eCommerce & Technology


With over 70 million people using the internet monthly, Russia has the largest online audience in Europe.  Despite the difficult economic situation, the long-term prospects for growth look good.  According to the new edition of East West Digital News Agency’s (EWDN) Russian eCommerce Report, which cites data from the Russian agency Data Insight, online sales in 2016 exceeded $26 billion, growing more than 20% year-on-year.  Included in this figure are $16 billion for physical goods and $10 billion for online travel.  Up to 2015, the online market grew 25% annually.  Data Insight also reports that in 2015, Russia’s domestic online retail grew in rubles, reaching 650 billion (+16%), with an average order value amounting to some 4,050 rubles (up from 3,750 rubles in 2014).  However the picture looks different if viewed in U.S. dollar terms given the ruble’s sharp depreciation:  the market size fell to $10.5 billion, down 28% from 2014, which tracks more accurately with the recent economic recession.


The Civil Code

In the Russian Federation, the Civil Code is the primary source of civil law. Importantly for a prospective e-Trader into Russia, this law governs – amongst other things - civil relations between Russian citizens, the purchase and selling process, intellectual property rights and the rules relating to identifying which jurisdiction’s legislation is applicable in a particular international transaction. In contrast to Russian consumers, domestic Russian legal entities encounter very onerous procedures and processes when it comes to purchasing products from foreign online shops, as legislation regulating the international economic activities of Russian legal entities imposes very strict documentary rules for such purchases, both for the transaction itself and for the associated customs clearance procedures.

Because of these rules, where avoidable few internationally-based companies sell to Russian legal entities; it is much easier for a Russian legal entity to make online purchases from other Russian- based internet shops, or otherwise make international purchases as individuals where processes are simpler. Where a foreign online retailer does choose to sell to a Russian legal entity, this legal entity can only refuse a product and demand a refund where there is a significant problem with the quality of the product purchased; i.e. where it is not fit for purpose and/or the cost of repairing the product is higher than its original price. Individuals are thus afforded much greater protection than legal entities when it comes to product quality.

Whether a Russian individual or organization is buying from a foreign internet shop or a Russian one depends upon the status of the owner of the venture – i.e. whether it is a Russian or international legal entity. In accordance with Russian legislation, it is the responsibility of the seller to inform a buyer of the pertinent details of a transaction, i.e. who is offering the goods for sale and the conditions of sale, and penalties are imposed for the breach of this duty. Where an international e-Retailer wishes to operate via its own warehouse within Russian borders, it first must establish a Russian legal entity, though it is possible to contract separately with a third-party Russian commercial warehouse. In such cases, goods must move from an international legal entity to a Russian counterpart; foreign legal entities are unable to declare goods in Russia for the purpose of customs clearance procedures. A Russian legal entity, whatever the form, will then be able to sell goods to consumers. As stated previously, a foreign legal entity’s affiliate/branch office can clear goods from abroad, but only if they are for the office’s internal use.

Domestic and Preferred Card Schemes

The most commonly used electronic money service in Russia was reported to be Yandex.Money, with 22% of survey participants reporting the use of this digital wallet in the allotted timeframe. This was followed closely by Qiwi with 21% participant use. The study examined studied brand awareness amongst respondents of these same e-Wallet providers, and Yandex.Money again came out on top.

Credit card penetration in Russia is fairly low, and consumers prefer to use e-wallets such as Yandex or WebMoney which can also be topped up at cash terminals such as Qiwi. A popular payment method is the Virtual Visa card from Qiwi. The service allows customers to deposit cash at any of Qiwi’s terminals all around Russia and receive an SMS with Visa card details that can be used online to make a deposit.

Mobile Appetite

In Russia, mobile penetration closely echoes the average of the global percentages (50% smartphone ownership, 17% tablet ownership within Russia versus the 51% and 21% global average). Shopping with these devices is less popular however, as only 13% purchase with smartphones and 7% with tablets. Positively though, 57% of Russians intend to use smartphone and tablet technology to purchase goods in the next year. 

Recently, Google has been picking up pace, according to TNS. Google has become the most popular internet service in Russia (taking into account all devices). Google websites and applications are used by 20.5 million Russians per month. Yandex performs slightly less – 20.4 million, – 19.3 million. However, Yandex is the daily audience leader with 12.3 million uses, while Google is 3rd place with 11 million. 

