how it works and trends for 2024 in Russia

Since the emergence of the first online stores, online retail has gradually taken up an increasing share of the Russian market. In 2024, e-commerce accounts for almost 20% of retail sales in Russia. However, digital commerce is much more than just clicking a “buy” button or researching a product online before buying in a physical store.

What is digital trading?

Digital commerce refers to the process of buying and selling goods or services over the Internet. It includes online shopping, electronic payments, online banking, digital ticketing, and online booking services.

Digital Commerce vs. E-Commerce

E-commerce is the sale of goods and services over the Internet, usually through a website created specifically for such transactions: the buyer purchases the goods on the website, and the website arranges for their delivery. E-commerce is only one step in the purchasing process, and therefore only one part of digital commerce.

Digital commerce includes all the processes and technologies that help move a customer through the marketing funnel – from acquisition to retention.

Think about SEO optimization that helps your site rank high in Yandex, targeted advertising that shows products to users after they've visited your site (and left), payment services and logistics that allow you to deliver products from the warehouse to the customer's door faster and more efficiently.

Modern digital commerce is focused on the future of e-commerce – the world of augmented reality (AR), artificial intelligence, virtual assistants and much more.

How does digital trading work?

Digital commerce begins from the moment a customer first comes into contact with a brand or product online. They may see an ad in a social media feed, a brand name in Yandex search results, or a product on an aggregator site.

Let's imagine that a buyer makes a purchase, for example, on Wildberries. The marketplace uses a complex algorithm to show buyers an individual output for each specific product. The order in which products are displayed will be completely different for each buyer, depending on their behavior, geolocation, and a number of other variables.

Every purchase automatically serves as a source of data for marketing – analytics helps to better understand how to promote products, how to present them on the site and even how to handle customer questions.

In this sense, digital commerce is not so much about getting purchases from point A to point B, but rather about collecting and using customer data to continuously optimize the online shopping experience.

Digital commerce is rapidly developing in Russia, opening up new business opportunities. To effectively use modern technologies and e-commerce trends, it is important to gain up-to-date knowledge and practical skills.

This course covers many aspects of digital marketing that are directly related to the development of online sales and digital commerce.

Examples of digital trade in Russia

Digital commerce covers a wide range of activities in the online environment. Four examples of digital commerce in Russia:

We are talking about selling physical goods online, such as clothing, electronics or household goods. Today, it is easy to create an online store using various digital commerce platforms, such as InSales, Advantshop, 1C-Bitrix.

E-books, software, mobile apps, online courses, and digital subscriptions (e.g. to streaming services) are intangible goods. Digital products are successfully sold through platforms such as Gumroad, GetCourse, Yandex.Zen.

Companies providing services can sell their knowledge and experience online. This includes web design, graphic design, digital marketing, and consulting. Platforms such as YouDo and FL.ru help service providers find clients.

Marketplaces connect buyers and sellers of an endless variety of goods. Yandex.Market, Wildberries, Ozon – for physical goods, and CreativeCraft – for digital assets, such as website templates.

Digital Commerce Trends in Russia

Like the Internet, digital trade is constantly evolving. The main trends in the development of this industry in Russia are:

Cookies – small pieces of code that allow websites to “remember” their users and personalize content for them – have revolutionized online customer service. Today, 85% of Russian shoppers expect a personalized approach.

Digital retailers in Russia have begun to actively use augmented and virtual reality as additional touchpoints throughout the customer journey. For example, online clothing stores can use AR to create digital fitting rooms where customers can virtually try on a jacket or dress.

Inventory remains a huge expense for digital retailers, a problem that technology is working hard to solve. Very large retailers like X5 Group and M.Video-Eldorado use sophisticated IT systems to track and optimize inventory in stores across the country. This minimizes the risk of overstocking. Other players, including AliExpress Russia, are eliminating unnecessary links in the supply chain by connecting consumers directly with suppliers, eliminating the need for large warehouses.

Multichannel digital commerce has led to fragmentation of the customer experience. Integrated marketing is one possible solution to this problem: by combining marketing strategies, it is necessary to create a “holistic” digital experience that meets the expectations of buyers.

All retailers are looking to streamline operations and reduce costs. Automation in e-commerce allows you to focus on more important aspects, including scaling and improving customer service by automating routine tasks such as inventory management, marketing, and support.

Develop your digital trading strategy today

Digital commerce significantly strengthens the e-commerce business model, expanding opportunities for value creation and revenue generation.

By using technologies ranging from cookies and personalization to AR functionality, brands can provide customers with the most convenient and enjoyable shopping experience.

Features of digital trade in Russia in 2023

In recent years, digital commerce in Russia has been developing dynamically. According to a study by Data Insight, the volume of the online commerce market in Russia in 2022 grew by 39% and amounted to 4.98 trillion rubles. This growth is expected to continue in 2023.

