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Russian E-commerce in the middle of 2015

Data Insight

EDAYS June 05

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Market volume

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E-commerce audience

Number of online shoppers* 25 mln

(1/3 of Internet audience)

* Online shoppers – those who made in last 12 months at least 1 purchase of physical goods in Russian or foreign online store

26%

7%

43%

24%

Russian population, 18-64 ∑ 97 mln

online shoppers

has experience of online shopping in the past has no experience of online shopping don't use Internet

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Number of online orders

25,4 mln of online shoppers

х

7,7 online orders a year per shopper (in average)

=

195 mln of online orders

made by Russians in 2014

(148 mln – domestic, 47 млн. – crossborder)

NB! One order may include multiple orders

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AOV and market volume

195 mln orders

х

average order value

3300 rubles (~$85 by 2014 rate)

=

645 bln rubles of online sales*

* Estimate doesn’t include (a) food delivery, (b) airplane and train tickets, (c) digital

goods, (d) C2C, MLM and group shopping, (e) purchases for corporate consumption or

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Market dynamics

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Market tripled in 4 years

Online B2C sales of physical goods by Russian online stores

180

235

315

415

560

0

100

200

300

400

500

600

2010 2011 2012 2013 2014

Domestic online sales, bn rubles

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Growth rates year by year

0%

10%

20%

30%

40%

0

100

200

300

400

500

600

2010 2011 2012 2013 2014

Market size, bn rub Nominal growth

Inflation growth Real growth

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2014 results: number interpretation

Nominal growth: +35% (best result since 2010)

Thought ~1/2 of this growth came from inflation-defined

increase of ruble AOV (dollar AOV declined)

Number of orders grew only 18% (worse result since

measurement began)

Without consumer panic in the end of 2014 the growth

would be only +9% by orders and +17% by rubles

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2015: first 5 months

January and February – still high sales, as prices for goods

imported before ruble depreciation were still attractive

Every next month growth rates become lower – with May

2015 2% below May 2014 by number of orders

Beneficiaries of 2014 December rush – retailers of

electronics – shows dynamics below other segments

Meanwhile, all ecommerce segments feel better

than offline retail

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Disappearing growth

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2014 - Q1 2014 - Q2 2014 - Q3 2014 - Q4 2015 - Q1 2015 - Q2

Online sales growth y-o-y (N of orders, domestic segment only)

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Insights about online shoppers

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Large research project We conducted complex research of online shopping and

shoppers in Russia – to build ‘data matrix’ on different

aspects of the market

Joint project by:

research agency Data Insight

CMS-platform InSales

Payment service provider PayU

The research is based on the program of

customers surveys

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Methodology of the research

928 Internet users

(18-64 yo) Share of online shoppers

Profile of online shoppers

Frequency of online purchases

E-commerce experience in years

3472 онлайн-

покупателя (18-64) Details on last and previous

purchases

Choice criteria

Expectations

etc.

offline survey

online survey

Representative data on consumer behavior.

More than 400 variables. Sample error ±1.7%

October – November

of 2014

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How consumers choose

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Why bought online, and not offline

48%

33%

31%

25%

25%

21%

16%

11%

9%

9%

6%

3%

online price was lower than in regular stores

it's easier and more convenient to choose and compare goods online

it's convenient to look online for place with best price

more convenient to order online than to go to regular store

convenient to buy right with delivery to home

there is no such goods in regular stores of my city/town

there are more information online about goods

no time/opportunity to go to regular stores

don’t know where it's possible to buy this product offline

don’t like to visit shops

used to oder almost everything online

other

Key: price, convenience, convenience …

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Purchase models

30%

10% 58%

other 2% hadn't knew in advance what will buy,

and choose the product while visiting online stores

bought some other items in addition to product, that had decided to buy in advance

had knew in advance what will buy

40% of online orders are fully or partially spontaneous

or at least not “predetermined”

Which statement is the most accurate for your recent online purchase?

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Choice of place to buy

44%

4% 25%

27%

knew in advance where will buy

hadn’t plan the purchase - retailer recommend/offer the product

knew in advance few retailers to choose between

hadn't knew where to buy - looked for place with best conditions

The place of purchase is “predetermined” for half of

orders

area of competition

loyal purchase

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Scenario A: loyal purchases

49%

25%

12%

10%

7%

7%

2%

3%

2%

When you made your most recent online purchase, why you came to this specific online store?

made purchases in this online store before

recommended by relatives or friends

well-known retailer name

read online about special offer from the retailer

clicked on the ad

responded to the offer received via e-mail or SMS

responded to offline ads

other

don’t remember, hard to say

% of those, who answered that knew in advance where to buy or that the retailer offered itself the purchase

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Scenario B: choice between retailers

47%

15%

14%

13%

13%

9%

6%

5%

5%

5%

2%

How you choose the online store, where you made your most recent purchase?

via online search

compared prices and conditions in few online stores (they knew before)

by recommendation of relatives or friends

choose the place where made purchase before

via Yandex.Market

on base of reviews available online

choose the shop that is well known

via other (beside Yandex.Market) comparison sites

on base of online ad or email promotion

on base of ads in search results

on base of offline ads

% of those, who answered that choose between few or many online stores

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What is good online store?

39%

37%

32%

28%

26%

quality products descriptions

availability of product reviews

availability of detailed and clear info on delivery conditions

availability of different payment options

convenient structure of products catalogue

Among listed, what is the most important for online store? What is necessary to form your opinion that this is convenient

website and good online store? (top 5 answers)

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Delivery and payments

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28%

41%

20%

2% 6%

1%

36%

26% 24%

2% 7%

1%

cou

rier

del

iver

y

Ru

ssia

n P

ost

colle

ctio

n p

oin

t o

f o

nlin

e st

ore

colle

ctio

n p

oin

t o

f lo

gist

ic c

om

pan

y

in-s

tore

pic

kup

po

st t

erm

inal

s

all orders

domestic orders

Delivery methods

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52%

6%

25%

10%

8%

How the recent purchase was paid

cash on delivery

card on delivery

online payment by card

online payment via e-money system

other / hard to say

Payment methods

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52%

6%

25%

10% 7%

66%

8%

14%

6% 6%

cash

on

del

iver

y

card

on

del

iver

y

on

line

pay

men

t b

y ca

rd

on

line

pay

men

ts v

ia e

-m

on

ey s

yste

m

oth

er

all orders domestic orders

Payment methods

Estimate of online payments share highly

depends on inclusion/exclusion of

cross-border sales into statistics

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84%

5%

4%

4%

0,3% 2% 1%

only desktop / laptop only tablet only smartphone both smartphone and desktop/laptop both smartphone and tablet both tablet and desktop/laptop all three devices

mCommerce is coming

Mobile devices are

used (at least at some

stage) in every sixth

online order of

physical goods

*материальных товаров

Which devices did you use while choosing product and seller and making the

order itself?

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First agency in Russia, that is fully focused

on research and consultancy in digital economy

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