Online demand for presents triples in Tatarstan

How e-commerce feels in Tatarstan in the first quarter of 2021

Experts registered the first peak of demand for online purchases by 8 March on the last day of winter. New upsurges were expected through the holiday. As representatives of some retailers claim, the number of Tatarstan residents’ orders increased to 330% on the first three days of spring compared to last year’s Women’s Day. E-commerce was more active at the beginning of the year than in 2020 — to 49% across Russia. Moreover, Kazan citizens turn to an online retailer more often than residents of other citizens on average: 65% of respondents buy goods online 2-3 times a month. Read in Realnoe Vremya’s report more how the number of suppliers of commodities and their sales grow in online retailers as well as new e-commerce tendencies.

Share of online sales nears 10%

E-commerce kept growing in Russia at the beginning of the year. The e-commerce market in Russia rose by 58,5% in 2020, the Association of E-Commerce Companies (AECC). Russians spent 3,221 trillion rubles in Russian and foreign online stores. The share of e-commerce in the total volume of sales in the retail market totalled 9,6% in 2020.

However, 10,9% share in the first quarter of 2020 remains record high, the AECC noted. The peak of sales in 2020 was during the lockdown, in April, which is over 309,2bn rubles. But compared to the other months, December broke records again, of course. Russians placed orders for 297,5bn rubles (to compare, 142,4bn rubles in January 2002, more than 201,5bn rubles in July), the AECC said.

“Volumes significantly rose by the Singles’ Day, sales by Black Friday increased too. It is quite logical because personal incomes fell, and these discounts turned out to be very important for people. We don’t have December offers but have a tradition of making presents. And historically, the last two months of the year provide almost a quarter of the annual turnover to e-commerce,” President of the National Association of Remote Commerce (NARC) Alexander Ivanov briefly characterised last year’s situation.

Online shoppers “aged”

One in two Russian from 16 to 55 years buys something online at least twice a year. Moreover, 20% of online shoppers prefer e-commerce because they consider this as a safer way than traditional shopping. This research data is provided by Yandex.Market and GfK Rus. The audience of online buyers increased last year and “aged”. 47,2 million people went shopping online in Russia in 2019, in 2020, they totalled 60 million. President of the Association of E-Commerce Companies Artyom Sokolov told Realnoe Vremya about this.

“The pandemic attracted new groups of participants: those who didn’t use e-commerce learnt how to do it, this turned out to be easy and simple. I think people will resort to this more often with time,” thinks head of the NARC Alexander Ivanov.

“People above the age of 55 willingly joined e-commerce,” continues Artyom Sokolov. “But if during the first coronavirus wave this was caused, first of all, the impossibility of shopping habitually, now it seems a new consumer habit has been formed. Despite expectations, people began to turn to e-stores not only to buy food with delivery but also actively made purchases in Equipment, Cosmetics, Home Products and Clothes. This became especially obvious on Black Friday sales days (from 27 to 29 November 2020). Research done by the AECC showed that precisely the older generation holds a fifth of all orders (20%), while it used to be just a sporadic case. People from 44-54 years are also taking the lead in purchases, they considerably outstripped previous leaders aged 24-35 years (31,3% and 20,3% of orders respectively).

5% of Tatarstan residents go shopping online every day

As the AECC’s experts told our newspaper, last year, Tatarstan accounted for 2,1% of the country’s e-commerce (67,1bn rubles with 3,221 trillion rubles of turnover). The difference between the preferences of the republic’s residents and citizens of Russia was little. Tatarstan citizens placed orders for 4,8 billion rubles this January alone.

The top 5 consists of:

  • digital equipment and household appliances (1,16bn rubles),
  • furniture and home goods (536m rubles),
  • foods (443m rubles),
  • clothes and shoes (364m rubles),
  • beauty and health (299m rubles).
  • Goods for babies were also actively purchased online (161m rubles).

Kazan citizens shop online more than people in Russia on average: 65% of the respondents buy goods online 2-3 times a month or more, while 5% do this every day or almost every day, note analysts of Yandex.Market and GfK Rus. According to their data, last year, Tatarstan placed 155% orders more on Yandex.Market than in 2019, while the growth in monetary terms was 145%. Statistics of Wildberries read that the republic was 15th in the country in online sales (+13 positions year on year), the online retailer’s sales in the region rose by 137% a year on year, while the rise in sales per item amounted to 231%.

Moreover, last year, the average receipt of purchase among the republic’s residents was around 3,760 rubles, which is approximately 4% less than in 2019, Yandex.Market.Analytics reports.

“Everybody’s average receipt has been decreasing for many years due to friendly terms, because people buy more often, up to several times a month, and delivery more often becomes free for them. There is a tendency: orders are placed more often but in smaller quantities,” KazanExpress’s founder Linar Khusnullin explained to Realnoe Vremya.

January’s nearly 50% growth

Alexander Ivanov noted that e-commerce usually slows down its pace and all business activity falls in January. However, the growth of interest in e-commerce has lately updated January numbers of the previous years. The turnover of the Russian e-commerce market in January 2020 grew by 30% compared to January 2019. While in 2021, the January growth of sales year on year was 45%, Realnoe Vremya was told in the press service of Yandex.Market.

