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


The tendency to redirect the non-core processes to the outsourcing companies among distance selling market participants is very strong in the Western Europe, while it is only on the early stages of development in Russia. One of such processes is fulfillment – a range of logistic processes, such as acceptance, storage, batching, sorting, packaging, stamping, goods dispatch and orders processing. The fulfillment market is developing first of all due to the growth of Internet trading: according to the J’son & Partners Consulting’s experts, the yearly average Internet trading market growth rate in Russia is 33.8 %, its volume reached 683 bln RUB in 2014. J’son & Partners Consulting’s experts forecast further growth of Russian fulfillment market, as companies will optimize its costs in the current unstable economic situation and use outsourcing for warehouse processes.


Key Definitions


Outsouring isthe transfer of business processes to be performed by another company – contractor.


3PL (Third party logistics) – partial outsourcing regarding the transport-logistic business processes.


Internet-trading – the process of tangible and non-tangible goods distribution via specialized e-platforms, which offer remote order placement.


Fulfillment – this is a complex of solutions for goods distribution for companies, which trade via Internet. Fulfillment includes:


  • Goods’ storage;
  • Orders’ acceptance;
  • Orders’ processing;
  • Batchingandpackaging;
  • Organization of delivery;
  • The collection of funds from customers;
  • The processes of returns.

Brief Description of Internet Trading Market in Russian Federation


According to J’son & Partners Consulting, in 2014 Russian internet trading market reached 683 bln RUB, CAGR is expected on the level of 8.9% yearly during 2014-2018.



In 2015 J’son & Partners Consulting’s experts forecast market’s volume decrease for 5% due to the difficult macroeconomic situation. The recovery is expecting by 2016 and growth for more than 20% by 2017.


Global Fulfillment Market


The global fulfillment market was 3.48 bln USD in 2014. It is expected that average yearly market growth will be 9.8% during the next 5 years and the market will reach 5.55 bln USD by 2019.



According to the public data, the largest global fulfillment operator is Amazon. The map of global fulfillment market is presented below.



As of beginning of 2012, 1686 companies provided fulfillment services in USA. Over 60 thousand people are working in this sphere. In USA only 26% of the internet trading market is using its own resources, it says about fulfillment development in the country.


Russian Fulfillment Market


Russian fulfillment market is on early stage of development. According to the available data, market volume is estimated in 7.8 bln RUB. The key driving force for market development is the development of distance selling including e-trade. J’son & Partners Consulting’s experts forecast that fulfillment market will reach 13.3 bln RUB by 2018.



Despite the forecasted fall of Internet trading market for 5% in 2015, J’son & Partners Consulting’s experts expect market growth, as due to the current economic situation, companies will optimize its costs and use outsourcing for warehouse business processes. The market is not formed yet, but already has a lot of segments and its volume is not more than 80-100 mln deliveries to individuals. There are around 60 companies that offer outsourcing fulfillment services, but 10 largest of them perform major part of operations. Due to industry experts’ estimations, 10-15% of goods are now being delivered via fulfillment operators, while in the developed countries this share is 50%.


There are the following advantages of outsourcing fulfillment for market participants:

  • Cost optimization;
  • Lower capital costs, investments in IT, warehouse, decreasing costs on employees;
  • An opportunity to monitor KPI;
  • Risks diversification;
  • Improving of quality and increase of speed formation of ready-to deliver packages;
  • Opportunity for customers to choose the type of delivery and method of payment.


Market participants specify the following disadvantages of outsourcing fulfillment:


  • Dependence on fulfillment-operator;
  • Information risks;
  • Availability of additional sector in the delivery chain, which slows down the processing of claims.


Latest Activity in the Industry



  1. IML Company, that provides logistic services for eShops, is starting the implementation of full circle fulfillment services. The company also is expanding its activity geographically.
  2. Edostavka.ru announced about the launch of fulfillment services in September 2014. The fulfillment services will be provided based on company’s own warehouse in Moscow.
  3. Ozon has launched fulfillment market in July 2014.


