Consumer Attitudes and Online Retail Dynamics in Russia

Jan 30, 2013, 05:18 ET from Reportlinker

NEW YORK, Jan. 30, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Consumer Attitudes and Online Retail Dynamics in Russia

http://www.reportlinker.com/p01089835/Consumer-Attitudes-and-Online-Retail-Dynamics-in-Russia.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=e-Commerce

Product Synopsis

Provides in-depth analysis of the latest trends in online consumer shopping, covering drivers of online shopping, consumer insights, market dynamics (covering 25 product categories) and reviews of the latest best practice in online retail site design- Based on the latest data, the report not only provides details of the size and growth of this increasingly important channel, it also provides essential contexts on the penetration of online sales by product groups, how growth has developed over time, and the key drivers of this market in the future

Introduction and LandscapeWhy was the report written?

"Consumer Attitudes and Online Retail Development in Russia" is the result of Canadean's extensive market research covering the online retail industry in Russia. It provides the magnitude, growth, share, and dynamics of the online retail market in Russia, and is an essential tool for companies active across Russia's online retail value chain and for new companies considering entry into the Russian online retail market. It provides data for historic and forecast online retail sales, and also includes the business environment and country risk related to the Russian online retail environment. By examining best practice from leading national large-scale online retailers (but specifically excluding the likes of Amazon, whose sites are well-known and vary little by country), as well as reviewing innovative approaches from smaller companies, the report provides insights and ideas about how best to approach growing online sales for your business.

What is the current market landscape and what is changing?

While the online shopping markets in Moscow and St. Petersburg are strong, key to the future of online shopping attitudes and behaviors in Russia are the developing cities of the country's Southern and Eastern regions, which have rapidly growing populations, whilst infrastructure investment is bringing down the price of broadband connections.

What are the key drivers behind recent market changes?

Population growth in urban areas, increasingly affordable internet connections and growing computer literacy, will combine to make Russia one of the most valuable e-commerce opportunities in the world; however, security issues with online payments and the complex logistics of delivering goods across such a vast country may stunt the growth of online markets.

What makes this report unique and essential to read?

Consumers have been reacting to the effects of the global recession, including the following recovery period, on their discretionary spending, and retail markets have been no exception. While the country by country market changes have varied, nowhere has been left totally untouched. This report quantitatively examines the components of change in the market by looking at historic and future growth patterns, including how changes in consumer behavior have affected the online retail sector for different product categories.

Key Features and Benefits

Understand consumer behavior and the online trends in Russia.

Understand which products will be the major winners and losers in the coming years.

Learn from best practice approaches outlined in the case studies of leading online retailers.

Improve market and strategic planning using highly granular, forward-looking market data. Detailed category coverage is provided, covering 25 products across eight product groups that include: Apparel, Accessories, Luggage and Leather Goods, Books, News and Stationery, Electricals and Electronics, Food and Grocery, Furniture and Floor Coverings, Home and Garden Products, Music, Video and Entertainment Software, and Sports and Leisure Equipment.

Assess the impact of the economic recession and recovery on market growth.

Key Market Issues

While online retail sales in Russia will grow much faster than sales in traditional retailers, growth patterns across both channels mirror each other. Annual growth rates declined rapidly during 2007–2009 as the Russian economy was hit by the global financial crisis. The Russian economy recovered in 2010, after which, growth rates will increase in both traditional and online retail to 2016.

Growing internet penetration in the regions outside of Moscow and St. Petersburg will be the key driver of future growth in the number of internet users. Penetration rates in most of Russia's regions lag far behind those in Moscow and St. Petersburg as a lack of infrastructure investment means high connection costs; however new investment is driving these costs down, resulting in a rise in penetration rates.

Approximately one-fifth of mobile phones in Russia in 2011 were smartphones, and this relatively low penetration will limit the potential for mobile commerce (m-commerce). Unlike in Western Europe, Russian mobile operators tend not to subsidize the cost of handsets, which means that consumers have to purchase smartphones at full price; making them too expensive for many.

The sheer size of Russia, coupled with an unreliable postal service, has created logistical difficulties for many online retailers. To get around this, leading retailers such as Ozon have launched their own courier services, and operate pick-up points around the country.

Online retailers are targeting key regional cities, whose populations are growing rapidly and are benefiting from extensive infrastructure investment, which is driving down connection costs and increasing connection speeds. However, the novelty of online shopping means that many consumers use the internet to look for products that are difficult to find locally, as opposed to in Moscow and St. Petersburg, where online retailers compete directly with local retailers on the basis of price, range, and service.

Key Highlights

Online retail's share of total retail sales increased from 0.8% in 2006 to 1.7% in 2011, and is expected to reach 3.4% in 2016.

Books, News and Stationery was the category with the highest percentage of sales originating online in 2011; however, by 2016 it will be overtaken by Music, Video and Entertainment Software as a growing amount of media will be both purchased and consumed online.

