Monday, September 10: Russian social network vKontakte reported the highest number of visits in their history in one day – 38.4 million. This is 50% higher than the average daily number of visits in September last year. It is also about 7 million higher than yesterday’s visits of the second largest social network in Russia Odnoklassniki (31.6 million).
It seems vKontakte take pride in their visitors trends, because on the same day they opened up their traffic statistics for everyone. Metrics like pageviews , sessions , visitors, average visit duration (min) , pageviews/visitor and some other are now available at Liveinternet.com/stat/vkontakte.ru/.
Source: http://www.sostav.ru/news/2012/09/11/vkontakte_tns/ (in Russian)
2 Russian email services Mail.ru and Yandex Mail have become 4th and 5th largest email services in Europe in terms of unique visits, reported ComScore. Focused solely on Russian-speaking audience, Mail.ru and Yandex Mail attracted 42,77 million / 25,14 million unique visitors in June 2012 alone.
Increase in email usage in Russia is not surprising, given the rapid growth of Russian Internet audience overall. Comparing to the average for Europe 14% increase, the amount of visits for Mail.ru and Yandex Mail went up by 22% and 37% correspondingly.
Interestingly, being the largest online audience in Europe, percentage-wise Russia is only 7th, when it comes to email usage. According to the ComScore report, 69,9% of Russian Internet users visited any of web-based email services in June 2012.
Great infographics about Russian eCommerce from Russia Beyond The Headlines.
I’ve been writing a lot about astonishing growth in Russian online advertising sector and eCommerce. Here is yet another amazing number: according to a recent research published by Higher School of Economics, 13% of all goods in Moscow were purchased online in Q2 2012. This essentially means that every 7th sale was an online sale. How about it? In Q2 last year the figure was 9%.
In other regions of the country, however, the percentage of online sales sightly decreased comparing to last year (from 8% to 7%).
The data is collected from 4000 companies across 78 regions in Russia. Moscow and Moscow region in this research are represented by around 200 companies.
To the the full report, visit www.hse.ru (in Russian).
Russian eCommerce demonstrated astonishing growth in 2011 increasing its turnover by 29% ending up at 310 billion Russian rubles (around 10 billion US dollars), according to Data Insight latest report. While it is a well-known fact that Moscow region has the best buying ability in the country, most of the growth in 2011 came from other regions in Russia.
In the regions supply is not catching up with fast growing demand: a lot of products are impossible to buy there, or are imported by small local businesses and therefore cost more that in large chain stores in Moscow. In search for better assortment and better deals the population starts moving online. Interestingly, the most active online shoppers (outside Moscow) live in the most remote places like Sakhalin, Magadan, Kamchatka and Yakutia (see map below for reference):
Moscow region is responsible for 45% of all online sales in Russia, followed by Saint Petersburg (11%) and Ekaterinburg (4%). All in all, 45% on all eCommerce sales in 2011 came from regions outside Moscow.
Top eCommerce categories in Russian regions
According to Data Insight, the most popular items purchased by non-Moscow residents via Internet are airplane and train tickets, apparel, computers and electronics, as well as books and products for children:
The largest online retailer Ozon.ru reports a different breakdown though: 30% – Books, 30% – Electronics, the rest is divided among multiple categories, where some of the popular ones are household appliances, products for children and products for pets (source: interview with Maelle Gavet, CEO of Ozon.ru; in Russian). This could be, however, because Ozon.ru, just like its American “big brother” Amazon, was initially a book store.
Hurdles and opportunities in Russian eCommerce
Russia has a reputation of a difficult place for doing business, due to bureaucracy and corruption among other things. However, a lot of online businesses run by Russians and by foreigners succeed and prosper. A lot of business owners, in fact, say that Internet is one of the “cleanest” areas of business in the country, one of the being Oskar Hartmann, German entrepreneur and CEO and founder of KupiVIP.ru in his interview to Forbes (in Russian).
The most difficult part of running an eCommerce store in Russia is logistics. The country is huge: some places don’t have paved road connections, some places are isolated by ice and snow for months. Russian Post, although able to deliver packages to any village or town in the country, is slow and not always reliable (from my personal experience at least). Ozon.ru has created its own delivery network with couriers driving around with packages in larger cities. It works perfectly for Ozon, but how many businesses can afford creating one?
Another problem, as I see it, is processing payments. Apart from limited usage of credit cards and unusual online payment options, Russians prefer to pay in cash. For Ozon.ru ‘cash on delivery’ stands for 80% of all received payments, followed by credit card payments (10%) and 18 different electronic payment solutions, such as Yandex.Money and WebMoney (10%). The situation is different only in travel industry, where 60% of customers choose credit card payments. Obviously, handling cash on delivery is not as easy as processing credit cards and PayPal directly on a website.
