With more than 60m internet users, Russia is the biggest internet market in Europe as well as one of the fastest growing. Mobile devices are massive, but the smartphone – and the online connectivity it affords – is yet to become as much a major player as it is soon likely to be.
Online, Russians are social zealots. Consequently, the Social Media market thrives with domestic successes such as VKontakte and Odnoklassniki, while US imports such as Twitter, Facebook and LiveJournal also prove popular.
In economic terms, the country has been comparatively resilient in light of the Eurozone’s tumultuous climate in recent years. Russia also boasts an impressively low unemployment rate (5.2% in March 2013) and a public debt of less than 10% of its GDP.
But there is much to watch out for…
For many outside of the country, the Russian digital landscape is at once familiar and altogether quite different. It is an arena where brazen imitation and skilled innovation collides, with Facebook, Amazon, Groupon and Pinterest all boasting Cyrillic lookalikes.
In the ecommerce sector, many consumers are sceptical about whether they will even receive the products they order, and if they do that they will be of the quality promised by the store.
Consequently, a diverse range of payment options – from Cash-on-delivery, to mobile payments – is emerging to give customers more options and better piece-of-mind. And the ecommerce market is due some significant growth.
Additionally, Russia’s reputation for heavy state involvement in business, as well as past corruption and the thriving black market is something that can’t help be noticed by those interested in the country.
Yet, it seems the Russian government and the private sector are keen to change the dated notion that the market is unfriendly to innovation and start-ups, with a number of initiatives working to help new businesses.
A unique market
The Russian digital landscape is as complex as it is exciting. Its vast number of internet users and social media fans together with its massive domestic names such as Yandex and VKontakte make it seem as advanced as its European neighbours.
While the comparatively slow growth of ecommerce and smartphones in the region aligns it more closely to its BRIC peers.
As the country turns a corner in its digital history, it will be interesting to see whether its pros outweigh its cons to those who are considering approaching the market and what it has to offer.