Largest Companies

Russian fulfillment market is pretty young and has started its development only in 2011. But as for now, there are a variety of market players, among which it is worth to mention Arvato, http://www.betaproduction.ru/, http://www.spsr.ru/, eSolutions and many others. The map of Russian fulfillment market is presented below.



Geography and Facilities


The warehouses of 14 largest market players are situated mainly in Moscow and the region. Facilities of companies vary from 4 thousand sq.m. till 600 thousand sq.m. (among players which also develop 3PL stream).



Electronics and clothes segments prevail in the general structure of the most prominent market players. This tendency is being explained by the dominant shares of these segments on the distance selling market in the Russia Federation.




  • Russian Fulfillment market is on early stage: first players appeared in 2011.
  • Russian fulfillment market volume was estimated in 7.8 bln RUB in 2014; the expected increased volume will be twice higher (in $) by 2018.
  • In Russian Federation the key driver for fulfillment development is the growth of distance selling; deterrent – availability of resources for business development.
  • The expansion of geography is expected among the largest fulfillment operators and transformation of 3PL-operators into fulfillment players.


Experts Opinion

In terms of the research J'son & Partners Consulting’s experts surveyed the representatives of Russian fulfillment market.

Evgeny Schepelin, eTraction Director


1. Current Russian fulfillment market volume, state and perspectives, your opinion?


We can only speak about fulfillment market in the segment Clothes, and to our opinion, it is still on early stage. In fact, there are only several market players that are able to provide good quality services and influence the market development. Although the demand from the market is stable and is above market players capabilities. We are waiting for new players in the coming future and also the transformation of classical 3PL-operators into fulfillment players.


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


Unfortunately not all market players are open about their volumes and do not reveal project’s indicators. We are sure that we have a leading position on the market, especially in our category. Currently, the commodity turnover of our clients is over 6.5 bln RUB per year or more than 1.2 mln orders, we storage over 700 thousand items in our resources.


3. What are the main market trends and tendencies nowadays?


As I was specifying before, one of the obvious market trends – appearance of new players based on 3PL operators and also on the base of courier services. Additionally, due to the demand surplus, small projects appear (till 3 thousand sq.m.), which quite fast receive orders from small eShops, and cover this niche.


4. Can you specify key market drivers and deterrents?


Growth driver is the demand and growth of e-commerce segment in the Russian Federation, main deterrent – availability of resources (base). Fulfillment is a low margin business, which operates more effectively by using its own facilities that are not that many in Russia. Last year revealed that small projects of leased platforms are showing losses and leaving the market. Increasing number of players with its own infrastructure and opportunity to work with all types of goods will put small players out of the market. Fulfillment is the infrastructural business in the first place. Another very important barrier – lack of qualified specialists in this segment same as in e-commerce. This forms a range of projects without expertise which will obviously end very soon.


Aleksey Zhukov, SPSR, Marketing Director


1. Current Russian fulfillment market volume, state and perspectives, your opinion?


Fulfillment market is a very young industry and that is why it is difficult to make any estimation about its volume. According to our data, the volume of processed orders by outsourcing fulfillment centers for distance selling industry was around 22 mln in 2014. In monetary terms this number varies due to the fact that not all clients use full range of fulfillment services, choosing only the processes they need at the moment. This is around 5.0-6.5 bln RUB. The popularity of outsourcing fulfillment lately is increasing. This is also due to the economic situation. Companies choose more properly ways to cut costs, and try to “cut” processes, which are not the main focus for them.


The picture, which illustrates this tendency, is the market launch of outsourcing fulfillment companies used by large representatives of distance selling players, which decided to in-source fulfillment. Now they face the problem of facilities fulfillment and market launch. This is an attempt to cut costs on infrastructure maintenance.


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


SPSR Express has strong position in the sphere of fulfillment and is in the TOP5 of largest fulfillment operators in Russia. Despite the increasing number of players, the level of competition is relatively low, as potential demand is above the current capacities of companies, which offer services for outsourcing.