The prospects of the Russian market, however, I believe are great. While being the largest online market in Europe, only 7% of Internet users shop online, and eCommerce today makes up for only 1% of Russian retail market. Data Insight predict another 25% jump in Russian eCommerce turnover in 2012.
Reading my usual dose of Russian press, I stumbled on an interesting interview with a CEO of one of the largest SEO companies in Russia in Kommersant.ru. Although 90% of the interview is company’s self-advertising, I found their evaluation of Russian market of SEO services quite interesting.
The CEO in question estimates that the value of the market of SEO services in Russia is somewhere between 16 and 20 billion Russian rubles (around 690 million USD), where 9 billion were spent on links and the other 7 to 12 billion – on service fees to agencies and freelancers. Apparently, large agencies (which are few) are responsible for only 20-30% of this amount. The rest of the money is distributed among smaller SEO agencies and freelance SEO specialists.
The CEO also says that with all the recent changes in Yandex ranking algorithm, SEO for Yandex became more complicated and more time consuming. Hence prices of SEO services increased, and in some cases doubled. An average Russian business is estimated to spend around 80-100 thousand Russian Rubles (2.7 – 3.5 thousand USD) per month.
I personally feel the numbers are blown out of proportions. I’ve seen prices 10 times lower than this. But that’s an opinion.
What do you think?
In 2010 Russia became the fastest growing market in Europe in terms of online advertising revenues, and continued strong growth throughout 2011. According to the Russian Association of Advertising Agencies (AKAR), the market reached 1,4 billion USD, which is a 56% increase comparing to 2010.
According to AdScore (in Russian), Yandex holds the largest share of Russian contextual advertising market, followed by Google Russia and Begun:
Although Yandex has lost some of it’s market share in 2011, it is still by far the largest player of Russian online advertising market. The company reported $622.2 million in revenues by the end of last year.
Yandex Direct is said to have 270 000 active advertisers in 2011. The average spend per advertiser per month is 2500 Russian Rubles (approx. 85 USD). In 2010 the number was higher (3000 Rubles/ 100 USD per month), and decreased due to the fact that more and more small business with low marketing budgets start advertising online.
According to AdScore, vKontakte PPC platform is showing very fast growth in Russia. Advertising budgets of Deal-of-the-Day type of sites (Groupon and alikes) as well as local services providers are quickly shifting towards social networks from search and traditional media.
In one of my previous posts I wrote about Google gaining market share in Russia by aggressively promoting it’s non-search products, such as Android and Chrome, for example.
Browsers with built-in default search engine are generally a popular way to get extra searches. Yandex teamed up with Firefox, while Google runs TV commercials for Chrome.
It seems like Google’s marketing efforts are paying off. According to several independent analyst companies Chrome became the most used browser in Russia in December 2011, surpassing Internet Explorer, Firefox and Opera.
During 2011 Yandex lost 4% of searches in Russia to Google.ru, reports Vedomosti (in Russian). I heard mentions of this fact throughout last year, but here is how it looks in absolute numbers.
According to LiveInternet statistics, in December last year search market in Russia was divided between Yandex, Google.ru and other smaller search engines as shown below:
In December 2010 Yandex held 64,1% of the search market, and Google – 21,5%. Quite a big change in one year, isn’t it?
Analysts say that Google’s market share most likely increases not due to the search engine traffic itself, but because of other platform Google owns or has partnerships with. Presumably, the majority of growth can be explained by wide use of Android devices (where search is powered by Google), social network Google+ as well as popularity of Chrome browser, which Google has been advertising on TV in Russia since half a year!
I have to mention, however, than Yandex also works with various partners and web browsers. Facebook search in Russia is, for example, powered by Yandex. Same goes for Windows Phone 7 and Firefox, among others. Needless to say that Aport and Rambler use Yandex’s search engine, and that Bing’s ads in Russia are in reality Yandex Direct.
Just like I predicted earlier, Yandex now announced a strong focus on mobile technologies in 2012, and not only on advertising. They acquired a mobile development company SPB Software, and, I suspect, is going to work on a response to Android – their own mobile OS.
A spokesman of Yandex told Vedomosti that the company expects 58-60% growth in revenue in 2012 and not focusing on increasing their market share, but rather creating new and useful products. The next big release, for example, is supposed to be a new search platform, which better understands interests and preferences of Internet users (read: personalized search).