The main trends in digital trade in Russia generally correspond to global ones:

1. Active development of mobile commerce. More than 70% of online orders in Russia are made from mobile devices. Buyers appreciate the convenience of making purchases from a smartphone.

2. Personalization. Russian online stores are actively implementing personalized recommendations, offers, and content based on an analysis of user behavior and preferences.

3. Omnichannel. Buyers expect a seamless customer experience when interacting with a brand across multiple channels – website, app, social media, messengers, etc. Integration of online and offline experiences is becoming a must.

4. Growing popularity of marketplaces. Such platforms as Wildberries, Ozon, Yandex.Market occupy an increasing share of online sales due to a wide range of products, convenience for buyers and sellers.

5. Express delivery development. Many stores offer 1-2 hour delivery in major cities to successfully compete with offline retail.

6. Implementation of new technologies – virtual fitting rooms, voice assistants, augmented reality for visualizing products.

7. The impact of import substitution. The departure of a number of foreign brands and payment systems in 2022 led to an increase in sales for Russian companies and marketplaces. Domestic e-commerce solutions (InSales, Evotor, Yandex.Kassa) strengthened their positions.

8. Legislative regulation. The adoption of a law on product labeling, tightening of requirements for cross-border trade, new rules for the operation of marketplaces – the state is actively forming a legal environment for digital trade in Russia.

9. Development of the C2C segment. Active growth of sales between individuals through ad platforms (Avito, Yula) and social networks (VKontakte, Telegram). Business is introducing services for working with the self-employed.

10. Growing number of pick-up points (PPs). The development of PPS networks (Ozon, Wildberries, PickPoint, Boxberry) makes online shopping even more convenient for Russians, especially in regions with less developed courier delivery.

11. Popularity of cash on delivery. Despite the growth in the share of online payments, many buyers in Russia still prefer to pay for orders in cash upon receipt, which requires stores to support this option.

12. Seasonality and sales. Online sales peaks in Russia occur during traditional sales periods – New Year, February 23, March 8, 11.11, Black Friday. It is important for stores to prepare for the high season in advance.

Digital commerce in Russia will continue to grow rapidly in the coming years. According to Data Insight forecasts, the country's online commerce market will reach 7.2 trillion rubles by 2024.

The key factors for development will be:

• Internet and smartphone penetration in the regions;

• the arrival of new generations of buyers (millennials, generation Z);

• development of logistics infrastructure;

• technological innovations (big data, artificial intelligence);

• government support for digitalization of trade.

Companies doing business in Russia need to adapt their strategies to the specifics and trends of the Russian e-commerce market. The universal recipe for success is a focus on customer experience, personalized service and the convenience of online shopping for users.

Examples of successful players in the field of digital trade in Russia

1. Wildberries is the largest online retailer in Russia, occupying 25% of the market. Turnover growth in 2022 is 95%. Success is based on a wide range of products (more than 10 million products), a developed network of pick-up points (about 26 thousand points), fast delivery, and easy return of goods. The company is actively introducing innovations – virtual fitting rooms, Wildberries Premium subscription, sales of goods from Russian designers, etc.

2. Ozon is a leading multi-category marketplace, with turnover growth of 80% in 2022. Key advantages include a wide selection of products (about 50 million SKUs), convenient delivery methods (courier delivery, pick-up points, parcel terminals), and the Ozon Card loyalty program. The company is developing additional services – Ozon fresh (express grocery delivery), Ozon travel, Ozon account (financial services), etc.

3. Sber Megamarket (former Goods.ru) is a large-scale marketplace from the Sber ecosystem. It integrates e-commerce services with banking and logistics services, and the SberSpasibo loyalty program. It ensures fast delivery through fulfillment based on the infrastructure of Sber and its partners.

4. Samokat is a popular express delivery service for groceries and goods in 15-30 minutes, operating in 50 cities in Russia. Delivery is carried out from its own dark stores (warehouses) using couriers. The service is known for its modern mobile application with a user-friendly interface and clearly structured communication with customers.

5. Yandex Market is a marketplace and aggregator of product offers, part of the Yandex ecosystem. Allows customers to compare prices and choose the best offers from different stores. Develops its own logistics network and Beru order pick-up points. Implements artificial intelligence technologies to personalize the delivery and recommendations of products.

These and other companies set a high level of customer service and technology in the Russian e-commerce market. Their experience can serve as a benchmark for other players in the digital trade industry.

The digital trade market in Russia continues to actively develop and transform. It is important for industry players to keep abreast of changes, quickly adapt to customer demands, and implement modern technologies and sales models. Despite all the challenges, e-commerce remains one of the most promising areas for business and investment in our country.