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J’son & Partners Consulting presents short results of the research: Russian Online Shopping Market, Results of 2014.

 

In 2014, Russian online shopping market volume exceeded 683 bln RUB. The average annual growth rate was 42.4% for 2008-2013. The Russian online shopping market amounts over 40 thousand companies. Largest segments of the market are still “Hypermarkets” and “Home appliances and electronics”.

 

Online Shopping is the process of tangible and non-tangible goods sale via specialized e-platforms, which offer remote ordering.

 

According to J’son & Partners Consulting estimations, the Russian online shopping market has reached 683 bln RUB in 2014. In 2014-2018 CAGR is expected to be at 7% per year.

 

J’son & Partners Consulting experts forecast the decrease of market volume by 5% during 2015 due to the difficult macroeconomic situation. Afterwards, by 2016 a slight recovery and the market growth of more than 20% by 2017 are expected.

 

According to J’son & Partners Consulting experts’ estimations the main payment source in the internet is still cash. In the 1H2014 a shift in customers’ preferences happened, which doubled the share of e-payments. There is a further downward trend in the share of cash payments.

 

Main news & events of the market

 

  •       November 2014: changes in ownership structure of Svyaznoy. Maxim Nogotkov (founder of the online shop and the whole retail chain Svyaznoy) received notice about the default (due to the debt). As a result, ONEXIM Group and Group Blagosostoyanie received the control over Svyaznoy.

 

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

 

  •       September 2014: Merger of Sotmarket, Utinet and E96 shops.

 

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

 

  •       October 2014: Retailer Auchan 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 an online shop with shoes and accessories Westfalika.ru.

 

  •       October 2014: Ellos.ru stopped accepting orders in Russia.

 

  •       Internet Initiatives Development Fund invested 110 mln RUB in baby products online shop Babadu

 

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

 

  •       August 2014: Yandex.Market launched a separate platform for baby products trade.

 

  •       October 2014: The State Duma announced about the examination of the 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 the merger agreement.

 

Traffic by key market segments

 

In 2014 highly visited (traffic) segments of online shopping market were “Hypermarkets", “Apparel and footwear”, “Coupon services” and “Home appliances and electronics.” According to Yandex.wordstat statistics, in 2014 the major share of requests belongs to following segments: “Coupon services”, “Furniture”, “Books and multimedia”.

 

 

Online shopping market trends and tendencies

 

Among the major trends and tendencies of the Russian online shopping market J’son & Partners Consulting experts highlight the development of multichannel sales strategy: largest market participants are developing retail chains together with online channel. In 2014 starts a consolidation of several segment of the market: Sotmarket, Utinet and hypermarket E96 merged in September. There is a tendency of development of mobile apps, mobile advertising and mobile payments.

 

In 2014 the attractiveness of the marketplace business model is increasing: Yandex.Market and Sapato.ru switched to this model. Due to low enter barriers and high popularity of several segments among customers, hyper competition can be viewed in some segments: “Home appliances and electronic”, “Apparel and footwear”, “Food delivery”. In the product structure of “Books and multimedia” segment the share of e-books is increasing. Some segments, such as “Software” and “Medicine” are dependant to external factors: for the first segment it is a high proportion of illegal content, for the second one it is dependence from governmental industry regulations.

 

Market forecast for 2015

 

J’son & Partners Consulting estimates that in 2015 market volume will decrease by 5% in US$, while tendency of market players consolidation and separation of niche online shops will continue to grow. Due to the economic situation a slowing of the retail presence development is expected. Share of cross-border trade will jeopardize due to the weakening of the ruble position on the global market. Further development of mobile apps by online shopping market players is forecasted. By different estimations, stagnation and decrease in number of coupon services companies and further growth of non-tangible goods in the product structure of “Books and multimedia” segment are also expected.

 

Conclusions

  • Results of 2014: Russian online shopping market volume exceeded 683 bln RUB. There are 40 thousand of online shops.
  • Largest segments are “Hypermarkets” and “Home appliances and electronics”.
  • In the multichannel strategy prevails Internet channel. Due to the economic situation slowdown of retail business is expected.
  • The most visited segment is “Hypermarkets”; “Coupon services” had the largest number of request in Yandex.Wordstat.
  • Forecast: consolidation of players in key segments and further development of retail channel by the major players.
  • Expectations in 2015: decreasing volumes of cross-border online shopping and 5% market volume fall.