Internet users in Russia lead Europe in time spent online, with users spending an average of 4.8 hours on the internet every day. When an individual in Russia owns a desktop/laptop/notebook computer and two or more mobile devices, 50% of their time online is spent on a mobile device as depicted below. E-Retailers looking to target Russian consumers should take this into account when developing their digital strategies.

Alternative Payments Methods

Despite the high penetration rate of debit cards in the Russian Federation, as a whole bank cards are not used overwhelmingly either online or of ine for making purchases. Instead, a significant proportion of card holders essentially use them to withdraw cash from their bank accounts after receiving their salary; this activity accounted for an astonishing 92% of bank card transactions in 2013. TNS’ 2014 study (see above) recorded that 56% of respondents surveyed had used bank cards as an electronic payment method in the six months preceding the survey – not a particularly impressive statistic in itself when compared with other European markets – but this figure does not paint an entirely accurate picture as it is common knowledge that bank cards are more frequently used for transactional purposes in larger Russian cities (the homes of TNS’ survey respondents). The proportion of Russian consumers using bank cards to make purchases online in the country at large, then, is much lower than this figure, and when considering the purchase of physical goods it is lower still. We have also seen that Russia’s credit card market remains largely underpenetrated.

Domestic eCommerce (B2C)

According to Yandex Report of eCommerce in Russia, payment aggregator Robokassa and analytics company Openstat identified 1.17 million “commercial sites” in the .ru, .su and .рф domains out of more than 3 million sites on the Russian Internet in 2014. Of these “commercial sites,” just a small part can actually be considered ecommerce sites as far as physical goods are concerned.  In 2014, InSales estimated the number of ecommerce sites (with a shopping cart function) at 43,000.  Of these sites, a mere 50 generated more than 4 billion rubles (approximately $100 million) in sales revenues per year, and 950 reached or exceeded 200 million rubles ($5.2 million).

Digital Invoicing and SMS Payments

SMS payments – where products or services can be purchased directly via a text message sent from a mobile phone- are another popular method of conducting online transactions within the Russian Federation, and many large Russian mobile operators such as Beeline, Megafon, MTS and Tele2 offer their subscribers the option to make online payments via this method. SMS payments work much like standard SMS: to make a purchase of a product or service, the buyer will sent a text message to his mobile payment provider. This provider will then clear the transaction between the buyer and seller, and the cost of the purchase will be added to a monthly phone bill or deducted from a pre-paid balance. By using SMS payments, mobile phone users can securely, quickly and safely pay merchants for the provision of goods or services, whether they be physical or virtual.

It is again important to note, however, that SMS payments are still used relatively infrequently for the purchase of physical goods; trust in electronic payments is low when compared with other areas of the world, and in no area is this wariness more pronounced than in mobile. Despite this hesitancy, though, such purchases are growing. Experts in the industry have reported certainty that these payments will become an ecommerce standard, and they will be an important factor contributing to the increase in the volume of purchases made through mobile terminals.

Cash Payment Terminals & Mobile Point-of-Sale

Cash payment terminals are and will remain incredibly popular in the Russian Federation, especially when it comes to payment for services and virtual goods. However, again this payment method is underutilised directly for the purchase of physical goods. In 2013 alone, non-banking payment terminals handled RUB 850 billion (USD 18.6 billion) in payments. Importantly, however, the use of these payment options in Russia is declining to make way for more convenient options, and the number of installed terminals has actually fallen. These terminals are touchscreen ATM-like self-service devices installed throughout Russia, and are easily accessible in public places. They provide users witha simple and safe way to deposit money into their e-Wallets (Yandex Money, Qiwi, etc.), pay mobile phone or utility bills and pay for purchases. The largest non-banking payment terminal providers in Russia are QIWI, CyberPlat and ElecsNet. Interestingly, even PayPal - an international online payments company that launched in Russia in 2013 - now gives Russian customers the opportunity to pay by cash as well as card.

A mobile point of sale (mPOS) is a compact device that receives payments made by bank card at any place or time, and is a mechanism that can be used by a courier to receive cash on delivery – an important consideration for any e-Retailer into Russia. To receive a payment, the courier presents a smartphone, tablet or dedicated wireless device programmed with a special payments mechanism to the customer, who will insert a bank card into the device to facilitate payment. The programmes and mechanisms necessary to receive payments via mobile terminals can be supplied by companies such as 2can, Lifepay and Yandex Payment Solutions.

