FOCUS: E-commerce 2021 growth to slow down on high base, potential still heavy - Consumer Goods & Retail - PRIME Business News Agency - All News Politics Economy Business Wire Financial Wire Oil Gas Chemical Industry Power Industry Metals Mining Pulp Paper Agro Commodities Transport Automobile Construction Real Estate Telecommunications Engineering Hi-Tech Consumer Goods Retail Calendar Our Features Interviews Opinions Press Releases

FOCUS: E-commerce 2021 growth to slow down on high base, potential still heavy

By Yekaterina Yezhova

MOSCOW, Nov 22 (PRIME) -- Russias 2021 e-commerce expansion will slow down to 10% from a 59% jump a year earlier, when the lockdowns became the driver for the burgeoning business, experts said, adding that the countrys market has one of the highest growth potential in the world.

In 2021, the e-commerce advance in the country was smooth, stable from month to month. The JanuarySeptember results of 2.41 trillion rubles are slightly above the same period of 2020 of 2.34 trillion rubles, Russian Online Retail Association (AKIT) President Artyom Sokolov told PRIME.

A year ago there were several months of lockdown in the period when e-commerce was the only channel of almost the whole non-grocery retail for a long time, and, as a consequence, we saw abnormally high demand for goods on the Internet. The figure of 2.41 trillion rubles proves clients interest to the online channel the patterns of the buyer behavior that emerged during the tough restrictions in brick-and-mortar retail imposed due to the COVID-19 pandemic stay in force after their relief.

Local online sales accounted for 86%, or 2.07 trillion rubles, in JanuarySeptember. In JanuaryMay, we saw stably falling volumes of cross-border trade, by 30% on average. There was a noticeable rise by 5070% in JulySeptember, but the cross-border market still failed to regain the position it lost with the breaking of the logistics chains due to the lockdowns, Sokolov said.

In 2019, orders placed with foreign online stores accounted for 31% of the total e-commerce volume, and the figure plunged to 14% in 2020 and stayed flat in JanuarySeptember, or 341 billion rubles.

According to our outlook, the e-commerce market would grow to 3.552 trillion rubles in 2021, Sokolov said. In 2020, the online trade market soared by 58.5% to 3.221 trillion rubles.

In JanuarySeptember, the share of online in total retail stood at 8.5%, but it will change by the end of 2021. It may beat the 2020 record of 9.6%. It can be explained not only by the new restrictive measures, which certainly boost e-commerce, but November and December are the traditionally high season in retail with sales and preparation for the New Year holidays, he told PRIME.

The countrys leading online retailers report robust figures. AliExpress Russias gross merchandise volume (GMV) increased by 36% on the year to 133.3 billion rubles in AprilSeptember, excluding services. By the end of September, the turnover of the companys local business accounted for more than a third of the total turnover.

A spokesperson for marketplace Ozon said the companys GMV leaped by 145% on the year to 108.3 billion rubles in JulySeptember, including services. The number of orders rocketed by 239% to 56.2 million.

The main trend of the contemporary market, both of e-commerce and retail in general, is customization of services, an intention to satisfy all the requests of clients, and by predicting these requests make personalized offers. This trend has certainly become stronger in 2021 and will persist in the future, Sokolov said.

The services that were active during the first onset of the pandemic now gain new momentum. For example, express delivery, which evolved initially in e-grocery, is currently popular in other segments of online trade, including beauty products, digital and household appliances.

The other trend that the AKIT head mentioned is an increase in activities of the regional buyers. Some time ago, Moscow, the Moscow Region, and St. Petersburg accounted for over half of the e-commerce volume and none of the remaining regions had even 1%.

Today we see a steady growth trend on the one hand, we see higher demand and, on the other hand, almost every region accelerates business, including subsidizing commissions of the marketplaces or assistance with goods description. Besides, electronic floors also get help, for example, they receive land to build warehouses, Sokolov told PRIME.

The capital city, which accounted usually for a quarter of all online orders, lost almost 5 percentage points in the total volume of sales to 20.1% in JanuarySeptember.

In comparison to Europe and Asia, Russias Internet retail is at a point these markets passed five years ago, but the country has such developed and popular services, like express delivery and extensive chains of pick-up points, which are almost absent or at an early stage abroad, Sokolov said.

Taking it and online volumes in other states into account 32% of total retail in the U.K., 27% in China, and 14% in the U.S., the Russian e-commerce market has one of the highest growth potentials, the AKIT chief said.

Among the barriers for the countrys e-commerce, the Ozon spokesperson mentioned the insufficiency of logistics infrastructure, which obstructs unlocking the potential of the regions, from the point of view of convenience for buyers and logistics of goods for businessmen, as well as legislative restrictions for online trade in some types of goods.

(72.7617 rubles U.S. $1)

End %%ee/jst%%

22.11.2021 09:29
Share |
To report an error select text and press Ctrl+Enter
Central Bank Official Rate
1W 1M 1Y
EUR 84.4820 -0.4706 30 nov
USD 74.9818 -0.6055 30 nov
Stock Market Indices
1D 1W 1M 1Y
micex 3879.54 +1.80 18:51 29 nov
Stock Quotes in RUR
1D 1W 1M 1Y
gazp 338.82 +3.93 19:12 29 nov
lkoh 6658.00 +4.46 19:12 29 nov
rosn 574.60 +3.50 19:12 29 nov
sber 316.90 +4.10 19:12 29 nov
MICEX Ruble Trading
1D 1W 1M 1Y
EURTD 84.6400 -0.4950 14:59 29 nov
USDTD 74.2500 -1.1800 17:44 29 nov