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J’son & Partners Consulting presents brief results of the research: Internet Trading in Russian Federation: Market Segments Forecast for 20152018.

 

Now over 40 thousand eShops are presented on the market. Home appliances and electronics segment became the largest segment on the Internet Trading market in 2014: its volume was 159.6 bln RUB or 23.4% share of the total market. Hypermarkets & Clothes and Shoes Segments were also prominent in 2014 – 111 bln RUB and 94.3 bln RUB accordingly.

 

Total Internet trading market volume was over 683 bln RUB as of the result of 2014, the annual growth rate for 2010-2014 in average – 40.2%. CAGR is expected as 8.9% during 2014-2018.

 

Brief Market Overview and Market Segments’ Forecast

 

J’son & Partners Consulting forecast: Home appliances and electronics segment will grow slower than Internet trading market during 2015–2018. The key problem is high dependence on the imported goods and expected increase in sales on secondary market.

 

 

Lately, a lot of eShops are expanding the range of goods till the level of hypermarkets. J’son & Partners Consulting’s consultants expect that this tendency will remain and will result in the constant increase of hypermarket’s share in the total market structure.

 

Among the trends for Clothes and Shoes segment, we can specify the general increase of the number of market participants and appearance of targeted eShops. According to J’son & Partners Consulting, growth rates in the segment will correspond to the market rates during 2015–2018 and share in the general structure of the market will remain on the current level. According to the available data, Baby Goods segment was one of the most fast growing in 2012–2013, this tendency will keep going and Baby Goods share will increase in the general market structure by 2018.

 

J’son & Partners Consulting’s experts consider that Car Spare Parts and DIY segments will increase faster than Internet trading market, as there is higher penetration rate and decrease in retail players on the market in these segment. These segments’ shares will more likely expand in the total market structure.

 

In 2015 – 2018 Other Segments will increase as there is an uptrend in penetration of Internet trading and further “exit to online” among representatives of traditional retail business. Forecast for changes in growth rates of main market segments is presented below.

 

 

Key Market Players

 

Ulmart is the most popular among transparent market players: by volume of online profit the company was the leader in 2014. The highest growth was reached by M.Video – 120% growth of sales in 2014.

 

 

In 2014 the most popular segments of Internet trading were Hypermarkets, Clothes and Shoes, Coupon Services and Home appliances and Electronics. In accordance with statistics the highest number of orders was in Coupon Services, Furniture and Books & Multimedia Segments.

 

 

General Market Description

 

According to J’son & Partners Consulting’s estimations, Internet trading market was 683 bln RUB in 2014. In 2010 – 2014 CAGR was 40.2 %, the expected level in 2014–2018 – 8.9 % yearly.

 

 

J’son & Partners Consulting’s experts forecast the decreasing market volume for 5% during 2015 due to the difficult macro economic situation. Afterwards, by 2016 it will be a slight growth and over 20% increase by 2017.  

 

In 2014 the largest share on the market was taken by Home appliances and electronics segment. Next are Hypermarkets, Clothes and Shoes, Baby Goods, DIY and Car Spare Parts.

 

 

According to J’son & Partners Consulting experts’ estimations main payment source in the Internet was still cash. Big changes happened in 1H2014 vs the same period of last year in customers’ preferences – share of e-payments increased twice. Tendency towards decreasing share of cash payments is still going in Russian Federation.

 

 

Main News & Events: Internet Trading Market in 2014     

 

      November 2014: changes in ownership structure of Svyaznoi. Maxim Nogotkov (founder of eShop and retail network Svyaznoi) received notice about the default (due to the debt). As a result, ONEXIM Group and Group Blagosostoyanie received the control over Svyaznoi.

 

      Vimpelcom launched new eShop Beeline. The shop sells phones, tablets, notebooks, photo/video/audio equipment, also gadgets and accessories.

 

      September 2014: Merger of Sotmarket, Utinet and Hypermarket E96 shops. Legally binding contract was executed.

 

      November 2014: Citilink announced about changes in business-model: the company is planning to sell on its platform goods from other shops and become a marketplace. The project will be launched not earlier than 2015.

 

      Ozon launched new market. In July 2014 Ozon launched fulfillment Ozon Production services – storage, packaging, collecting payments and return of goods.

 

      October 2014: Retailer Auchan has started e-sales of some non-grocery goods in 104 Russian cities.

