Russians do not rush to shops on Black Friday
An increase in online sales hasn’t offset in-store slump this year
While Russian e-commerce sites reported double sales growth on Black Friday, overall retail spending was by 40% lower last Friday compared to the corresponding day of 2019. Russian consumers seem to have revised their consumer habits after facing a drop in real incomes this year.
Spending on Black Friday was down by almost 40% in Russia, reports The Moscow Times citing payment data from Sberbank. Although Russia has not rolled out a second lockdown or partial quarantine like in other European countries, Russians stayed away from stores and malls amid record numbers of new coronavirus infections and deaths reported by the government in recent days.
The Kremlin has chosen a policy of keeping the country’s stores, restaurants, bars and workplaces largely open in a bid to limit the economic damage of the second wave. Nonetheless, it seems that consumers decided to protect themselves from infection risks and limit their expenses after a hit to living standards despite heavy promotion and discounting by Russian retailers. According to Sberbank, overall spending on Black Friday has been down 39,2% this year compared with 2019. In fact, spending scored the second-lowest reading on Sberbank’s consumer activity index for any Friday since 5 June.
Overall, Russia’s retail sales are lagging behind pre-coronavirus levels yet. At the same time, the latest data for October exceeded economists’ expectations, although spending was still down 2,4% compared to the corresponding month of 2019.
Online spending on Black Friday was by 61% higher compared to a usual weekend, but this was not enough to make up for the sluggish in-store activity. Wildberries and Ozon, which are Russia’s two largest online retailers, reported a nearly twofold increase in their sales on Black Friday compared with last year. According to Wildberries, 1,3 million customers made a purchase on Black Friday, up from 700,000 in 2019.
Given the rapid acceleration of Russia’s online retail this year, those numbers may be normal for a regular trading day. Research by Renaissance Capital previously showed that both Wildberries and Ozon more than doubled their revenue during the first six months of the year compared with 2019 levels.