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The growing list of ‘back and forth’ economic sanctions between the West and Russia has brought into popular focus just what a key market this has become for some of the world’s largest commercial brands.

What is often lost in this conversation however, is the growth and development of the surrounding CIS (Commonwealth of Independent States) region as an online marketplace.

The region is often known for its complex geo-political relationships but in fact, these countries share a lot of cultural and linguistic patterns that are particularly visible in online search.

The CIS comprises Russia, Belarus, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan, Ukraine and Turkmenistan suffers from a common misconception that ecommerce is of little importance and still in the early stages of development.  

While it is fair to say that Russia outshines the rest of the group in terms of current ecommerce performance for retailers, the others are catching up fast, piggy-backing on Russia’s well-developed online social and search platforms.


Yandex, the most popular Russian search engine, has consistently demonstrated a deep understanding of local search preferences, while VKontakte (VK) and Odnoklassniki are key players in the region’s social space. 

The CIS has a population of 277m, with over 110m of these people active online. The largest contribution is predictably from Russia, which has an internet penetration rate of approximately 55%.

The other countries in the group have significantly lower penetration rates at around 20% to 30%, but their growth rates are considerably faster.

Ecommerce revenue from Russia alone is expected to grow from $12bn in 2014 to $72bn by 2020, driven by a burgeoning middle class. 

The top eight things to watch out for:

1. The dominant position of Yandex


Digital marketing in the whole region is characterized by a number of local platforms. Yandex is the clear leader in search marketing with 61% market share in Russia and increasing popularity in the rest of the CIS.

Between 2013 and 2014 at our agency we've seen a 20% uplift in revenue from other CIS countries on Yandex from the campaigns that we’ve been running for clients. 

2. Unique algorithms and semantic features

The primary challenge with Yandex is understanding its unique algorithms and semantic features, which are the key factors in impacting SEM performance.

One example is the high frequency of CPC fluctuations across different types of PPC positions, such as guaranteed (right column) and premium (central/main) placements, which can be difficult to anticipate and optimize for.


3. The crucial role of SEO with Yandex

While on-site content optimisation is important for SEO on Google, on Yandex it has become the most crucial factor directly affecting rankings.

Fully optimized on-site content and meta content, full integration with Yandex webmaster tools and alignment with Yandex’s specific data structuring requirements are all required to achieve optimal organic ranking. 

4. The importance of local social platforms

Users in the CIS region are heavily driven by social media, which is why this channel has become crucial to digital marketing success.

There is a strong overall preference for local platforms such as VKontakte (the second largest social media network in Europe after Facebook) or Odnoklassniki, but Facebook and Twitter are also experiencing strong growth, particularly in the large Russian cities of Moscow and St Petersburg.

Social media activities can have a strong impact on assisted sales across other digital marketing channels. In particular, PPC sometimes sees over 50% assisted revenue from this channel from the data we’ve collected.

vk logo.jpgOdnoklasniki.png

5. Delivery options and reliability

Shipping and delivery issues are a common fear for international ecommerce businesses when considering expanding to the whole CIS region.

Local and international delivery options face contrasting issues. Local services are relatively cheap, but lack reliability, whereas international delivery services are fast and reliable, but have high costs and often only ship to certain parts of the region.

The only effective solution for full regional coverage is to establish collaborations with both an international (e.g. DHL, Fedex, UPS) and local delivery service (e.g. SPSR, Pony Express, Russian Post, EMS Russian Post). 

6. The increasing impact of import tax fluctuations

Import tax is a growing concern for international online retailers. Russia is expected to introduce a 30% import duty tax for all goods with a declared value of €150 or more from international online shops, with a final decision being made by the end of 2014.

This will mark a dramatic shift from the current €1,000 boundary. The Russian Federal Customs Service and the Russian National Association of Distance Selling are claiming that 80% or more of both purchases and buyers will be unaffected due to the Russian average basket value being around €40.

The scale of implications for sellers of high value items though is unclear.

There has not been a clarification over whether the €150 level will apply per individual purchase or as a total threshold for all purchases made that month.

One strategy for retailers will be to display all inclusive prices for their products on the site. For luxury brands, even after including the extra 30% on to the final price, the cost will likely still be lower than in local offline stores for the same products. 

7. Russian currency devaluation

The Russian Ruble has seen a devaluation of around 20% between August 2013 and August 2014.

This has not impacted Russian consumers’ desire to shop online, with conversions rates remaining unaffected but it has predictably lessened overall purchasing power, with average basket values falling by a comparable amount.

In terms of overall revenue generation however, this is counteracted by the rapid growth of internet penetration and the growing number of connected consumers.   


8. Localisation

Use of the English language throughout the region remains low, standing at between 6%-8% of the total population.

This requires online retailers to prepare a full localisation strategy for marketing as well as website content. 

It is fair to say that the CIS region is not always a top priority for international retailers when expanding internationally, but this is mainly due to a misunderstanding of the challenges and factors that will impact on an expansion strategy.

