×

 

J’son & Partners Consulting presents brief results of the research: Express Delivery Market in Russian Federation.

 

Russian express delivery market is showing a stable growth for the last four years. In 2014, its volume reached 52 bln RUB. The market dependence on e-trade is becoming more and more obvious, and according to industry’s experts, e-trade is the key driver for express delivery market in Russia. Among market tendencies also can be mentioned the appearance of new players, which specialize in logistic outsourcing for eShops. Despite the decreasing growth rates, it is expected that market volume will reach 55.6 bln RUB in 2015.

 

Express delivery market is the segment of transport-logistic services market. In accordance with classification approved in Europe main transport-logistic services market segments are:

 

  • Cargo and forwarding services;
  • Package logistic services, which include goods’ storage and distribution;
  • Managing logistic, including the services on logistic business processes optimization.

 

Main share of transport-logistic services in Russia is taken by cargo services.

 

Global Express Delivery Market

 

Global express delivery market is estimated of 216 bln USD. Currently, the share of Russian express delivery market (in US$) is estimated 0.5% of the global one. German company Deutsche Post DHL is the global leader with market share of 32%. Company earnings reached 69 bln USD in 2014. UPS and FedEx are the following ones with market share of 27 % and 21 % accordingly. In general market leaders have 80% of the market.

 

 

Express Delivery Market in Russia

 

Russian express delivery market is showing a stable growth. According to J’son & Partners Consulting’s estimations, the market increased 1.7 times since 2011 and it reached 52 bln RUB. In 2011–2014 CAGR was 14 %.

 

 

But growth rates dropped drastically: in 2011 – 2012 - 27% increase, in 2014 – only 10.5%. In 2015 J’son & Partners Consulting expects further slowdown of the rates due to the economic situation and decreased purchasing power of population.


Main Events on the Express Delivery Market

 

The following events happened lately in the operator delivery segment:

  1. Russian Post organized delivery service for eShops.
  2. ECE postponed implementation of duty on purchases in foreign eShops until 1st January, 2016 – till Customs Code EEU will take into force. Until then in countries - members of ECE, duty free purchases system will remain.
  3. Strategic partnership between logistic operator Itella and Hermes FullfillmentGmbH. This strategic cooperation was established in order to help European clients to carry on business on Russian e-commerce market.
  4. Russian Post announced about the establishment of its own trade platform. Joined service with e-service Biglion has started on 1st November.
  5. AliExpress launched the service for payments from cell phone account in March 2015.
  6. On 5 February 2015 AliExpress, an international internet-platform of retail trade and SPSR Express company announced about cooperation, in terms of which SPSR Express is becoming the first Russian authorized AliExpress express delivery company.

 

Largest Market Players

 

According to the available data, the highest share of express delivery market in Russia was taken by DHL. Among largest are also DPD, Pony Express, EMS Russian Post and Major Express.

The map of Russian express delivery services is presented below.

 

 

Express Delivery for eShops

 

There are also companies on the express delivery market, which specialize on delivery for eShops. Among them:

 

  • Im-Logistics,
  • http://axiomus.ru/,
  • http://www.maxi-post.ru/,
  • http://www.algocom.ru/,
  • Shop-Logistics.

 

According to the public information, in Moscow the number of orders from e-delivery is around 40 mln. deliveries per year. Low level of this segment consolidation is being marked, as large market players have not more than 5% of the segment.

 

Main Services and Geography of Delivery

 

J’son & Partners Consulting’s experts specify the following services, which express delivery companies offer for eShops: courier delivery, storage, grading and batching.

 

According to industry experts’ opinion, the market is growing due to market players’ expansion. All players operating on the market open their offices in medium and small cities. Major market participants, which are working in the express delivery sphere, offer services all over the Russia. Some of them deliver goods to CIS and other countries. Moscow, St.Petersburg and other large cities have around 70% of all deliveries’ volume.

 

Market is expanding because of regions despite the prevailing share of Moscow and St.Petersburg in the delivery volume.

 

According to the public data, half of the market volume (pcs.) belongs to B2C segment – mainly catalogue sales and e-trade. Many industry’s experts expect further market development based on e-trade. But the volume of eShops’ orders dropped approximately for 9% in 2Q2014.