 

 

Detailed results of the research are presented in the full version of the report: Atlas of online shopping of Russian Federation, 2014

 

1. Methodology

2. Online shopping market volume, structure and dynamics

3. The analysis of online shopping segments

4. Home Appliances and Electronics Segment

4.1. Current state, qualitative and quantitativeestimation

4.2. Trends and tendencies

4.3. Profiles of the largest online shops of the segment

5. Segment “Hypermarkets”

5.1. Current state, qualitative and quantitativeestimation

5.2. Trends and tendencies

5.3. Profiles of the largest online shops of the segment

6. Segment “Apparel and footwear”

6.1. Current state, qualitative and quantitativeestimation

6.2. Trends and tendencies

6.3. Profiles of the largest online shops of the segment

7. Segment “Baby products”

7.1. Current state, qualitative and quantitativeestimation

7.2. Trends and tendencies

7.3. Profiles of the largest online shops of the segment

8. Segment “Automotive parts”

8.1. Current state, qualitative and quantitativeestimation

8.2. Trends and tendencies

8.3. Profiles of the largest online shops of the segment

9. Segment “DIY”

9.1. Current state, qualitative and quantitativeestimation

9.2. Trends and tendencies

9.3. Profiles of the largest online shops of the segment

10. Segment “Household products”

10.1. Current state, qualitative and quantitativeestimation

10.2. Trends and tendencies

10.3. Profiles of the largest online shops of the segment

11. Segment “Furniture”

11.1. Current state, qualitative and quantitativeestimation

11.2. Trends and tendencies

11.3. Profiles of the largest online shops of the segment

12. Segment “Food delivery”

12.1. Current state, qualitative and quantitativeestimation

12.2. Trends and tendencies

12.3. Profiles of the largest online shops of the segment

13. Segment “Sports and recreation”

13.1. Current state, qualitative and quantitativeestimation

13.2. Trends and tendencies

13.3. Profiles of the largest online shops of the segment

14. Segment “Cosmetic and perfume”

14.1. Current state, qualitative and quantitativeestimation

14.2. Trends and tendencies

14.3. Profiles of the largest online shops of the segment

15. Segment “Books and multimedia”

15.1. Current state, qualitative and quantitativeestimation

15.2. Trends and tendencies

15.3. Profiles of the largest online shops of the segment

16. Segment “Coupon services”

16.1. Current state, qualitative and quantitativeestimation

16.2. Trends and tendencies

16.3. Profiles of the largest online shops of the segment

17. Segment “Jewelry and watches”

17.1. Current state, qualitative and quantitativeestimation

17.2. Trends and tendencies

17.3. Profiles of the largest online shops of the segment

18. Segment “Software”

18.1. Current state, qualitative and quantitativeestimation

18.2. Trends and tendencies

18.3. Profiles of the largest online shops of the segment

19. Segment “Photographic technique”

19.1. Current state, qualitative and quantitativeestimation

19.2. Trends and tendencies

19.3. Profiles of the largest online shops of the segment

20. Segment “Pets supplies”

20.1. Current state, qualitative and quantitativeestimation

20.2. Trends and tendencies

20.3. Profiles of the largest online shops of the segment

21. Segment “Medicine”

21.1. Current state, qualitative and quantitativeestimation

21.2. Trends and tendencies

21.3. Profiles of the largest online shops of the segment

22. Segment “Mini holdings”

22.1. Current state, qualitative and quantitativeestimation

22.2. Trends and tendencies

22.3. Profiles of the largest online shops of the segment

23. Segment “Other Segments”

23.1. Current state, qualitative and quantitativeestimation

23.2. Trends and tendencies

23.3. Profiles of the largest online shops of the segment

24. Analysis of the largest delivery operators and services

25. Analysis of the largest fulfillment operators in Russia

26. Data bank covering 172 largest online shops, including:   

26.1. Company name

26.2. Segment of online shopping market

26.3. Legal name

26.4. Revenue 2011-2013

26.5. Revenue from online sales 2011-2013 

26.6. Online sales profit 2011-2013

26.7. Net profit 2011-2013

26.8. Commercial expenses 2011-2013

26.9. Share of commercial expenses from online sales 2011-2013

26.10. Number of employees

26.11. Revenue per 1 employee in 2013

26.12. Share of online sales, 2011-2013

26.13. Profitability of online sales by profit, 2011-2013

26.14. Profitability of online sales by net profit, 2011-2013

26.15. CAGR of online sales 2011-2013

26.16. Number of headings

26.17. Number of pick-up points

26.18. Founder/general director of the company

27. Trends and Tendencies

28. List of companies mentioned in the Report

      172 online shops;

      20 operators 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.