Russia’s eCommerce growth is drawing considerable attention from global retailers interested in launching in the developing industry. Of Russia’s online audience, 70% visit eCommerce sites regularly – that equates to 83 million users.
According to eMarketer, retail eCommerce sales in Russia are expected to jump from $22.5 billion to $35 billion over the next three years. Visitors to eCommerce sites currently average 25 minutes of online shopping per day, driving in 269 daily page views, according to analysts at business consulting company Gemius. This eCommerce growth in Russia has drawn considerable attention from global retailers interested in launching in the developing industry.
As always, various differences from one country to another strongly impact the type of planning that goes into a transition to a new foreign market. From customer demographics to common retail habits, understanding the common practices of both local and foreign Russian retailers and shoppers is crucial to achieving success in this unique market.
For those planning to launch in Russia, adjusting payment options for the local audience proves incredibly important.
Common Payment Options
Given the infancy of Russian eCommerce, users are still learning to trust the transaction process, and most prefer to pay for their items COD. However, credit card and ePayment systems are becoming increasingly popular. In Russia, web payment systems also include packages that accept e-money, cash, and cards. This offering allows users the ability to choose which options are best for them.
Over the last few years, local Russian payment systems have begun to establish themselves as trustworthy sites that cater to local needs and habits. Among other options, Russians prefer the local ePayment options Yandex.Money, VISA Qiwi Wallet, and Webmoney. These three main ePayment operators in Russia comprise over 20 million accounts. While PayPal might be popular in other markets, as of 2014, there were only 1.5 million PayPal users, as the company only launched in Russia the year before.
Yandex.Money is Russia’s largest online payment system. Users like its quick registration and intuitive interface. Yandex,Money offers a feature to make transfers from the user’s wallet using ATMs, terminals, and online methods free of charge to pay for services, bills, or products. Businesses use the Yandex.Money API, which allows them to configure Yandex.Money tools to create their own payment solutions.
VISA QiWi Wallet
QiWi’s online payment system and mobile application is one of the most widely used payment systems in Russia. Commonly, the web-payment service is used to make online purchases and pay for loans, mobile bills, and even home utilities. QiWi also offers terminals where users can make payments as they would on their mobile device.
WebMoney has a standardized interface where users can track funds and make online payments. WebMoney also rolled out a social media app that provides users options to pay friends, purchase online games, or pay bills.
As more people become comfortable using online payment systems, users will recognize the full potential of online shopping, and the industry will only grow from there.
Yandex.Money teamed up with research company TNS to learn more about Russian online shoppers and ePayment systems. The research project asked 700,000 Russian users about their platform choice, demographic information, and purchases.
The majority of ePayment users in Russia fall into the 25-34 age bracket. Users access ePayments via desktop and mobile interfaces, with the most common occupations for those users being managers and ‘specialists’ (a popular term for a wide range of professional jobs). The takeaway from this research project is that working professionals use ePayments more than any other occupational group. Other important discoveries were that middle income, married individuals are the most common e-wallet users in Russia. Of all ePayments users, more than half consider themselves new to the payment option. Due to the recent development of ePayments in Russia, it’s no surprise users still see themselves as beginners.
The top categories for e-money purchases include online shopping, mobile top-ups, money transfers, bills, online content (movies, music), online games, and online tickets for events. Users in the age group of 35-44 tend to make more transactions with e-money in these categories than their younger counterparts. However, the youngest group of users aged 20-24 make more purchases for online tickets for events and online content.
Of those surveyed, three quarters used ePayment systems at least once per year. ePayments are still a developing payment method in Russia, but familiarity is widespread – all survey participants are familiar with the payment method.
Almost half of the respondents utilize e-money payments several times per month.
Users pay for their purchases with ePayment systems more on desktops than mobile devices. Survey respondents use the payment methods approximately 15-25% less frequently when on mobile than when on a desktop.
Undoubtedly, retailers considering the Russian market should offer their customers multiple payment options to encourage purchases. Cash, local ePayments, and credit card options should all be available on e-retailers’ checkout pages.
As always, when going global, it’s imperative to remember the local user. In addition to payment options, user demographics and behavior are important factors to consider when catering to your Russian audience and strategizing your move into the Russian market.
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