Ecommerce has finally evolved in Russia. But to untap this market, your digital marketing must cater to peculiarities of challenging consumers. Read on!
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Has the Russian market been a rather white spot on your map of success? There are ways to change that – which surely is a promising venture: Though Russia alone already has an impressive population of 144,5 million, marketing in Russian has the power to get you even much further:
Russian is the official language in 11 countries, and recognised in many more. It’s spoken in many countries in Eastern Europe and Central Asia, from Belarus and Ukraine to Kazakhstan and Kyrgyzstan. Over 258 million people are estimated to speak Russian around the world.
Russian is the key to an enormous online population
Russia is the world’s 6th largest economy, and more than 116 million people use the internet in Russian (as of 2020). It’s the most used website language in the former CIS (Commonwealth of Independent States) countries, covering 79% in the Ukraine, 86.9% in Belarus, 84% in Kazakhstan, 79.6% in Uzbekistan, 75.9% in Kyrgyzstan, and 81.8% in Tajikistan. This surely contributes to the fact that Russian is the primary language of 91% of websites ranked on Yandex.
And the internet usage is not a sporadic thing among Russians: 85% of their online population access the web daily, to spend an average of 6 hours and 29 minutes on the internet – often on the go: 64% of Russians users accesss the web on a mobile device.
Know the right channels to reach your Russian speaking audience
If you want to succeed in Russia, your toolbox must be equipped differently. It should definitely include:
Yandex is the no. 1 search engine here. In other words: To increase your organic rankings and online sales in Russia, you need to do SEO for Yandex, not Google.
2. VKontakte (VK):
VK is a social media platform, used by 83% of the Russian social media users. It’s also the 14th most visited website in the world. If you want to harness the power of social, VK is the place to be here.
3. Odnoklassniki (OK):
The second most popular social media platform in the Russian market is OK. It boasts 45 million unique visitors a day. Advertising here is highly lucrative. It works on a CPC model, not CPM.
Nevertheless, if you have video content to promote your goods and services, Youtube is not to be missed out – its usage is even more widespread than Vkontakte: 87% of Russians social media users also implement Youtube in their online life. Among the other channels known from Western countries, Whatsapp and Instagram are the most powerful, with a share among online users of 69%, for Whatsapp, and 56% respectively, in the case of Instagram.
How to do it right in Russia
- Combine your online strategy with traditional media. 79% of over 45s and 88% of over 65s can be reached by traditional advertising every day. Especially if your demographic doesn't exclude 45+, make sure you also make the most of TV, radio, and billboard advertising in Russia.
- Cater to practical buyers. As many Russians have less disposable income than the majority of Western European populations, 25% of new product purchases are associated to immediate needs. Chances are that the more practical your product, the more successful it will be.
- Don’t worry about being based abroad. Foreign products are highly popular! 49% of the Russian consumers even prefer foreign products over national ones, because they associate them with higher quality.
- Russify your products. Russians do like foreign products. But they love them to be adapted to their taste and needs! Brands that modify their products and services to peculiarities of the Russian market are the most successful ones in the long run.
- Calculate it in: price pressure is real here. Russians like a bargain, and 57% of Russians visit several outlets, just to make sure they purchase the best deal. It’s a market where you need to keep your goods affordable. Many big brands even start off by selling their product or service extremely cheap, or by even offering samples for free, to hook consumers at the beginning.
- Don’t underestimate the power of tradition. The majority of Russians don’t like to go against the status quo; if your product is really outside the box, it may not take off. Certain advertising trends that are hot in the Western world might even not work in Russia’s rather traditional society.
- Engage in Sponsorship. Many big brands successfully use sponsorship as a marketing channel in Russia, e.g. sponsoring ice hockey games.
- Be prepared for different regulations. Make sure that you respect local advertising regulations, such as the ban of tobacco and alcohol advertising.
- Use PR parties as a workaround. If you can’t directly advertise your products due to regulations such as mentioned above, big lavish parties are a popular workaround – “advertising” the products through spectacular pictures of the event, published through (traditional and social) media coverage.
