Data Insight’s growth projections and key factors contributing to e-commerce market growth
Data Insight experts have published their new forecast of Russian e-commerce market growth. In this forecast, they only take into account Russian-based businesses with online stores that also have warehouses in Russia. The e-commerce market evaluation does not take into account online sales of services, content, or sweepstakes. The data also excludes purchases of goods from foreign e-commerce stores by Russians, as well as purchases made by foreigners in Russian online stores.
E-commerce market in Russia in 2011–2019
In 2011 to 2019 Russian e-commerce market growth was driven by growth in the number of active Internet users. The more experience they gained in using various online services, the more open they were to buying online.
Here are the key metrics for 2011–2019 Russian e-commerce market growth:
- CAGR — 28%
- online sales volume (including taxes) — from 235 billion rubles to 1.72 trillion rubles
In 2019 the e-commerce market growth rate was higher than before, primarily because of TV and online ads and investments into infrastructure. The biggest market players were able to attract new customers and reengage customers who did not enjoy their previous online buying experiences.
Forecasting Russian e-commerce market growth in 2020–2024
Data Insight experts were expecting the Russian e-commerce market to continue growing, with an expected CAGR of 26.6% in 2020–2024. Given changes in consumer behavior in 2020 (we covered them earlier in this summary), they now expect a CAGR of 33.2%, with sales growth from 1.7 trillion to 7.2 trillion rubles.
Factors contributing to Russian e-commerce market growth
In their forecast, Data Insight experts updated their estimates based on the following factors:
- Growth in the pool of Russian consumers who started buying goods online in 2020.
Most of these customers would have tried buying goods online in the following 5 years regardless of consumer behavior shifts. In addition, they’ll be less active than Russians with more experience in online purchases.
- Shift of purchases from offline to online.
In 2020 e-commerce stores saw a significant growth of sales numbers and average sales volume.
The growth rates in 2021 are not expected be quite as high as in 2020, but Data Insight experts predict that most consumers will continue buying online in 2020 and 2021.
- Remote work leading to relocation away from large cities.
With work from home becoming more prevalent among Russian companies, many employees are likely to move out of large cities to towns where stores might not have the goods they are accustomed to.
This is expected to lead to online sales growth.
- FMCG online sales growth.
This is one of the market sectors with the highest growth potential (Russian Search Marketing wrote about it here and here).
Summary: what to expect on the Russian e-commerce market in 2020–2024
- 10 million new online buyers
- 5–7 million Russians working remotely and shopping online
- sales growth from 1.7 trillion to 7.2 trillion rubles
- CAGR of 33.2%
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For additional information on e-commerce market trends in Russia, browse past articles and resources here.