(Yicai Global) May 26 -- The rapid growth of Russia’s online shopping sector offers plenty of room for Chinese firms to expand their footprint in the Russian market, the head of Russian e-retailer Ozon’s China office said.
Russia's e-commerce industry has huge potential, Simon Huang said at the 2023 Canton Tower Science & Technology Conference yesterday. Around 10 percent of shopping is done online in Russia, compared with around 30 percent in China, so Russia’s e-commerce market could still double in size, Huang said.
The country's e-commerce gross merchandize volume surged 30 percent last year from 2021 and is expected to soar between 25 percent to 30 percent this year, said Zhong Yi, head of the business department at Lianlian Global, Ozon’s online payment service provider.
Aided by favorable policies, there will be a period of fast growth in China-Russia e-commerce from 2023 to 2030, Huang said.
As European and US companies exit Russia due to the ongoing Russia-Ukraine conflict, this creates a gap that can be filled by new brands, such as Chinese laptop maker Maibenben, robotic vacuum cleaner manufacturer Neatsvor and auto giant Geely.
"Russia is a relatively independent market, and this will bring opportunities to new brands such as Maibenben," said Wang Hong, general manager of a cross-border trader based in southern Guangdong province.
More Chinese firms will enter the Russian market through online channels and then set up brick-and-mortar stores, Huang said.
Companies to be watched are WildBerries, Ozon’s main rival in Russia, and Temu, the overseas arm of e-retailer Pinduoduo, which is preparing to enter the Russian market, Wang said.
The two countries are well connected by land and sea routes. Chinese firms are able to store their goods in low-cost warehouses in the northeast of the country before they enter Russia, Huang said. And Moscow-based Ozon has teamed up with China Postal Express & Logistics to build a logistics network between China and Russia.
Russia’s use of the Chinese yuan in cross-border settlements jumped ten-fold last year and the redback now accounts for one quarter of its foreign currency payments. Some 23 percent of Russia’s imports are now paid in yuan and it is also promoting the use of the yuan with other countries.
Editors: Zhang Yushuo, Kim Taylor