E-commerce in Russia, what you must bear in mind

Even though the Russian Internet developed remarkably in the 2000s, e-commerce remains very limited in Russia, and businesses are hesitant about leaping into the unknown. Here are some points to bear in mind for a foreign company looking to open an online store on the Russian Internet:

The traditional wariness of Russian consumers. Well-used to being taken in by their compatriots in all manner of ways, Russians will never buy a product without first studying it carefully, especially if it has been made in Russia. They are more open-minded about products made abroad.

2. Web design and localizing sites. Clearly, a foreign company’s website must at least be translated into Russian, or better still have its own Russian site (with a.ru domainrather than .рф). It should be carefully designed and look expensive to avoid the wary reaction referred to above.
3. Payment method. This is probably the most delicate point.It is very important to realize that today in 2011 only 40% of Russians have a credit card. And that does not mean that this 40% use their card for on-line or credit payments; indeed it is far from the case. According to the available statistics, only 5% of the people who have a credit card (2% of the whole population) state that they have bought something online using a credit card. The reasons for this reluctance are largely connected with the Russians’ lack of confidence in their institutions, in particular banks. Major stings involving financial institutions (varying in the amounts involved, such as the MMM scandal in the 1990s) are still very much present in people’s minds. This explains why Paypal is still not available in Russia (neither is transferring money to a Russian bank).
In concrete terms, there are two alternatives:

1. Internet payment through the Russian systems namely
WebMoney and Yandex.Dengi (a by-product of the search engine of the same name). Indeed, these two systems share 90% of the Internet payment market in Russia (2009 figure). You can put money into WebMoney and Yandex.Dengi accounts by using an electronic terminal (these can be found everywhere and many do not take commission), or by transfer from a Russian bank account.

The goods are delivered by courier, and payment is made in cash-on- delivery. This system has the obvious disadvantage that the customer might refuse to pay the courier, or refuse to take the goods, and in this case the courier rushes back to the vendor.

It is worth noting that the most popular products on Russian e-commerce websites are mobiles, computers and components, books, electrical goods, cosmetics, clothes, flowers and other small gifts.

Please contact us for further details on how to start up your e-commercewebsite in Russia.

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