Changes to ecommerce in Russia – the essential update
Over the previous few weeks there has been much written in the media about the proposed legislative changes on international imports in Russia.
Russia presents sizeable opportunities for UK brands, as consumers seek out competitively priced products and fashionable Western brands that are unavailable locally. As a result international ecommerce in Russia has experienced significant growth in recent years, with the market valued at approximately $3 billion in 2013*.
With interest in the market increasing at pace, we thought it would be useful to share an update on the market developments to-date. We talked to our contacts at Yandex (the leading Russian search engine), to get a summary of the key points;
- Following a brief suspension, the major international courier companies, which include FedEx and DHL, are once again operating in Russia and delivering parcels to individuals as well as businesses.
- A new import tax has been set at 30% tax on goods worth over 200 EUR. However we understand that this has not been activated yet.
- Currently there are no restrictions on the number of parcels that an individual may receive from an international retailer. However discussions are continuing, and this position could change.
For UK brands that already operate in the region, such as ASOS, Next, and Net-a-Porter, this new legislation will have varying impact. For example, it would appear that ASOS will not be significantly affected by the new tax levy as the average purchase value tends to be lower than the 200 EUR value threshold. Retailers of luxury goods, on the other hand, could be harmed by the new measures.
Currently, the extent to which UK retailers will be affected by the restrictions is still unclear, and this is unlikely to be resolved in the immediate future. With Russia involved in an on-going politically sensitive situation, market developments may evolve further and could bring more wide ranging implications for foreign brands.
We will continue to monitor these developments and will share updates on the situation and the impact for UK brands in due course. If you would like further advice, or information on what these market developments could mean for your international campaigns and ecommerce opportunities please don’t hesitate to get in touch.
For brands interested in exploring the Russia market further, then please visit our Yandex services page or www.RussianSearchMarketing.com, which provides useful insights on Russian search and digital advertising opportunities for international brands.
*http://www.ewdn.com/2014/01/24/dhl-and-fedex-suspend-operations-boycott-of-ebay-urged-but-cross-border-sales-to-continue/