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Internet Trading in Russian Federation: Market Segments Forecast for 2015–2018
April 2015
Analytical Report (full version)
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Analytical Report (full version)


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Internet Trading in Russian Federation: Market Segments Forecast for 2015–2018
April 2015
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J’son & Partners Consulting presents brief results of the research: Internet Trading in Russian Federation: Market Segments Forecast for 2015–2018.
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
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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.
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The largest segments are Home appliances and electronics, Hypermarkets.
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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.
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The most popular segment is Hypermarket, the highest number of search inquiries in Yandex – Coupon services.
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Forecast: consolidation of players in the main segments and further transition online by largest eShops, goods items will prevail in regions.
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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 2015–2018.
J’son & Partners Consulting presents brief results of the research: Internet Trading in Russian Federation: Market Segments Forecast for 2015–2018.