Russia has a low Fixed Broadband penetration rate, only 12.2% in 2011. This low penetration rate is the result of the country's large size and undeveloped communications infrastructure, though the rapid increase in the penetration rate from 2.0% in 2006 shows that investment in key urban areas is taking place.

In 2011, online retail penetration in Russia was lower than the global penetration rate by two percentage points. Although the gap will decrease slightly over the following five years, by 2016, online retail penetration in Russia will still remain below the global average.

In terms of absolute value, Computer Hardware and Software was the largest product category in the Electrical and Electronics group; however, in terms of online sales growth, Communications Equipment was the fastest-growing category during 2006–2011, and will remain the fastest-growing category during 2011–2016.

Table of Contents 1 Introduction

1.1 What is this Report About?

1.2 Definitions

1.2.1 This report provides 2011 actual sales; while forecasts are provided for 2012 - 2016

1.2.2 Changes to terms used in the Canadean taxonomy

1.3 Summary Methodology

1.3.1 Overview

1.3.2 The triangulated market sizing method

1.3.3 Industry surveys in the creation of retail market data

1.3.4 Quality control and standardized processes

2 Consumer Insight: Online Shopping Attitudes and Behaviors

2.1 Overview of the Russian Online Shopping Environment

2.1.1 Internet penetration is increasing rapidly

2.1.2 The number of fixed broadband connections is low, but growing

2.1.3 Russia has a high number of mobile phone subscriptions

2.2 Consumer Attitudes and Behavior

2.2.1 Online sales growth will continue to increase rapidly

2.2.2 Online retail accounts for a low share of total retail sales in Russia

2.2.3 Online retailers are targeting developing cities for growth

2.2.4 Online sales of Music, Video and Entertainment Software will grow quickly

2.2.5 Cash-on-delivery is a popular payment method

2.2.6 Poor postal service discourages consumers from shopping online

2.2.7 Mobile commerce's potential is limited by the low use of smartphones

2.2.8 Few Russians use their smartphones for shopping

2.2.9 Russians are active users of social media

3 Online Channel Dynamics

3.1 The Online Channel's Share of Total Retail Sales

3.1.1 Russian online vs. offline channel forecasts

3.1.2 Online penetration: global and regional comparisons

3.2 Channel Dynamics

3.2.1 Russian retail channel dynamics - future performance

3.2.2 Channel group share development

3.2.3 Individual channel performance

3.3 Category Dynamics

3.3.1 Online vs. offline retail sales comparison by category group, 2011

3.3.2 Online retail market dynamics by category

3.3.3 Online retail sales share by category group

3.3.4 Food and Grocery categories: market size and forecasts

3.3.5 Electrical and Electronics categories: market size and forecasts

3.3.6 Music, Video and Entertainment Software categories: market size and forecasts

3.3.7 Apparel, Accessories, Luggage and Leather Goods group categories: size and forecasts

3.3.8 Books, News and Stationery categories: market size and forecasts

3.3.9 Sports and Leisure Equipment categories: market size and forecasts

3.3.10 Furniture and Floor Coverings categories: market size and forecasts

3.3.11 Home and Garden Products categories: market size and forecasts

4 Case Studies: Leading Online Retailers in Russia

4.1 Retailer 1: Utkonos

4.1.1 Business description

4.1.2 Site experience

4.2 Retailer 2: Ozon

4.2.1 Business description

4.2.2 Site experience

4.3 Other Innovative Retailers in Russia

4.3.1 KupiVIP

4.3.2 Holodilnik

4.3.3 M.Video

5 Appendix

5.1 About Canadean

5.2 Disclaimer

List of Tables Table 1: Russia Exchange Rate RUB-US$ (Annual Average), 2006-2011

Table 2: Canadean Retail Channel Definitions

Table 3: Canadean Retail Category Definitions

Table 4: Changes to Canadean Taxonomy

Table 5: Canadean Retail Country Coverage

Table 6: Total Internet Users and Penetration, 2006-2011

Table 7: Total Broadband Internet Subscribers and Penetration, 2006-2011

Table 8: Total Mobile Phone Subscribers and Penetration, 2006-2011

Table 9: Russian Online vs. Offline Retail Sales and Forecast (RUB billion),2006-2016

Table 10: Russian Online vs. Offline Retail Sales and Forecast (US$ billion),2006-2016

Table 11: Russian Online vs. Offline Retail Sales and Forecast (% Share), 2006-2016

Table 12: Russian Online Sales vs. Global Average

Table 13: Russian Online Sales vs. Central and Eastern Europe

Table 14: Russian Overall Retail Segmentation (RUB billion) by Channel Group, 2006-2016

Table 15: Russian Overall Retail Segmentation (RUB billion) by Channel Group, 2006-2016

Table 16: Russian Overall Retail Segmentation (US$ billion) by Channel Group, 2006-2016

