YAC/m conference hosted by Yandex every spring is usually marked by important announcements. Last week’s event was not an exception and Yandex surprised the audience with new revolutionary features in Yandex.Market. The new relaunched Yandex.Market will partially solve the main hurdles that prevent Russian e-commerce from growing faster: delivery, payments and lack of trust towards online merchants.
Hurdles of Russian e-commerce
While internet usage in Russia is growing at astonishing tempo, the growth of e-commerce is slowing down.The turnover of Russian e-commerce increased significantly last year, but in Q1 of 2014 it only grew with 4%.
The total number of online retailers in Russia is questionable, but lays somewhere between 40 000 and 80 000 depending on the source of data. The market is heavily dominated by a handful of large players. According to Russian market research company DataInsight, 97% of all online merchants are the “long tail”, which generates less than 10% of overall e-commerce turnover in the country.
Obviously, smaller stores do not have the budgets for using advanced marketing technologies to acquire traffic and for building brands. The majority of them have less than 20 visitors per day.
What is Yandex.Market
Yandex.Market is an analog of Google Shopping and is also the largest price comparison site in Russia. Today it boasts 15 000 listed stores and 19 million monthly users.
Market offers advertisers both CPC (minimum CPC is 3 RUB, which is approximately 8 cents) and CPA models (1% commission). Apart from the obvious benefit of getting exposure in the audience of the service, sometimes Yandex inserts Market listings in its search results.
New Yandex.Market solves delivery and payment problems
Both Yandex.Direct and Yandex.Market have been efficient advertising tools for small and medium businesses for years. With relatively small budgets companies could afford to promote their services thanks to keyword- and geo-targeted ads.
Having solved the problem of online distribution for small retailers, Yandex is now aiming to help them with logistics and payments as well as fight the lack of trust towards not-so-kown online stores.
The new Yandex Market will offer the following features:
1. Escrow-like payment guarantee tool
Buyers will be able to make payments directly in Yandex.Market interface. Payment will be taken from the buyer’s account, but only transferred to the seller once the product has been shipped.
Yandex also provides a guarantee that the buyer will receive the product or get the money back.
2. Dispute tool
All product and delivery issues should be taken care of by the supplier, however if the supplier does not answer or refuses to help, buyers will be able to file a complaint directly with Yandex. Yandex promises to reach out to the seller and try to solve the issue with them.
3. Logistics tool
Not too long ago Yandex invested into MultiShip – an aggregator of various delivery services in Russia that allows the retailers to find and choose a company that is able to deliver goods to any specific region of the country.
Neither Yandex not MultiShip will provide storage or shipping services, but rather connect retailers to suppliers in the system.
4. Personlaized recommendation tool
Yandex has great amounts of data about users, their behavior, interests and browsing history. Based on all this data and machine learning technology, Yandex.Market will offer the product through personalized recommendations,which should in theory increase conversion.
What’s the catch?
There is no real catch, but there are rules and there are fees. The sales made with the help of new Yandex.Market features will cost advertisers 3% commission. This is not too much though, given that the average cost of payment processing in Russia is higher than that.
In order to be eligible to use the features a store would need to have at least 3 months history of selling via Yamdex.Market and at least 3 star rating.
Besides, this might seem like a heaven for cross-border retailers, but in reality the solution is tailored for domestic ones. Selling from abroad, one would still need to get the products through the Russian customs before being able to benefit from these handy new features.