russian ecommerce market overview and trends
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E-commerce in Russia
Market Landscape
What Russia is….
• Country with large territory
• Customers behavior varies from region to region
• Diverse in Technology
* Source: Rosstat, 2011
17 075 400 km² or11,46 % from total dry landRanked 9 in the world by population size (142 914 136 mln people*)
Monthly internet audience is about 50 mln.
Source: Internet in Russia. FOM. Winter 2010/11
3
+10,1 mln.
Month
36,3 mln.
+3,9 mln.
Week
Day
Yearly change
-13%
-6%
+41%
Currently every 2rd adult Russian is on the Internet
Main growth – due to regions, 90% of new users outside of Moscow and Saint-Petersburg
4
Large and High Growth Internet Market Opportunity
Key Investment Highlights
Growth in Internet Users vs. Penetration
0
20
40
60
80
100
0 5 10 15
Inte
rnet
Pen
etr
ati
on
20
10
(%
)
Internet users CAGR 2010-14e (%)
Source: Euromonitor (January 2011), FOM (March 2011) for Russia
Key Developed Markets
Total Internet Users (MM)
Brazil
China
India
Russia 2010
50
66
54
3933 31
80
Germany UK Russia France Italy Spain
Ряд4 Ряд5
Russia 2014e
2010 2014e
BRIC
2011 e-commerce market estimated turnover 245 bln. Rub (6 bln Euro)
Annual growth by 17%
The average purchase ~ 2700 Rub (65 euro) varies from 4700 rub (113 Euro) in large cities to 2000 rub (48 euro) in small towns
55% of internet users buy or research before shopping on line:
• Online shopping browser – 24% (~ 12 mln. people)
• Regular online shoppers – 11% (~ 6 mln. people)
• Occasional online shoppers – 16% (~ 8 mln. people)
5Source: FOM. E-commerce market. March 2011.
Russia e-commerce key market facts
Buying trends
6
Perc
enta
ge o
f people
over
35
Percentage of population in cities 1 mln+
Proportion of people buying each product category: More than 15% 7-14% Less than 7%
Younger
10%
20%
Cosmetics & perfume
70%
Household appliances
and electronics
50%
30%
60%
80%
40%
Books
Clothes, shoes
Cell phones
Food
Children’s products
Computers &
peripherals
Travel tickets
CD&DVD
Older
Large cities
Small cities
Popular product categories
7
as a % of all online shoppers
Source: FOM. E-commerce market. March 2011.
Clothes, shoes
Books
Household appliances and electronics
Cosmetics and perfume
Cell phones and accessories
Children’s products
Food items
Computers and peripherals
Travel tickets
Audio and video DVDs
23
18
17
13
8
8
7
6
6
5
+5 pp
-1 pp
-4 pp
0 pp
-1 pp
+2 pp
-1 pp
0 pp
-3 pp
0 pp
August 2010
33% of payments are made remotely
8Source: FOM. E-commerce market. March 2011.