3. What are the main market trends and tendencies nowadays?


We are experiencing the increased interest from internet trading players and representatives of traditional retail. Retail experiences subscribers churn toward online channels in terms of the crisis, and in order to compensate this, traditional retailers are looking forward to explore internet sales, and keep in mind the concept of omnichannel.


4. Can you specify key market drivers and deterrents?


There are at least 2 growth drivers – the first one is the growth of internet trading. It is slowed down lately, but the potential of distance selling is still enormous. eShops pay more attention to costs and key processes. More and more often it is possible to hear that it is needed to distinguish the management of delivery chains and warehouse processes. Second growth driver – focus of traditional retailers on e-sales. The barrier is the lack of specialists in this sphere.


Wouter van der Wiel, Partner, New Clever Things


1. Current Russian fulfillment market volume, state and perspectives, your opinion?


It is important to take into consideration the following points in the process of current market volume estimation:


  • There is no statistics about the market, which can be a base for calculations and forecasts;
  • Outsourcing for e-commerce market is on early stage of development.


It is relatively difficult to name any relevant number, as market is not completed yet. From over 40 thousand e-commerce market participants, major part of them are small companies and not ready to use outsourcing. Key market players that are fast developing have already formed business processes due to the necessity in safe infrastructure. The availability of such infrastructure inside, distract their attention from their main business and it is creating potential market for outsourcing services that can be at the same level of safety and costs as internal business processes. Small online players, which grow till the level when they are not able to process all the orders, is another point for potential market segment growth – fulfillment in e-commerce. Currently e-commerce fulfillment market is far away from maturity and only several companies are offering “acceptable” services.


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


  • Due to the crisis in Russia, market situation worsened – 25% retail market decrease. Despite the increase in online sales, we are not observing major investments of offline companies in e-commerce. Foreign players are now more uncertain in regard to investments in Russia and international brands postpone the launch on Russian e-commerce market. This factor also negatively influenced the market. Many small and young fulfillment companies had stopped its activity due to the lack of clients. Some players are trying to keep a stable position, but they lose clients due to the low efficiency and flexibility, and sometimes because of high prices.
  • Another trend - online retailers are trying to sell their infrastructure as a service (with higher price than on outsourcing market) in the hope to become more profitable and to cover the investments. The provision of services, although, is not their main activity and to provide good quality, flexible service to customers will be a very difficult task for them, while volumes and demands of external clients will grow.


3. What are the main market trends and tendencies nowadays?


  • Since 2008 until now, not that many new processes have been developed on the market of services for e-commerce in regard to delivery chains and warehouse procedures. There were no major investments in innovations, automatization and efficiency. There are several reasons for this. First of all, major share of current fulfillment companies had been established by online retailers, which try to monetize their infrastructure and at the same time are not interested anymore in the further investments. Second reason is that the work force still is relatively cheap that decrease the demand on large-scale investments in automatization. If salaries grow faster than the inflation growth rate, there will be a necessity in investments in automatization and improvement of efficiency. But this tendency is not yet observed among service providers.
  • Several eShops became more active in this segment in 2011. There was a transfer of services from e-commerce participants to 3PL players in 2014. Among them – large international players, which work with FMCG sector, online and offline trade, which demand from their 3PL providers the implementation of fulfillment services. There is a tendency these days – inability of 3PL providers to offer services for e-commerce sector, by having working infrastructure. They don’t have enough experience with technologies and processes, which “live” only in e-commerce. This tendency will keep going, although several 3PL providers will expand the range of services for e-commerce market. But it will take time.
  • Funds are more active in this sector and are searching for M&A deals, but the key problem is that companies are not developing in the view of efficiency, same as, companies’ scale, and makes these companies not attractive. The interest of funds will remain, but will they invest in local or foreign 3PL provider – is still an open question.
  • Fulfillment for e-commerce at the same time will be considered as commodity resource.