Despite the tradition, January this year didn’t become a month of a lull, the AECC confirms providing its analytics: sales surged by 49% (142,4bn rubles in January 2020 and 211,8bn rubles in January 2021). The next categories grew the most: goods for home and furniture (+246%), goods for babies (+140%), sport (+78%), beauty and health (+68%), digital equipment and household appliances (+37%).

“All e-commerce members noticed a growth in sales in January. We see several reasons: on the one hand, stores stimulated consumer activity by keeping discounts. On the other hand, we again see a general tendency for consumer demand that was outlined last year: Russians started to invest in their home with a greater desire, which simplifies everyday household chores because most of us still spend most of the time at home. The interest in goods for health was also seen last year and we will unlikely see a reduction soon,” thinks Artyom Sokolov.

Tatarstan’s online suppliers increased sales five times

In February, Russians’ online orders started to gain speed. With the coming of spring, users from Tatarstan started to actively buy presents by 8 March. Yandex.Market’s experts already registered a peak of demand on 28 February. And they think this growth will go on. From 1 to 3 March, residents of the republic placed 330% orders more in their marketplace than on the eve of 8 March last year.

Now Wildberries’s turnover in Tatarstan has grown by 132% since late last year (compared to the same period last year), while sales per item augmented by 206%.

“Before gender holidays, Tatarstan residents more often choose online stores for festive shopping because all the essentials — presents, goods for a holiday, sweets for a festive table and much more — can be purchased online with a courier’s delivery or placing an order in one of the pickup points,” the company’s press service said.

This year, entrepreneurs, including those from Tatarstan, keep actively developing online sales channels.

“The number of suppliers grows very fast, but we should understand that it grows from scratch because there weren’t almost any suppliers just recently, while their number has grown suddenly 1,5 times in the last year,” noted Alexander Ivanov.

So over 500 local stores work with Yandex.Market who signed an agreement on cooperation with the republic in 2019. In January-February, the number of Tatarstan sellers on Wildberries grew nearly five times compared to last year’s analogous period, to 1,300. The republic’s entrepreneurs’ sales also increased nearly five times during this period, moreover, Tatarstan rose from sixth to second place in the Volga Federal District in online turnover growth.

“Russia has hundreds of thousands of sellers and producers, most of them are present in the marketplace, but not everybody. Those who haven’t yet gone online are entering — there is a chance of joining the last wave. The number of suppliers has doubled since early last year on KazanExpress, from 2,200 to almost 5,000,” Linar Khusnullin told Realnoe Vremya.

Moreover, he noted that the Kazan online retailer has a low base effect, therefore the company doesn’t really show how the market grows. A year ago, KazanExpress operated in 10 cities, now it does in 33. And this year the company opened its offices in another 11 cities and add around 90 settlements later, so they will be in 127 cities in total.

Russians “hooked” on food delivery

New retailers don’t appear in e-commerce all of a sudden, this is why there haven’t been any surprises here in the last months.

“The marketplace requires huge resources — the business is too big, complex that cannot open quickly. Narrow-focused players can appear, but large players are the same. There are traditional online stores that became or are becoming marketplaces, for instance, Svyaznoy. Lamoda became a marketplace a long time ago. and Leroy Merlin, which began to use a marketplace model last year — are bright examples,” says the founder of KazanExpress.

Linar Khusnullin singled out Wildberries and Ozon as competitive players for his company. According to him, Yandex.Market is about to join them. The Kazan retailer itself plans to become the country’s third marketplace in the number of orders a day. Now they are equal to 25-30,000, while 150,000 orders are considered to be reached. It is a bit less than Ozon had in 2020, Linar Khusnullin stresses.

However, e-market players offer new options for work if they develop. “The pandemic pushed the market to develop new services that are popular from Russians, for instance, express delivery. We saw ‘logistics in logistics’ when competitors — delivery services — are present on each other’s websites, unexpected collaborations — stores with a lot of brands that have their own online channel — offer their services in other online shops,” the president of the AECC said recently.

This year, Yandex.Market began to work with sellers from Tatarstan in an FBS model — the sales in which a partner places goods in the market but stores them in his own warehouse and packs them if they are ordered. This model is convenient for those stores that always want to have access to their goods, including expensive commodities.

Moreover, Yandex.Market launched sales of fresh produce, which is delivered within one or two hours for buyers from Kazan. Metro Cash&Carry hypermarkets joined the marketplace first stage of the project.

“Foodstuffs turned out to be third on the list of popular goods for the first time. Restrictive measures taken due to coronavirus favour this too, of course. However, even after their cancellation Russian didn’t refuse this way of shopping, especially offers of express delivery that a lot of courier services are providing now,” Artyom Sokolov assures us.

“Narrow categories used to be represented, more new categories are appearing now: from a safety pin to a helicopter can be purchased online. For instance, the delivery of foodstuffs actively develops. Our company sells products, but not those that have a short shelf life. Look at how actively Samokat, Sbermarket, Yandex.Lavka developed over the year. They conquer the market quickly within a short period of time,” Linar Khusnullin thinks.

In Artyom Sokolov’s opinion, in 2021, the e-commerce market will unlikely have such explosive growth. However, the AECC president expects e-commerce to bring more surprising formats, services and collaborations.

By Yekaterina Ablayeva

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