E-commerce shows explosive growth in Russia
The pandemic pushed millions of consumers to shop online in 2020
The Russian e-commerce market, which is quite modest by world standards, showed impressive growth last year in terms of sales volume. Wildberries held the lead for the fourth consecutive year.
Russian e-commerce recorded one of the world’s highest growth rates in 2020, reports East-West Digital News citing a report by Data Insight research agency. According to the report, domestic sales of physical goods grew by 58% compared to 2019 and amounted to 2,7 trillion rubles (about $37 billion at the average annual exchange rate) in 2020. Pre-existing market expansion was accelerated by the COVID-19 pandemic, which pushed millions of consumers towards online shopping. As a result, several segments showed explosive growth, for example, e-grocery where sales volume reached 13 billion rubles ($180 million), up 250% from 2019. Market leader X5 Retail Group posted a 347% jump in gross merchandise value and became Russia’s largest digital company in food retail.
According to Data Insight’s ranking of Russian e-commerce sites by sales volume, number of orders and average order value, Wildberries maintained its leadership in 2020. The company’s sales revenues nearly doubled year on year and reached 413 billion rubles ($5,7 billion). However, the retailer’s net profit totalled 2,11 billion rubles ($29,1 million) in 2020, which was twice less compared to the previous year. Last year, Wildberries launched sales in Poland, Slovakia, Ukraine and Israel and announced plans to expand into Western Europe and the USA in early 2021.
Ozon.ru ranked second with impressive year-on-year revenue growth of 144% last year. In March 2020, the retailer had a successful $150-million pre-IPO funding round, while in November, it raised more than $1,2 billion instead of the expected $500 million on the NASDAQ exchange. Meanwhile, electronic device retailer Citilink.ru fell from the second place in 2019 to the third in 2020 posting a relatively modest 47% year-on-year growth. Merlion Group, which owns the retailer, is in talks with Sber about a potential acquisition.
The performance of international retailers Ikea and Leroy Merlin was also impressive last year. The Swedish company generated almost $566 million in online sales revenues (up by 175% compared to 2019), while its French competitor earned around $524 million (up by 217%), reads Data Insight’s report. The US giant Amazon is absent from this ranking, as its sales to Russian consumers are based only on cross-border supply and, therefore, are modest.