Table 17: Russian Overall Retail Segmentation (%) by Channel Group, 2006-2016

Table 18: Russian Channel Retail Sales and Forecast (RUB billion) by Channel, 2006-2016

Table 19: Russian Channel Retail Sales and Forecast (US$ billion) by Channel, 2006-2016

Table 20: Russian Channel Retail Sales and Forecast (RUB billion) by Channel, 2006-2016

Table 21: Russian Channel Retail Sales (US$ million), Online vs. Offline, 2011

Table 22: Russian Online Retailers Market Dynamics by Category Group, 2006-2016

Table 23: Russian Online Retail Sales and Forecast (RUB billion) by Category Group, 2006-2016

Table 24: Russian Online Retail Sales and Forecast (US$ million) by Category Group, 2006-2016

Table 25: Russian Total and Online Retail Sales in Food and Grocery Categories (RUB billion), 2006-2016

Table 26: Russian Total and Online Retail Sales in Food and Grocery Categories (US$ million), 2006-2016

Table 27: Russian Total and Online Retail Sales in Electrical and Electronics Categories (RUB billion), 2006-2016

Table 28: Russian Total and Online Retail Sales in Electrical and Electronics Categories (US$ million), 2006-2016

Table 29: Russian Total and Online Retail Sales in Music, Video and Entertainment Software Categories (RUB million), 2006-2016

Table 30: Russian Total and Online Retail Sales in Music, Video and Entertainment Categories (US$ million),2006-2016

Table 31: Russian Total and Online Retail Sales in Apparel, Accessories, and Luggage and Leather Categories (RUB billion), 2006-2016

Table 32: Russian Total and Online Retail Sales in Apparel, Accessories, and Luggage and Leather Goods Categories (US$ million), 2006-2016

Table 33: Russian Total and Online Retail Sales in Books, News and Stationery Categories (RUB billion), 2006-2016

Table 34: Russian Total and Online Retail Sales in Books, News and Stationery Categories (US$ million), 2006-2016

Table 35: Russian Total and Online Retail Sales in Sports and Leisure Equipment Categories (RUB billion), 2006-2016

Table 36: Russian Total and Online Retail Sales in Sports and Leisure Equipment Categories (US$ million), 2006-2016

Table 37: Russian Total and Online Retail Sales in Furniture and Floor Coverings Categories (RUB billion), 2006-2016

Table 38: Russian Total and Online Retail Sales in Furniture and Floor Coverings Categories (US$ million), 2006-2016

Table 39: Russian Total and Online Retail Sales in Home and Garden Products Categories (RUB billion), 2006-2016

Table 40: Russian Total and Online Retail Sales in Home and Garden Products Categories (US$ million), 2006-2016

List of Figures Figure 1: The Triangulated Market Sizing Methodology

Figure 2: Total Internet Users and Penetration, 2006-2011

Figure 3: Total Fixed Broadband Internet Subscribers and Penetration, 2006-2011

Figure 4: Total Mobile Users and Penetration, 2006-2011

Figure 5: Russia Online Retail Growth vs. Total Retail Growth (%), 2007-2016

Figure 6: Online Retail Sales as a Percentage of Total Retail Sales in Select Central and Eastern European Countries (%), 2011

Figure 7: Online retailers will find key opportunities in developing regional cities

Figure 8: Russian Retail Sales by Category, Online vs. Offline (%), 2011 and 2016

Figure 9: Few Russians are interested in using their smartphones for m-commerce

Figure 10: Key Social Media Networks in Russia

Figure 11: Russian Online and Offline Retail Sales and Forecast (RUB billion), 2006-2016

Figure 12: Russian Online Sales vs. Global Average (% of Total Retail)

Figure 13: Russia Online Sales vs. Central and Eastern European Countries Average (% of Total Retail)

Figure 14: Russian Overall Retail Market Dynamics by Channel Group, 2006-2016

Figure 15: Russian Retail Sales and Forecast (RUB billion) by Channel Group, 2006-2016

Figure 16: Russian Retail Sales by Category, Online vs. Offline (%), 2011

Figure 17: Russian Online Retailers Market Dynamics by Category Group, 2006-2016

Figure 18: Russian Online Retail Sales and Forecast (US$ million) by Category Group, 2006-2016

Figure 19: Utkonos - Product Category Page

Figure 20: Utkonos - Product Page

Figure 21: Utkonos - Mobile Apps

Figure 22: Ozon - Homepage

Figure 23: Ozon - Category Page

Figure 24: Ozon - Product View

Figure 25: KupiVup - Home Page

Figure 26: Holodilnik - Product filter

Figure 27: M.Video - Overstock

Companies Mentioned Utkonos, Ozon, KupiVIP, Holodilnik, M.VideoTo order this report:e-Commerce Industry: Consumer Attitudes and Online Retail Dynamics in Russia

Nicolas Bombourg
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