After helping companies with Russian e-commerce for 5 years, Peter shares some great insights into Russian buying habits and gives some tips of how to win the customer in this tough market.
Peter, you moved to Russia in 2006. What was your first impression about Russian Internet industry?
At that time, even large companies had websites which seemed a generation behind their US counterparts.
I remember trying to buy a TV and stereo via the Internet and it was hard to find a reliable Internet-based company. The ones with the best prices seemed shady. I ended up ordering from the website of a larger electronics retail chain. E-commerce involved a lot more frictions — after ordering, normally the company would telephone and confirm the order details. In the case of ordering groceries, they would also say which items were not in stock and suggest alternatives. Things haven’t changed all that much, except for the front ends which are now generally on par with global standards.
And today, when it comes to web design and product presentation is Russian consumers’ taste different from the Western online buyers’? What I mean is, basically, will the same design work for an e-commerce site in both US and in Russia?
There are two schools of thought on this issue. Some people contend that Russians expect more lively and congested sites, and also have a preference for red and yellow colors. Yandex.ru, the company’s home page in Russia, renders quite a bit differently than Google’s.
On the other hand, some of the most popular sites in Russia are very similar to their US counterparts. VK is more or less a clone of Facebook, right down to the color scheme. Ozon looks very similar to Amazon in terms of the home page and product displays. Google, eBay, Facebook, Airbnb, etc. have not made any changes to their global visual standards for their Russian sites. If there was such a big difference in the way Russians interact with websites, these companies certainly have the resources to make Russian-specific versions of their sites.
Specifically for e-commerce, most of the Russian sites prominently display their telephone numbers in their headers. This would be rare for a US site.
From your experience, is Russian consumer behavior different from the Western?
Yes, absolutely, although the differences are becoming less acute over time. It’s a logical result of the environment. People are slow to trust new companies and won’t easily divulge their credit card details. They are also afraid that their banks and credit card companies won’t compensate them in the event of issues with the online merchant.
In general, Russian consumer is not as developed and accustomed to e-commerce as the Western one. Moscow is different; it’s a country in itself. People here travel more, they have debit cards, so have an option to pay online (although they’d rather not).
All in all, to address the mass market in Russia you have to offer cash on delivery.
What about electronic currencies like WebMoney and Yandex.Money?
For the projects we run they are not very popular. We are working with foreign companies, who are already using PayPal as their payment system. If you have a Russian bank card and if it’s registered with PayPal, you can use that as a payment source. In other cases it’s just cash. I can only speak for my clients, but we do not have a lot of demand for Qiwi, Webmoney or Yandex Money.
Tricky question. How do you make Russian consumers trust your brand?
The most effective way is through a personal experience with the brand.
Most of the top Russian sites prominently display multiple contact points, including telephone, email and chat.
One of the benefits of Moscow being the dominant market in the country is that brands can create events and other local promotions, which foster personal interaction with consumers, but also have a positive ROI.
The cash couriers who deliver goods are also brand ambassadors. While some consider it a friction of the Russian e-commerce system, it is actually an opportunity to build a positive brand communication and even a positive addition to the bottom line if the couriers have a sales orientation.
Placements in glossy magazines are also useful, although most Russians understand that this is just another form of advertising. Popular bloggers come across as more genuine although this is also changing.
How important are customer reviews, forums and similar types of user-generated content?
They are important. This all goes under the heading of word-of-mouth. People don’t generally trust banners, and don’t trust what’s printed in fashion magazines, because they understand that whatever they read was pre-determined and paid for by advertisers.
When it comes to customer acquisition, what are the most important traffic sources for e-commerce sites in Russia?
Quantity and quality of traffic are very different from an e-commerce perspective.
Search-based targeting with PPC and SEO catch people when they are in the buying mode and they are relatively more important for immediate conversions.
Will it pay off to invest in SMM and content marketing? Or is it better to focus on direct response channels like SEO and PPC?
Content marketing is important in building awareness and quality links, which build trust. At Interstice Consulting LLP we work with Russian fashion bloggers to run contests or to provide candid reviews. Like elsewhere, Russian consumers place more trust in recommendations from friends or other opinion leaders rather than display advertising (including banners).
While statistics show that Russians are the world’s most intense users of social media on a per-capita hourly basis, it hasn’t been too commercially relevant for us. We maintain SM groups for all of our projects but it’s only the odd consumer who indicates that SM was their referral source for a direct purchase.
How developed is mobile e-commerce? Is mobile experience important to today’s Russian online consumers?
Certainly the mobile channel is growing rapidly in importance and companies like eBay are pushing their apps. Looking at some of the current statistics from the projects we operate, about 70% of visitors are using desktops, with another 15% each on mobile and tablet platforms.
Actually, tablets are becoming more important for fashion goods – the engagement figures are superior to both desktops and mobile phones.
While the number of users accessing websites through mobile phones is large and growing, it’s still insignificant from a final conversion point of view. According to the statistics I’ve seen for one major online retailer, mobile e-commerce was less than 1% of their total online sales. That’s been our experience as well. Russian consumers are using mobile to browse and learn, but not to transact.
It is also related to cash on delivery issue. If people do not pay online, they are not very likely to pay online on their mobile phones. Possibly, if it’s a standardized product like groceries, books or intangible products (software, music, e-books, gaming and value-added services on social media and dating sites etc.) that they know in advance, they might use their mobile phone to order, but if it is a fashion item, mobile is not the device that will create the entrance to Russian e-commerce. It is just another channel of ordering online, and everything else happens offline.