4. Can you specify key market drivers and deterrents?


  • Market growth. As expected, e-commerce market growth is limited to double digit share of retail trade; the potential for e-commerce services is almost unlimited.
  • Mentality. Fulfillment – relatively new concept on Russian market and retailers should understand the similarity of this service with 3PL.
  • Reputation. Many start-ups used fulfillment as a way to clients, but in fact, it was a sale of logistic procedures as complimentary services. It leaded to lower service quality and creation of bad reputation.
  • Focus. Online retailers that provide fulfillment services, which are not their core business, face the conflict of the interests.
  • Flexibility. Current market players are working with old technology that can lead to negative experience with outsourcing fulfillment and stimulate customers to develop its own logistic processes.


Dmitry Lobanov, Head of E-commerce Department, Itella in Russia


1. Current Russian fulfillment market volume, state and perspectives, your opinion?


Fulfillment market shows stable growth yearly in Russia, there are tens of players and this number is increasing. There is even an experience, when companies leave the market. The growth is due to the development of e-commerce in the country and active Internet development same as multichannel sales policy by large offline retailers, launch of new e-commerce market players.


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


Fulfillment as a process of orders fulfillment can be identified as the category – production, where each commodity, based in storage and package materials – is raw material, and the processes of sorting, packaging – the production. i.e. packed order, ready for delivery via courier service or for upload in the car – is a readymade good.


Our company works together with eShop in order to build more effective procedures from the point of efficiency and economy, by providing an alternative to the client. For example, the client can choose the type of storage, package, choose the good or we can help with recommendation.


3. What are the main market trends and tendencies nowadays?


The trend lately – online retailers, which experienced decrease in sales due to the changed economic situation, and those that processed internet orders based on their own facilities, now have a chance to cut the staff partially. In this situation they make a decision – to start sales of facilities to external clients, most often by transferring part of their primary costs on the new, external eShops.


4. Can you specify key market drivers and deterrents?


Main driver for fulfillment market development in Russia – is the development of the industry – e-commerce, for which even in times of crisis the growth is forecasted. Even despite the increasing “threat” from Chinese internet-giants for local e-commerce, Russia is the country with large and continuously growing e-audience which makes purchases. Second driver – is still the transfer of traditional retail to online and multi-channel.


The key barrier, in my opinion, is that eShops are still choosing construction of their own procedures for e-sales. I think it is not perspective for the long term, as the key competence of eShop – is to focus and to develop e-sales. Professionals should deal with procedures; there should be equipped spaces for any procedures with goods, including fire systems and video monitoring, access control.


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


1. Introduction

2. Methodology of the Report

3. The Analysis of the Global Fulfillment Market

3.1. Market Volume and Dynamics, in $, 2012–2018

3.2. The Analysis of the Main Types of Services

3.3. The Analysis of Facilities

3.4. The Analysis of Geographical Structure

3.5. The Analysis of the Current Business Market Models

3.6. Profiles of the Largest Players

3.6.1. Amazon Fulfillment Services’s Profile

3.6.2. Shipwire Fulfillment’s Profile

3.6.3. Aero Fulfillment Services’ Profile

3.6.4. Fulfillment Works’ Profile

3.6.5. Rakuten Super Logistics’ Profile

3.6.6. Profiles of Other Players

4. The Analysis of Internet Trading Market in the Russian Federation

4.1. Market Volume and Dynamics, in $, 2008–2018

4.2. The Analysis of Internet Trading Segments

4.3. Market Trends and Tendencies

5. Brief Market Overview: Warehouse Realty in Russian Federation

5.1. The Analysis of the Market in Moscow

5.2. The Analysis of the Market by Regions

6. The Analysis of Fulfillment Market in Russian Federation

6.1. Market Volume and Dynamics, in $, 2013–2018

6.2. Market Structure

6.3. The Analysis of Key Types of Services

6.4. The Analysis of the Facilities (Productive Capacities)

6.5. The Analysis of Geographical Structure

6.6. The Specialization of the Largest Operators by Types of Goods

6.7. Profiles of Main Market Players

6.7.1. Itella

6.7.2. Arvato

6.7.3. eTraction

6.7.4. Beta Production

6.7.5. Ozon Production

6.7.6. Profiles of Other Players

7. Russian Fulfillment Market Trends and Tendencies

8. 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.