as a % of all online shoppers
Cash on delivery
Bank cards
Bank transfer
Online payment system
Payment terminal
SMS
0 10 20 30 40 50 60 70
65
15
8
7
6
1
Advance payment
This seasonfashion trends in Clothing and Shoes
search…
80%
Fashion became more and more popular
10 * Chart shows absolute yearly increase
jun
'09
aug
'09
oct '
09
dec '0
9
feb
'10
apr '
10
jun
'10
aug
'10
oct '
10
dec '1
0
feb
'11
apr '
11
jun
'11
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Clothes Shoes
jan feb mar apr may jun jul aug sep oct nov dec0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
107%108%
130%
100%
84%70%
64%
86%101%
129%
124%
109%
88%
106%
153%
125%
96%
68%55%
85%
106%
130%
114%
88%
Clothes Shoes
“Summer slump” – seasonal demand
11 Source: Words stat Yandex
Interest level: 4 regions lead the way
12Words stat Yandex
Clothes Shoes
33%
15%12%
12%
9%
8%
8% 3%
MoscowVolga RegionCentral part without MoscowSt. Petersburg&NorthwestUralSiberiaSouth
40%
13%11%
10%
8%
8%7% 3%
Category interest level by gender and age
13
Source: Words stat Yandex
Shoes
5%
< 18
18-24
25-34
35-44
> 45
< 18
18-24
25-34
35-44
> 45
0% 10% 20% 30% 40% 50%
3%
6%
11%
3%
1%
5%
13%
45%8%
4%4%
11%44%
16%
4%
1%
1%
2%
11%
50% 40% 30% 20% 10% 0%
Men
24%
Women
76%
Clothes
Women
79%
Men
21%
Advertisement click rate
14Source: Words stat Yandex
42%
“Clothes” queryAll queries
8,6%
do clickdo not click
49%
“Shoes” category
Users response rate by age
15 Source: Words stat Yandex
-150% -100% -50% 0% 50% 100% 150%
61%
52%
49%
42%
57%
39%
48%
51%
58%
43%
Series3 Series4
52%
50%
44%
52%
48%
56%
50%
48%
36%
64%
Clothes Shoes>45
35-44
25-34
18-24
<18
Popularity of TOP players in fashion
16 Source: Words stat Yandex
jul ause
p oct novdec jan feb ma
aprma jun jul au
sep oct nov
dec jan feb maapr
ma jun0
50,000
100,000
150,000
200,000
250,000
300,000
Bonprix
Quelle
Otto
Sapato
Wildberries
Lamoda
1
2
3
3
1
2
1
3
2
La Redoute
Yandex for e-merchants
Contextualdisplay ads
Guaranteed
Highest ranking ads
Org
anic
sea
rch
resu
lts
Yandex.Direct
Yandex.DirectThe largest service of contextual advertising placement in runet.
Key features
• Impressions for interested users
• Customised: on the positions, geo, time.
• Managed: new bid-management strategies allow you to adapt the campaign efficiently based on their tasks
• Effective: using in combination with Yandex.Metric allow you to manage advertising through conversion to achieve the goal
• Tracking: using the “TargetCall” allows you to measure all communication channels
18
Yandex.Market
19
The leading comparison shopping service
List of shops
Related products
Product accessories
SummaryProduct
description
Shops location on map
Key features for users
• Price comparison and consumer reviews on shops and thousands of products throughout Russia with its description
• Over 4,500 merchants
• Advanced recommendation engine
• Database of thousands of product models and features
• Public wish lists
• Cross shop busket
Value proposition for merchants
• Prioritizes display of offerings from shops in close proximity to users, increasing relevance to shoppers and advertisers
• Download of commodity items from the shops, automatic product categorization and identification
• Strict merchant quality control
• Yandex does not keep inventory
• Premium placement on the companies list relevant to user queries
• Additional Adv message on the card with contacts of the selected organization is shown on the map
• Extended list of placement were info is shown like search, mobile application etc.
Value proposition
Yandex.Spravochnik (GEO location)The largest catalogue of organizations and cartographic service in runet.
User Services
20
Premium positionAdv Message
Key features• Biggest cartographical service in Russia with geo-located
information• ‘Organization page’ provides users with contacts, address, website
and other detailed information• Mobile application for most popular platforms
Homepage
CardsJob
Raspisaniya
Auto
Money
Market
Maps and traffic
Dictionaries
Video
Music
Games
Services
AfishaPhotos
WeatherTV
NewsYounger Older
Men
Women
21
Yandex sociodemographic targeting
22
Yandex sociodemographic targeting
Key features
• Selected trusted user profile with defined sociodemographic and behavioral patterns
• Applied MatrixNet technologies algorithm to
– Defining factors which are common for all users of a group (for each sociademographic group)
– Evaluation of importance of these factors
• Results extrapolation to all Yandex users, 100% of audience is covered
• If the data is contradictory or not full and the system can not define users’ sociodemographic group ads are not shown to them
A simple example…We had:
oAdvertiser: clothes manufacturer
oProject: MailoTarget audience: women
We got:oTarget audience coverage +66%o CTR +73%
Preston CareyDirector, Business Development
[email protected]+1 857.288.8762@prestoncarey
Thank You!