Cross-Border eCommerce

The cross-border segment is the fastest growing, up 26% by value and 80% by number of parcels and small packages, and exceeded $4 billion for physical goods alone, according to Russian Post and industry association NAMO.

The growth of this segment has been driven in large part by Chinese companies – most notably Alibaba’s B2C marketplace – but key western players including Amazon, Asos, Next and Yoox are also in the game.

According to eMarketer, in 2015, 39% of Russia’s online shoppers made a cross-border digital purchase at least once that year.  Clothing, accessories, and footwear are the most common products Russian shopper by abroad, making up over 51% of Russian cross-border digital purchases.  The second most purchased category of goods are cosmetics, beauty and health products.  The leading categories come as no surprise, as many Russians hold a high value on appearance and name brands.  Some other popular categories Russians look to shop abroad for include toys, electronics, and household goods.

Customer Experience

Unquestionably, when expanding into Russia an e-Retailer should examine and provide for the payment method most commonly used by consumers for the purchase of goods in the location. Ultimately, the payments market in Russia is still developing and great change in the area is inevitable. Providing popular options will allow you to meet the payment expectations of any Russian consumer. The more payment methods you allow for, the more success you will have in this location. Indeed, according to Yandex.Money, the use of popular online payment methods helps e-Shops to increase successful orders by 10-15%.

The use of electronic payments systems will continue to increase in Russia, particularly with government encouragement favouring the development of ecommerce in the country. Online payments systems are integrated by State institutions, such as the Tax Service - , public transport providers and law enforcement (enable users to pay taxes, travel cards and nes), with increased frequency, and these projects help to increase the number of Russians who are aware of online payment methods and enhancing their overall con dence in these systems. New payment methods (such as recurring, one-click and mobile acquiring) - now just emerging – will likely develop and improve exponentially as a result of increased demand and knowledge.

B2B eCommerce

According to Moscow Times research, in 2015, 68 % of Russian corporations used electronic trading platforms for procurement purposes.  According to data from B2B-Center, online corporate and government purchases ballooned by 40% in the first nine months of 2014 compared with the same period of time in 2013.

The majority of this business sprouted from construction goods and services, with more than one-fifth of all purchases made in 2014 falling into this category.  Trailing close behind was the procurement of machinery and specialized products for the mining and oil-field industries, making up 18.6% of all online B2B purchases seen on

As B2B online shopping increases in Russia, the industry has become tightly regulated. Transactions made through B2B ecommerce platforms are legally binding due to the large financial value of these purchases.  Procurement procedures, especially for state-run entities, face strict legal requirements.

Payment Regulation

Research should be done well in advance of launching a digital shop - the facilitation of payment is an area which can make or break success in a region and as an online merchant, one cannot just enter the Russian market with a ‘basic’ web counter and a Russian bank. It is important to offer a tailor-made solution. Should it be required, varying degrees of third-party assistance, for example through the services of a specialised payments service provider, are available.

Local Entities

The foundations of the Russian banking system are provided by the territory’s federal laws, and the banking sector is subject to stringent regulation, though this has been relaxed somewhat in recent years. Financial institutions in Russia have to meet mandatory legislation requirements, as well as comply with numerous CBR instructions and regulations.

Butt the Russian banking sector is dominated by State-owned financial giants such as: • Sberbank; • Vnesheconombank (VEB); and • VTB Bank; • Rosselkhozbank • Gazprombank

Russian non-residents have the ability to open and operate ruble and foreign currency bank accounts in the Russian Federation, so long as this is done with an authorised bank. Payments in foreign currencies are generally permitted without restriction between non-residents, though payments in rubles between such parties are only permitted through accounts opened in Russian banks. Transactions between residents and non-residents involving payments in rubles and foreign currency can currently be conducted without limitation, though there are procedural requirements for such operations. Foreign currency can be imported freely into the Russian Federation by residents and non-residents alike. In the case of individuals, both categories must le a written customs declaration when importing currency in cash, travellers’ checks or securities if the value is more than USD 10,000.

The situation when it comes to exporting foreign currency in this location is a bit more restrictive. Both resident and non-resident individuals can export foreign currency up to a value of USD 3,000 without a customs declaration, and up to USD 10,000 with a declaration. Exports of currency over this amount are additionally permitted, though further procedural and documentary requirements must be adhered to. It should be noted that the CBR closely monitors currency transactions involving the import and export of goods between residents and non-residents using transaction passports. Thus, certain documents relating to such transactions must be filed with the bank. This is quite a complex area and is subject to frequent change, particularly in light of the 2014/2015 economic crisis which has made stricter currency controls a definitive possibility. It is thus recommended that professional advice is sought in this area.