 

Automated Parcel Terminals (APT): Launch and Development

 

There are market players on Russian express delivery market that are developing APT networks – terminals with automated boxes for goods’ storage and stock out. Due to J’son & Partners Consulting’s estimations, in 2014 Russian APT market volume was 2.8 bln RUB or 6.7% of the total Russian express delivery market. According to the available data, 38% of all orders, which customers pick-up by themselves, are going via APT.

 

PickPoint Company is APT market pioneer in Russia. In 2014 company’s share in the APT segment is estimated in 80 %. QIWI Post and LogiBox are also among the largest companies.

 

Explosive development of e-trade facilitated the growth of the delivery market. But due to the difficult economic situation, which can negatively influence the geographical expansion of the players and with the expected e-trade decrease, the delivery services also will experience slowdown in growth rate in a shirt-term period. It is also expected that the main accent will refocus towards companies’ cost deduction.

 

Conclusion

 

  • Express delivery market was showing growth for the last four years in Russia, but the decrease is expected in a short-term perspective.
  • Automated parcel terminal segment is increasing in the country.
  • Key market growth are the development of e-trade in Russia, geographical expansion of market players and increasing Internet penetration.
  • Among the key market deterrents are the following: lack of infrastructure development and current economic situation.
  • Higher competition is forecasted for 2015 due to market growth decreasing rates.
  • There is a tendency to decrease logistic costs in B2B sector. Decreasing growth rates of Russian eShops is observing in B2C segment.

 

Expert Opinion

 

In terms of the research J'son & Partners Consulting's specialists surveyed Russian express delivery market representatives and found out their opinion on the market current state perspective:

 

Sergey Zhukov, Marketing Director, SPSR Express

 

Express Delivery Market in Russia: current volume, state and perspectives – your estimations?

 

Market volume of express delivery is around 54 bln Rub. Market growth rates slowed down due to economic situation, as express delivery is a mirror of population’s activity. B2B segment experiences mostly the negative influence, maybe there will be even a negative dynamic. B2C segment feels much better, as eTrade is the main driver – growth rates slowed down but the potential is almost unlimited. In general, according to our estimation, express delivery market will grow this year, but growth rates will be lower than in 2014 – around 6-9%.

 

How do you estimate your current position and level of competition on the market?

 

SPSR Express at the moment is showing the most dynamic growth among largest companies. The company finished 2014 with revenue growth rate at the level of 27% vs 2013. Today the company is in TOP 3 among express delivery companies. According to our forecasts, due to the low market growth the level of competition will increase. It will be more obvious in B2C segment.

 

Key market trends and tendencies?

 

Decrease of logistic costs is the trend in the B2B segment. Term of the delivery is becoming the key in the choice of contractor. Clients cut the costs by consolidation of parcels and choose more economically efficient product. In B2C segment – decreasing growth rates of Russian eShops. The growth of cross-border deliveries is also slowing down – previously, main traffic of express deliveries was from western eShops, this flow is decreasing in December 2014. Russian customers re-focused on Chinese eShops due to currency fluctuations.

 

What market drivers and deterrents you can specify on the market at the moment?

 

Key market deterrent is the current economic situation – decreasing purchasing power of the RUB, depreciation, decreasing population’s incomes. But economy also can become a market driver, maybe not for today, but in the future. Russia has low share of logistic-outsourcing, and in difficult times, companies more closely estimate their costs, and more and more often they refuse from their own infrastructure and use outsourcing. Besides, crisis is playing the “cleaning” role – non-efficient companies, it is time for market consolidation.

 

Alexey Bezdetkin, Commercial Director, Boxberry

 

Express Delivery Market in Russia: current volume, state and perspectives – your estimations?

 

According to different sources, express delivery market showed increase during the last years - 30–40 %. This tendency was observed until 2015. Only time will show, how the market will behave this year. According to our forecasts, the growth will continue, but its growth rates will decrease. More likely, this indicator will be not more than 5–10 %.

 

eTrade market development reached 700 bln RUB in Russia by the end of 2014, it was the key growth driver for express delivery. Decrease in e-commerce turnover during this year will result in bankruptcy of small market players and some of them will have to leave the market, the competition in this sphere will be more intense, but as a result, the services’ quality will increase.

 

Also, more and more online-trade companies work with outsourcing companies in the sphere of storage, packing and delivery of orders, while not that long ago they did everything by themselves.

 

How do you estimate your current position and level competition on the market?