Even with a devalued Russian Ruble, the scale of the online population and the rapid growth of internet penetration in the region means that the CIS offers huge commercial opportunities for brands or retailers looking to enter these markets.

The similarities in cultural, linguistic and online behaviours also means that well-structured social and search campaigns can prove particularly effective in reaching multiple markets.

For more on this topic, download Econsultancy's Russian Digital Landscape Report.  

Hannes Ben

Published 11 August, 2014 by Hannes Ben

Hannes Ben is EVP International at Forward3D and a contributor to Econsultancy. You can follow him on Google+.

5 more posts from this author

Comments (1)


David D Y Choi, job seeker as usual since 2001 at www.cdyera.wordpress.com

Dear Open minded and logical personnel in Russia and CIS region ;

Would you please let me work in live in Russia or CIS region?
I would like to offer my potential skills toward Russia and CIS region,
where logical people are residing.

During the past decade, among the joined work sites, in which participated work site number is at least 45, mostly in homeland, S Korea, I could acquire various experience.
I have been joined at many infrastructure basis business sites, as the temporary employee.
Among the participated business sites, there were conflict and war zone, such as Iraq, Congo, East-Timor, Cambodia, and Russia project related business matters were operating, even if work status was not extended from the participated business sites as usual.

Over the Russia region related projects,
I was asked to join at Zamiin-Uud related project, where its site was covering of China, Mongolia and up to Russia region. Meanwhile, given role of duty was focusing on finding of a reliable investor or business partner. Also, I was asked to join at Ванино warehouse project, next to seaside, Хабаровск region.
Through the given duty period, allowed days were within a week or so, I had to find of a reliable project toward investor or business partner, only on given planning papers.
Mostly, given status was not secure to be extended as the temporary hired personnel.
I received work termination notices from the pre-joined work sites.

This makes me have more experience since 2001, from the infrastructure related business up to huge project affairs including of conflict zone and war zones etc.
Considering of my past- harsh work experience,
I may do the key role toward the fast paced step of economic growing society in Russia.

I am not willing to ask you of guaranteed employment status.
During the fixed term of work opportunity such as 6 months or so, your side may have confirmed opinion over my newly joining fixed period in there as an employee.

I am ready to offer my sincere contribution toward Russia region with full efforts.
I need your side support to work and live firstly.

(David) Don Young Choi
e-mail : duly@gmx.com
Phone : +82-19-378-4105

Уважаемые открытыми и логические персонала в России и СНГ регионе;

Не могли бы вы, пожалуйста, дайте мне работать в прямом эфире в России или СНГ регионе?
Я хотел бы предложить своим потенциальным навыки по отношению к России и стран СНГ регионе,
где логические люди проживают.

В течение последнего десятилетия, среди присоединившихся рабочих мест, в котором приняли участие ряд рабочим местом, по крайней мере 45, в основном на родине, Южной Корее, я мог бы приобрести различные опыт.
Я присоединился во многих инфраструктурной основы бизнес-сайтов, в качестве временной работника.
Среди участвовавших бизнес-сайтов, там были конфликты и войны зона, таких как Ирак, Конго, Восточный Тимор, Камбоджа и связанные с реализацией Проекта Россия деловых вопросов действовали, даже если состояние работы не был продлен из участвовавших бизнес-сайтов, как обычно.

За Россией область проектов, связанных с,
Мне было предложено присоединиться в Замын-Ууд связанные с реализацией Проекта, где его место был охватывающей Китая, Монголии и до региона России. Между тем, учитывая роль долга была сосредоточена на поиске надежного инвестора или делового партнера. Кроме того, мне было предложено присоединиться в Ванино складской проект, рядом с Приморским, Хабаровск регионе.
Через данном месте периода, позволили дни были в течение недели или около того, я должен был найти надежного проекта к инвестору или деловому партнеру, только на данных бумаг планирования.
Главным образом, данный статус не был в безопасности, чтобы быть расширен временных наемных работников.
Я получил окончания работы уведомления от предварительно присоединился рабочих местах.

Это заставляет меня больше опыта с 2001 года, от инфраструктуры бизнеса, связанного вплоть до огромных дел проекта, включая зоны конфликта и военных зонах и т.п.
Учитывая моей past- суровым опытом работы,
Я могу сделать ключевую роль по отношению к быстро развивающейся стадии экономического растущего общества в России.

Я не хочу вас спросить гарантированного статуса занятости.
В течение определенного срока работы возможность такого как 6 месяцев или около того, ваша сторона, возможно, подтвердил мнение по моей недавно присоединение определенный период времени в там в качестве работника.

Я готов предложить свою искреннюю вклад в региона России с полными усилий.
Мне нужна ваша боковой поддержкой, чтобы жить и работать, во-первых.

(David) Дон Янг Чой
адрес электронной почты: duly@gmx.com
Телефон: + 82-19-378-4105


almost 2 years ago

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