Mobile Payments

Overall, mobile device traffic only constitutes around 7% of all traffic to Russian websites, and so far only 21% of surveyed smartphone users living in Russian cities with a population of 100,000+ have made purchases via their phones, although the proportion increases in Russia’s largest cities, Moscow and St Petersburg, to 23.6% and 23.9% of smartphone users respectively. Interestingly, at present Russian consumers spend a comparatively small proportion of their mobile browsing time shopping online. TNS in their 2013 research discovered that most people in Russia use their smartphones for social networking, messaging and search, whereas only around 10-15% of surveyed respondents used their smartphones for buying or ordering products online.

It is important to note, however, that almost 40% of Russian respondents surveyed by TNS stated that they researched information about products using a smartphone before buying the products offline or via another device, and so –even without the promise of dramatic future m-Commerce growth – this is a channel that shouldn’t be ignored by a prospective e-Retailer into Russia. A report entitled ‘The Russian m-Commerce Market in 2014’, presented by the marketing agency, has additionally indicated that those Russian consumers who have purchased tablet devices are much more likely to complete the online order process using those devices than those shopping on smartphones. The report stated that around 48% of tablet users made purchases of goods and services via these devices in 2014. Sales of tablet devices are increasing dramatically in Russia, so m-Commerce sales in the territory will certainly increase as a result. Of course, as is the trend across the globe, a main driver of m-Commerce in Russia will be an increase in smartphone and tablet penetration amongst Russian citizens, and we can only expect order numbers to increase as a result.

Online Payment

Cash-on-delivery (COD) is the existing trend for physical goods and will remain so for some time, although the use of electronic payments is slowly increasing.  Despite being used by a minority, many forms of electronic payments are on the rise.  EWDN’s report states that according to the opinion of industry experts and ecommerce executives, the use of electronic payments will continue to rise.  There are differing opinions on the specifics of using bank cards online.  

Various forms of electronic payment are on the rise, even though they are used only by a minority of consumers.  In addition to bank cards, the use of which is growing slowly, several new solutions and offers appear each year, and some of them are intended to create a universal means of payment.  Large segments of the electronic payment market are led by domestic players, from payment terminal operators to mobile carriers to electronic currency companies.

Mobile e-Commerce

The number of mobile shoppers has exceeded 8.5 million. These numbers are expected to increase dramatically as mobile internet and smartphone devices grow in popularity across Russia.

Digital Marketing

The amount and frequency of searches for your product or service should be analyzed prior to launching a campaign in Russia.  As well as using Google Trends, there is the useful Yandex service to help you select the right words to use on your website to attract consumers:

Major Buying holidays

Foreign retailers must prepare their advertisement campaigns, promotions, and products for Russian New Year, Men’s Day, and International Women’s Day.  These three holidays drive a significant portion of Russian online shopping and vary from Western holidays.

Over the past few years, Russia started participating in Black Friday weekend sales to kick off the winter holiday shopping season. For the most part, shoppers make their purchases throughout December for the ever-popular Russian gift-giving day on January 1. The majority of shoppers don’t start shopping in November and many last-minute shoppers are still making purchases in late December when Westerners have already returned their gifts. A third of Russian holiday shoppers turn to the Internet for gift ideas and to make these purchases – 14% of shoppers search online, but then purchase in stores. 

Russia recognizes men on February 23, which is Men’s Day or otherwise known as “Day of Fatherland Defenders”, and celebrates International Women’s Day on March 8. During the weeks leading up to these holidays, Russians search for a number of gifts in the cosmetic and electronics categories to recognize their friends and family members.  Combined, these three holidays make the winter a very important shopping period unique to Russia.

Beyond these holidays, Russians also search online for Valentine’s Day gifts, wedding gifts, and birthdays.

Social media

More than 90% of Russian Internet users access social networks. The most popular social network in Russia is VKontakte, which has over 380 million registered users, 65% of them live in Russia.  VKontakte has 80 million visitors per day, 60% aged 25 or older.

Most Popular Social Network:

VK (42.3M users)

Most Popular Payment Method:

Digital Wallets

Largest eCommerce Website: