Europe is rapidly losing its share in the Russian e-commerce market to Chinese firms whose steady growth in the region has been fueled by this year's devaluation of the rouble.

About 70 percent of packages shipped to Russian consumers from abroad this year came from China, up from 40 percent in 2013, a report by industry watcher
East-West Digital News (EWDN) found.
With the rouble has declined nearly 40 percent against the euro this year, Russian consumers are ever more conscious of price. In addition, political tensions between Russia and
Western Europe have prompted many people to deliberately turn away from Western vendors, EWDN added
Russia’s annexation of Crimea in March last year and ongoing support for separatist rebels in eastern Ukraine has set off a deluge of international
repercussions, including U.S. and EU economic sanctions against Russia and Moscow’s retaliatory ban on a range of Western food imports. Geopolitical tensions aside,
however, well-known European brands are still doing well on the Russian market, Yakov Geronimus, business director for China at Russian Internet giant Yandex was quoted as
saying.
China’s growth in the e-commerce sector was driven by massive Chinese online marketplace AliExpress and Chinese sellers operating through Internet auction house eBay,
the report by EWDN found.
AliExpress is now considered to be the single largest foreign player on the Russian e-commerce market with 35 percent of cross-border sales, followed by eBay with 30 percent and
U.S. e-commerce giant Amazon with 7.5 percent, the report said.

Although reduced consumer spending power has slowed sales growth this year, Russia’s cross-border e-commerce market still expanded from about $3 billion in 2013 to $5 billion
in 2014, according to EWDN.
Other estimates are even higher. Denis Lyudkovsky, the president of Russia’s Association of Online Vendors, or AKIT, said earlier this month that cross-border trade would grow
to $7 billion and account for 30 to 35 percent of the total e-commerce market by the end of the year.
AKIT expects cross-border e-commerce trade will continue growing at a rate of more than 100 percent a year, claiming 60 percent of the total Russian e-commerce market
in 2015.
Although details on how the cross-border e-commerce shipments from China reach Russian customers remain vague, international express companies such as UPS, FedEx and DHL, which entered the
Chinese domestic market in 2012, play a significant and growing role.
At the end of 2014, China’s State Post Bureau approved Yamato (China) Transport Co Ltd, OCS Overseas Courier Service (Shanghai) Co Ltd and Kerry Logistics Co, to join the express firms. In late
2014, the government announced plans to open the express parcel delivery market further to foreign firms in an effort to force domestic companies to improve services.
Furthermore, Russian Post has teamed up with their Chinese counterparts due to a 900% increase of e-commerce goods being shipped from China to Russia in the past two years. Approximately 60% of
all international goods shipped to Russia come from China.
China Post and Russia Post also have agreed to develop an electronic data exchange to speed up Russian customs clearance for parcels. The two services have also begun talks to open new road,
rail, and air routes between the countries for shipments.

While Russian Post carries 90% of all shipments, there are other alternatives such as SPRS Express, which is a privately-owned Russian express company, with more than 13 years of experience in
the Russian market. It is second only to the Russian Post in terms of coverage, delivering to more than 6,000 cities, towns and villages across the country.
In 2012, SPRS launched its e-commerce cross-border shipment business, which is focused on the domestic delivery of express delivery shipments from Europe and China and competes head-on with
Russian Post and its subsidiary EMS.
Russia opens mail delivery service to China by rail
Russian Post has announced that it has launched a mail and package delivery service to China by rail. Prior to this service all mail sent from China to Russia had to be delivered by air or
road.
Russian Post states that the service has been made possible through a strategic cooperation agreement signed between authorities representing Russian Railways and Chinese Railways in 2014.
Packages will be gathered via connected lines inside China before being transported along the Trans-Siberian Railway to Moscow, Russia. The company said it expected the railway delivery service
to reduce excess operations in logistics and lower transportation costs.
The Russian Post also stated that it plans to expand railway delivery service to more Chinese cities after its new logistical hubs are put into operation in the Russian cities of Novosibirsk,
Yekaterinburg and Kazan.
Nol van Fenema
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