 

      2014: Technosila received assets of St.Petersburg’s retail network Technoshok.

 

      Lamoda attracted 15 mln.USD investments from International Finance Corporation.

 

      In the beginning of March 2014: GC ObuvRus (Russian Shoes) opened eShop with shoes and accessories Westfalika.ru.

 

      October 2014: Ellos.ru stopped to accept orders in Russia.

 

      Internet Initiatives Development Fund invested 110 mln.RUB in eShop Babadu (Baby Goods).

 

      November 2014: eShop Detsky Mir (Children World) connected self-pick up spots by Ozon.

 

      August 2014: Yandex.Market launched separate platform for Baby goods trade.

 

      October 2014: State Duma announced about Law on Circulation of Drugs, which allows to close pharmacies without judicial decision, if addictive substances and drugs, not registered in Russia, are presented.

 

      June 2014: one of the largest pharmacies Piluli.ru and Drugstore Tech terminated merger agreement.

 

Internet Trading Market Trends and Tendencies

 

Among the main trends and market tendencies in Russian Federation, J’son & Partners Consulting’s experts specify the development of multi channel sales strategy: largest players are developing retail networks simultaneously with internet trading. There is a consolidation of separate segments: M&A of largest players – Sotmarket, Utinet and Hypermarket E96 in 2014. There is also a development of mobile apps on Internet trading market; growth of mobile advertising in apps and development of mobile payments.

 

Business model - market place - is becoming more and more appealing in 2014. For instance, Yandex.Market and Sapato.ru became eShops aggregators. There is a hyper competition in separate Internet trading segments: a lot of players in the segments - Home appliances and electronics, Clothes and Shoes, Food delivery – due to the low “entrance” barriers and high popularity of the segment among customers. The share of e-books is increasing in the commodity structure of Books and Multimedia segment. Some segments, such as Software and Medicine are depending on external factors: high share of illegal content, dependence on governmental regulations.

 

Market Forecast for 2015

 

According to J’son & Partners Consulting, in 2015 market volume will decrease for 5% ($); the tendency towards players’ consolidation and allocation of niche eShops will keep going. It is possible that due to ruble depreciation, cross border trade volume will decrease. In accordance with many market participants’ opinions, the tendency towards expansion of online hypermarkets (which offer different range of products) will remain in 2015. Further development of mobile apps by participants of Internet trading market is forecasted. By different estimations, stagnation and decrease in the number of coupon services is expected. J’son & Partners Consulting’s experts predict the further growth of non tangible goods share in the commodity structure of Books and Multimedia segment. Goods items will prevail in such categories as Car spare parts, DIY, Home appliances and electronics in 2015 in regions due to low development of retail networks and low level of Internet penetration rate.

 

Conclusion

  • Total Internet trading market volume was over 683 bln RUB as of the result of 2014, over 40 thousand eShops are presented on the market.
  • The largest segments are Home appliances and electronics, Hypermarkets.
  • Classical distribution via Internet channel dominates on the market, despite the expansive development of multi channels sales. It is expected that the growth rates of retail business will slow down among market players due to economic situation.
  • The most popular segment is Hypermarket, the highest number of search inquiries in Yandex – Coupon services.
  • Forecast: consolidation of players in the main segments and further transition online by largest eShops, goods items will prevail in regions.
  • The volume of cross border trade will decrease in 2015, 5% market fall.

 

Detailed Results of the Research are Presented in the Full Version of the Report: Atlas of Internet Trading in Russian Federation: Segments Forecast for 2015–2018

 

