“Your first 50 right steps to enter the Russian food market”.
Step № 48 -“E-commerce in Russia”
E-commerce does exist is in Russia, but it is not the main sales channel for food companies. However, I have got many questions on that, let me tell you a little about how food businesses develop their sales via the Internet in Russia.
To start with, you need to understand how much Internet services cost in Russia. A monthly payment for a household is 500 rubles ( 7.7 usd) on average. It provides you with a speed of 100 MB a second and it is unlimited. Unlimited tariffs are the main types of tariffs provided by all Internet providers in Russia. They are simple and clear, therefore, they are popular.
It is obvious that Russia is a very big country, but even in the most remote regions (the Arctic Circle), there is always mobile Internet. The minimum is 3g, but generally it is 4g and LTE. On average, 1GB of mobile Internet in Russia costs 150 rubles. Many mobile operators offer tariffs in which the use of social networks and instant messengers like WhatsApp and Viber is not included in the basic Internet package. For example, if you buy 1 GB of mobile Internet for 150 rubles (2.3 usd) per month and use only WhatsApp and Viber, you will have the same 1 GB of paid Internet by the end of the month.
So, as you can see the Internet in Russia is available and easily accessible to everyone.
The most popular online stores.
In Russia there is no one or two main websites where all Russians make all their online purchases, but there are several quite popular online stores.
There is an analogue of Ebay, which is called Avito. It is like a large flea market selling used things. You can find food there too, but it is more for individual sales of small lots. A serious client will never buy anything from Avito, only for personal use.
Chinese Aliexpress is widely used too. If someone can wait for delivery and wishes to save 50-100% on a product, then they order for Aliexpress. I do not have friends who have not bought at least something on this website. In most cases people buy electronics, household appliances, and consumer goods. Buying food from Aliexpress is not common. Perhaps, it might be because Chinese food is not well known in Russia. To buy food from China people use other websites.
The most advertised online store is Ozon. They claim to be number 1 online store in Russia. This online store positions itself like Russian Amazon. There are a lot of products from all categories. There is a lot of food too. For its subscribers Ozon offers free delivery and extra discounts, but in many cases they cannot guarantee either.
Delivery to Ozone pick-up points costs 300 rubles, delivery by courier – 400 rubles. If you buy a “prime” subscription for 6 months which costs 1,600 rubles (25 usd) you will only get your free delivery for an order above 3,000 rubles (50 usd). In other cases you will only get a 30% discount. However, many of their customers have noticed that though a discount of 30-40% is announced, in fact only 10-15% off the price is guaranteed. This “prime” subscription works only in several regions of Russia, and is not available for the rest. Who does not know, the same subscription “prime” in Amazon cost 99 dollars a year.
In the end, you can easily find everything much cheaper if you search a little bit more on the Internet. As for food products, they are normally are even more expensive than in a regular store.
It is beneficial to sell via Ozon for those foreign companies that are not sure about supplying their food products to Russia and have no similar food products on the market to compare the prices. With no doubt, being a large online store, Ozon can boast huge Internet traffic and with a right marketing strategy, you can sell your food products successfully. Moreover, they have a very large delivery network in Russia.
Online shopping for food.
Many people buy clothes, household goods, electronics online. As for food, it is bought over the Internet in two cases:
- You need ordinary food, but you have no time to go to the store near your home.
- You need some exclusive food that cannot be found in a supermarket in your city.
As an example, you can easily find online stores for vegetarians or online food stores of products from Thailand. These stores are popular because there are authentic goods, no extra charges of retail stores or second-hand dealers.
That is why even online food shopping is becoming quite popular in Russia, especially among people in big cities. When you need to buy something online, you simply enter something like “buy chilled salmon in Moscow” in a search engine and evaluate the options in terms of prices and other conditions.
Almost all food companies have a separate section on their websites with descriptions of how to buy their goods via the Internet. There are many transport companies and courier delivery companies in Russia, as well as the Russian Post which delivers absolutely to all cities of Russia.
As I mentioned above, by now there are quite many exclusively online grocery stores. For example, an online store that sells only Italian food or only vegetarian or organic/eco products. Regular customers know these shops and usually buy from there. The main Russian supermarket chains also have their own online stores. Prices there are the same as the prices on the shelves of their off-line stores.
Now there are quite many Instagram shops that sell very specific niche products and it is very common for people to buy from such “online stores”. I often recommend launching such an Instagram shop to test potential sales of your products in Russia and to get customers’ feedback. If your products have a good shelf life and do not require a special temperature regime for storage, then it is very easy to make such a store. Moreover, It does not require much of investment.
In all online stores you will be offered a choice of several payment options – Visa, Master cards, webmoney, payment from the phone bill, payment to the courier at the time of delivery. The things they do not accept in Russia is WeChat Pay and cryptocurrency.
E-commerce for me.
Do I personally buy anything via online stores? Of course! We buy diapers for our daughter, it is cheaper than in a nearby store by 20%. My wife buys contact lenses because it turns out to be 50% cheaper than in any store in our city. We buy cat feed because he needs special feed that is not sold in a nearby store. I buy kim chi sauces in an online Korean goods store because real kim chi sauce is not sold in every supermarket in Russia. In case of diapers and cat feed, we just search on the Russian Internet for the best price. In case of kim chi sauce and contact lenses, we buy in specialized online stores.
E-commerce for you.
Is it possible to use e-commerce channel to sell your food products in Russia? Definitely yes. This is a very good solution to start entering into the Russian food market. It is also going to bring your additional income when you develop traditional sales channels in Russia.
In the next step I will tell you how to organize your online shop/business remotely. I will share how to look for and choose different outsourcing companies in Russia. In this way you will be able to sell in Russia from anywhere in the world and you will not need to open a fully-fledged office in Russia. This will be Step № 49.
Business Adviser on Russian Food Market
Please read the same my other steps:Backward