- Get help from someone who understands the Russian market. Partners with locally rooted experts have the insights to develop the right strategy for Russian speaking markets. We're just a click or a call away.
Nearing post-pandemic times, the Russian market shows an even sharper split than before, between a majority that needs to remain very price sensitive and a minority that shows even more appetite for pricey luxury than before. In other words, you should consider your potential for growth here if you either cater to essential and standard goods – or to the other extreme, the high-end luxury segment. The latter continues to present a will to spend that can't be ignored, especially for international brands.
Another reason why the Russian market is easier to be accessed either with essential or with luxury goods is the country's tax policy: Foreign goods that cost up to 200 euros are tax free, whereas for any value above 200 euros, the Russian consumer needs to pay 15% taxes. For an overall price sensitive market such as the Russian one, this needs to be counted in for any sector, but obviously presents more of a challenge for middle class incomes than for luxury target groups.
Ecommerce and luxury in Russia play by different rules
In general, the Russian consumers have started to catch up with ecommerce usage only lately, but the pandemic situation that emerged in 2020 worked as an important accelerator here. Nevertheless, they ask for some extra care, to be seduced to the world of ecommerce – and literally still prefer to get their hands on a product before purchasing it. Successful platforms like Tsum, the chain of luxury department stores in Russia that now also dominates the national luxury sector virtually, set standards by transferring the luxury services from the physical stores to the online sphere. This goes as far as having the company's delivery service waiting at the doorstep, for the clients to try on the new couture and decide whether they want to keep it or not – paying only afterwards, for the goods actually purchased.
To enter the Russian market, it does make sense to be present on such a platform first. When it comes to Tsum, even more so as it benefits from the trust and preference for their physical department stores. The two alternatives with the biggest market shares, especially for businesses less focused on the luxury segment, are Wildberries, Russia's biggest online retailer, and the dedicated cross-border platform Ozon.
Wildberries is currently expanding to more countries, including Germany and the US. It has established itself as "the Russian Amazon"; Statista notes that in 2020, roughly every third Russian has made a purchase on the platform. The second biggest player, Ozon, has established itself as a strong service provider for foreign companies who want to enter the Russian market.
When in Russia, do (business) as the Russians do
As margins tend to be rather small when dealing with Russian consumers, you may be tempted to export your business directly to the country, to avoid giving a share to the platform owners. This would hardly be a smart first move, for different reasons: For one, logistics can easily be described as a nightmare in Russia, and you can hardly overestimate the value of an experienced and trustworthy partner who has established his own delivery system. Secondly, peculiarities of the Russian market, such as the resistance to prepayments and excessive service demands, require a lot of resources, know-how and networks. And: language is an even higher barrier here than elsewhere! Not only is the knowledge of English not as widespread as in other countries, which makes proper translation an absolute necessity, but also cultural differences are easily overlooked and underestimated. You need to know exactly which demographic group you're addressing! They can call for a more or less traditional approach, generally appreciating Russian contextualization, they can appreciate or depreciate a Western attitude ... with different values and taboos.
With the right localization partners by your side, you'll be able to tackle these challenges, but going all in with your own stores should only be the second step. The platforms will help you to enter the market smoothly and reach a curious audience. As per PWC, around 52% of Russian customers report to be influenced by social media in their purchase decisions (referring to clothing and footwear in particular). This is a strong indicator: Don't ignore social media in Russia, even when starting out on a retailer's platform. If you do it right, well localized to your Russian audience, this will give you a significant competitive edge! Not many foreign companies have dedicated their social media to the Russian consumers yet, especially not on the Russian channels such as VK or OK.
This was a lot of information to digest? Don't despair! We're here to help you craft the strategy that's right for your organization, to conquer the Russian speaking markets which add value to your business. And we'll be there along the way, for all your content and localization needs. Untap new markets with unrivaled potential!
About the author
Eva Mäkler is Content Marketing Manager at Amplexor, based in Lisbon. With broad experience in Cross-Media Journalism, Eva joined Amplexor in 2020. She's a qualified Social Media-, Online- and Online Marketing Editor and Digital Media Producer, additionally certified in Inbound- and Content Marketing.