Very recently Yandex released an interesting research that compares search behavior of Russian Internet users living in the two capitals (Moscow and Saint Petersburg) with other cities in Russia – from large to very small.
The report highlights the differences between ways people interact with search engines as well as types of product and services-relates searches across the country. Please dig in!
Russia has proven to be a difficult market to enter for the foreign online retailers. The problems do not end with difficult language, local search engines and advertising platforms, and cultural differences. The logistics is one of the main challenges; payments is the other.
Russian market is very different from other European markets when it comes to online payments. E-commerce is on a pretty early stage of its development, and the trust to online payments is low. Cash on delivery is still very common way of paying for products purchased online. Local online payment systems dominate the market, while PayPal has a very small share of the market.
During the last Russian Internet Forum (RIF) conference help in Moscow in April a number of Russian online payment providers such as PayU and Robokassa, as well as an independent research companies TNS Russia and DATA Insight shared some insights into the situation with online payments in Russia. Below I will try to summarize the main points from their presentations and give a snapshot of the current state of the market.
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):
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:
Russian Contextual Advertising Market
Yesterday morning Russian Internet press reported that Yandex and Skype signed an agreement and will begin promoting each others’ services in Russia.
Skype will offer everyone who downloads their PC client to install a browser extension Yandex Bar. Yandex Bar, in exchange, will display Skype account balance and provide an easy way to top up Skype account via Yandex Money. This looks like a good way for Yandex to attract more users and possibly regain the market share that they lost to Google last year. In 2011 Skype showed 40% increase in Russian user base ending the year with 22,4 million registered accounts.
So what does Skype get in return? From what I read today it is very unclear: Skype will be promoted on Yandex sites and properties (which is of course a lot of traffic), but it is not specified how.