining factors which are common for all users of a group (for each sociademographic group)

– Evaluation of importance of these factors

• Results extrapolation to all Yandex users, 100% of audience is covered

• If the data is contradictory or not full and the system can not define users’ sociodemographic group ads are not shown to them

A simple example…We had:

oAdvertiser: clothes manufacturer

oProject: MailoTarget audience: women

We got:oTarget audience coverage +66%o CTR +73%

Page 23: Russian eCommerce Market Overview and Trends

Preston CareyDirector, Business Development

[email protected]+1 857.288.8762@prestoncarey

Thank You!


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