 

Boxberry is in TOP 10 on the delivery market for e-commerce. We also in TOP 5 among companies, which deliver orders to Russia from foreign Eshops. Boxberry works in 130 cities and provide 200 pickup spots, courier delivery is available in 80 cities. We deliver orders from eShops, which are situated in three part of the world. Delivery market is heterogeneous in Russia. This sphere is interesting for many companies in Moscow and St.Petersburg, where the level of competition is very high, while in regions it is not that widely popular. In general, only 5-10 market players can offer full-circle (it means developed network with self-pickup and courier delivery in regional center) delivery to regions. Companies, which can offer delivery from international eShops is even less, as it is very complicated technology with high costs and foreign partners demand expanded terms to the network’s size, quality of work, terms of delivery.

 

Key Market trends and tendencies?

 

  • Delivery Services

 

Companies, which will offer package delivery services, wide range of additional services for eShops and customers, with expanded network of self-pickup spots with high quality of work will dominate on the market.

 

Today eShops pay more attention to the financial stability of their partners, its history and the level of development of IT services. Requirements become sever to the level of client service. Previously, delivery term was the key point. Now the quality of service and an opportunity to choose the most suitable time for delivery and method of payment are among priorities. Internet-sellers are interested in storage, batching, delivery methods, package offers (partial delivery, card payments, delivery on weekends etc.), fast work with cash return to eShops. All this can facilitate the interest to the current fulfillment operators, but there is no reason to wait that there will be many new ones.

 

The volume of cross-border trade is increasing all the time: in 2013 – 20% of all online purchases were made in foreign eShops, in 2014 this indicator increased for 30%. Well, it’s obvious that this growth will slow down due to ruble’s depreciation.

 

  • Customers

 

Customer loyalty to purchases in the eShops is increasing. It can especially be seen in regions: number of orders with delivery to regions is growing, and more likely, this tendency will keep going. Self-pickup is becoming more and more appealing for clients. Users save and choose the cheapest delivery ways, despite the fact that they need to go somewhere to pick-up goods. On the other hand, the number of self-pickup spots is increasing, they are close to customers’ home or work, and they can pick-up goods when it is convenient for them and they don’t have to wait (couriers). In the coming future the share of courier delivery can drop and the number of self pick-up spots and automated parcel terminals increase.

 

Users also have started more and more often pay for goods via banking cards and not by cash.

 

What market drivers and deterrents you can specify on the market at the moment?

 

Drivers: increasing number of cities for delivery, decreasing terms of delivery, higher competition, availability of new goods online, Internet penetration, development of services (factoring for eShops and loans for purchasers).

 

The only possible barrier is the difficult economic situation in the country and as a result, increasing prices on goods and decreasing purchasing power.

 

Detailed Results of the Research are Presented in the Full Version of the Report: Express Delivery Market in Russian Federation

 

Introduction

  1. Methodology
  2. Analysis of Global Express Delivery Market

2.1.Market Volume and Structure in 2014

2.2.TOP Largest Market Players’ Profiles

  1. Russian Market of Logistic-Transport Services: Volume, Dynamics and Forecast ($), 2008–2017
  2. Russian Express Delivery Market: Volume, Dynamics and Forecast ($),2011–2015
  3. Industry’s Legislation in Russian Federation
  4. Analysis of Express Delivery Market in Russian Federation

6.1.Market Structure

6.2.Analysis of Types of Services

6.3.Standard Offers

6.4.MarketPlayersbyRegion

6.5.Analysis of Delivery Terms

6.6.Analysis of Delivery Prices

6.7.Profiles of Largest Players

  1. eShopsDeliverySegment

7.1.Segment’s Volume, Dynamics and Forecast (pcs.) in 2012–2015

7.2.Segment’s Structure

7.3.Analysis of Types of Services

7.4.MarketPlayersbyRegion

7.5.Analysis of Delivery Terms

7.6.Analysis of Delivery Prices

7.7.Profiles of Largest Companies in the Segment

  1. Automated Parcel Terminal Segment

8.1.Segment’s Volume and Dynamics in pcs. and $

8.2.Market Forecast for 2015–2019

8.3.Segment’s Structure by Key Market Players

8.4.Segment’s Structure by Region

8.5.Standard Offers

8.6.Profiles of Largest Companies in the Segment

  1. Trends and Tendencies
  2. List of Companies, Mentioned in the Report

 

This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.