1. Methodology

2. Internet Trading Market Volume, Structure and Dynamics

3. The Analysis of Internet Trading Segments

4. Internet Trading in 2015-2018 – Forecast per Segment

4.1. Internet Trading Segments’ Growth Factors and Barriers in Russian Federation, 2015 – 2018

4.2. Internet Trading Sub-Segment Market Structure in Russian Federation and its Changes in 2015 – 2018

5. The Analysis of Customers’ Preferences by Localities Type in Russian Federation

6. Home Appliances and Electronics Segment

6.1. Current state, qualitative and quantitativeestimation

6.2. Trends and tendencies

6.3. Profiles of the largest eShops of the segment

7. Segment – Hypermarkets

7.1. Current state, qualitative and quantitativeestimation

7.2. Trends and tendencies

7.3. Profiles of the largest eShops of the segment

8. Segment – Cloths and Shoes

8.1. Current state, qualitative and quantitativeestimation

8.2. Trends and tendencies

8.3. Profiles of the largest eShops of the segment

9. Segment – Baby Goods

9.1. Current state, qualitative and quantitativeestimation

9.2. Trends and tendencies

9.3. Profiles of the largest eShops of the segment

10. Segment – Car Spare Parts

10.1. Current state, qualitative and quantitativeestimation

10.2. Trends and tendencies

10.3. Profiles of the largest eShops of the segment

11. Segment – DIY

11.1. Current state, qualitative and quantitativeestimation

11.2. Trends and tendencies

11.3. Profiles of the largest eShops of the segment

12. Segment – House Goods

12.1. Current state, qualitative and quantitativeestimation

12.2. Trends and tendencies

12.3. Profiles of the largest eShops of the segment

13. Segment – Furniture

13.1. Current state, qualitative and quantitativeestimation

13.2. Trends and tendencies

13.3. Profiles of the largest eShops of the segment

14. Segment – Food Delivery

14.1. Current state, qualitative and quantitativeestimation

14.2. Trends and tendencies

14.3. Profiles of the largest eShops of the segment

15. Segment – Goods for Sport and Leisure

15.1. Current state, qualitative and quantitativeestimation

15.2. Trends and tendencies

15.3. Profiles of the largest eShops of the segment

16. Segment – Cosmetic and Perfume

16.1. Current state, qualitative and quantitativeestimation

16.2. Trends and tendencies

16.3. Profiles of the largest eShops of the segment

17. Segment – Books and Multimedia

17.1. Current state, qualitative and quantitativeestimation

17.2. Trends and tendencies

17.3. Profiles of the largest eShops of the segment

18. Segment – Coupon Services

18.1. Current state, qualitative and quantitativeestimation

18.2. Trends and tendencies

18.3. Profiles of the largest eShops of the segment

19. Segment – Jewelry and Watches

19.1. Current state, qualitative and quantitativeestimation

19.2. Trends and tendencies

19.3. Profiles of the largest eShops of the segment

20. Segment – Software

20.1. Current state, qualitative and quantitativeestimation

20.2. Trends and tendencies

21.3. Profiles of the largest eShops of the segment

21. Segment – Photo Equipment

21.1. Current state, qualitative and quantitativeestimation

21.2. Trends and tendencies

21.3. Profiles of the largest eShops of the segment

22. Segment – Goods for Animals

22.1. Current state, qualitative and quantitativeestimation

22.2. Trends and tendencies

22.3. Profiles of the largest eShops of the segment

23. Segment – Medicine

23.1. Current state, qualitative and quantitativeestimation

23.2. Trends and tendencies

23.3. Profiles of the largest eShops of the segment

24. Segment – Mini Holdings

24.1. Current state, qualitative and quantitativeestimation

24.2. Trends and tendencies

24.3. Profiles of the largest eShops of the segment

25. Segment – Other Segments

25.1. Current state, qualitative and quantitativeestimation

25.2. Trends and tendencies

25.3. Profiles of the largest eShops of the segment

26. Analysis of the largest delivery operators and services

27. Analysis of the largest fulfillment operators in Russia

28. Data bank – 174 largest eShops, including:

28.1. Name of the company

28.2. Internet trading segment

28.3. Legal name

28.4. Revenue, 2011-2014

28.5. Revenue from Internet Trading, 2011-2014

28.6. eSales CAGR, 2011-2014

28.7. eSales Share of the Total Revenue, 2011-2014

28.8. Other Financial Indicators (Revenue from eSales, net profit from eSales, commercial expenses, share of commercial expenses from eSales, eSales profitability by net profit)

28.9. Number of eShop’s employees

28.10. Revenue per 1 employee in 2014

28.11. Number of commodity items

28.12. Number of self pick-up spots

28.13. Founder/General Director of the Company

28.14. Number of Retail Spots

29. Trends and Tendencies

30. List of companies mentioned in the Report

      174eShops;

      21operators and delivery services;

      14 fulfillment operators:

 

 

 

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.

 

J’son & Partners Consulting presents brief results of the research: Internet Trading in Russian Federation: Market Segments Forecast for 20152018.