Russia's "Amazon", a new way out for Chinese cross-border sellers

Recently, everyone must have heard about the Russian e-commerce platform Ozon. Why is Ozon so popular in Russia recently?

Due to the rapid development in the past few years, the North American market is becoming inward-looking, and a large number of sellers are beginning to target emerging markets such as Latin America and Southeast Asia.

But many sellers overlook one particular emerging market: Russia .

In the past few years, Russian e-commerce has also shown a trend of rapid development. After the Russia-Ukraine conflict, the online and offline retail environment has undergone earth-shaking changes. It is in this environment that Ozon, Russia's top-ranked comprehensive e-commerce platform, announced its entry into China and is about to start attracting investment from Chinese sellers. We also took this opportunity to explore e-commerce opportunities in Russia.

I think that on the one hand, due to the Russia-Ukraine war, many merchants on cross-border platforms have withdrawn from the Russian market, and now the market competition pressure in Russia is relatively small.

In addition, China and Russia have always been in a cooperative relationship. Russian e-commerce companies are taking advantage of the situation to seize the Chinese market at this time. This was premeditated and by no means accidental.

With the development of the current international situation, such as the situation of the Russia-Ukraine war, Russian e-commerce has become very popular. The Russian e-commerce platform has only now really entered the eyes of Chinese sellers, especially the OZON platform. It is now at the cusp of the storm, and its growth will certainly be very rapid, which is the general trend.

Previously, OZON had always intended to attract investment in the Chinese market, but it had no effect. It was not until 2021 that the OZON platform really gained some popularity in China and attracted Chinese sellers to settle in.

To be precise, OZON is still in its bonus period, and foreign media organizations have analyzed that the GMV of the OZON platform will maintain an upward trend in the next three years.

Since the Russian e-commerce platform OZON officially started large-scale investment promotion in China in 2021, it has been well received. Whether it is the platform's traffic collection or order conversion, overall it is very good.

So, why has OZON developed so well? First of all, we have to talk about the advantages of the OZON platform.

OZON has more than 16 million active users and an average daily order volume of 370,000, and is known as the Amazon of Russia.

OZON is a comprehensive e-commerce platform with a full range of categories. Compared with other Russian e-commerce platforms such as WILDBERRIES and CNTNANHK, it has richer sales categories, covering books, electronics, clothing, household, children, beauty, food, pets, sports and other commodity categories, giving sellers more choices, better market prospects and higher potential.

Like many countries, Russia's e-commerce market is currently highly competitive. The top five e-commerce companies are WILDBERRIES, OZON, YANDEX, AliExpress Russia, and SBERMARKET. These five e-commerce platforms account for 62% of Russia's online retail volume.

Among them, the top two, WILDBERRIES (24% market share) and OZON (18% market share), together account for 42% of the entire Russian e-commerce market. Although their market shares are comparable, WILDBERRIES and OZON have different positioning. WILDBERRIES is mainly famous for its non-standard fast fashion clothing, while OZON is the most mature full-category B2C e-commerce platform in Russia, with more than 150 million SKUs covering 30 categories, among which the most popular categories are 3C, small appliances, clothing, building materials, etc.

The biggest fear of cross-border e-commerce is platform instability. Once the platform collapses, runs away, or frequently closes stores, the seller’s previous investment will be wasted.

The key to OZON taking over our current vacancies is stability. The store will be stable and will not be closed without any reason . Products that can be listed on the platform will be sold. There are not so many cumbersome entry conditions and they are relatively lenient. For products that cannot be listed, we will be quickly informed of the reasons for the rejection.

OZON has a very high spontaneous brand awareness in the Russian e-commerce sector. It enjoys a high reputation among Russian consumers because it sells a wide range of products, is easy to use, and has simple search and ordering operations.

Russians usually use "universal", "comfortable" and "reliable" to describe OZON.

Today, Russia is one of the emerging e-commerce markets in the global e-commerce landscape. Russia's e-commerce has grown rapidly in recent years. Since 2018, the annual growth rate of Russian e-commerce has remained above 20%, making it the fastest growing e-commerce country in Europe .

As the most populous country in Europe, Russia has a huge consumer population. At the same time, Russia's retail scale is also large, second only to the UK, Germany, France and Italy in 2021. Russia's e-commerce scale in 2021 is 4.1 trillion rubles, ranking ninth in the global e-commerce market. Russia's e-commerce penetration rate is 10.4%, which is in the lower echelon among countries in the world, and there is still huge room for growth.

I think there are many reasons for maintaining such rapid growth. First, thanks to the construction of local logistics infrastructure in Russia , consumers receive packages in shorter and shorter time, and after-sales service is getting better and better. Second, with the development of e-commerce and the abundance of sellers, the entire online supply is increasing . Third, Russian consumers are also constantly developing online shopping habits.

Moreover, this year, the development of Russian e-commerce has also been affected by some special factors. Specifically, the biggest impact is the Russian-Ukrainian conflict. This topic cannot be avoided. The impact of war on a country is multifaceted. Affected by the Russian-Ukrainian conflict, Russian consumers' purchasing demand has surged, and there was a phenomenon of hoarding supplies in the first quarter . According to statistics from industry personnel, Russia's growth this year will set a new record, and the year-on-year growth may be close to 50%. It is expected that by the end of the year, the scale of Russia's e-commerce market will exceed US$70 billion. By 2024, the scale of Russia's e-commerce is expected to exceed US$100 billion.

And there is a special situation this year, that is, a large number of offline stores of international brands have withdrawn from Russia, leaving a huge demand vacuum.

In addition, as the economy changes, Russians are becoming more and more sensitive to consumer prices, and the price advantage of online products has successfully attracted many consumers.

The first is the business license, which can be in Chinese or English.

The next step is to prepare an international payment account. Generally, Wanlihui, Pingpong account, or Lianlian Pay are acceptable.

The OZON platform settles payments twice a month based on orders that the seller has signed for. The settlement threshold is $1,000, which means that payment can be made once the accumulated amount reaches $1,000.

Since OZON currently makes payments manually, the workload is relatively large, so the settlement threshold is set. This threshold will probably no longer exist in the future.

Moreover, products collected and claimed from more than 100 websites such as 1688, Taobao, Tmall, AliExpress, eBay, Amazon, wish, etc. can be published to OZON store!!!

OZON attaches great importance to Chinese sellers, and this year is a very good time to join the platform. First of all, the launch of a large number of brands in Russia has left a huge demand vacuum. The entry of Chinese brands can quickly seize the minds of users, and this user mind will become more solid as time changes. Many brands are expected to take root in Russia for a long time .

In addition, compared with the OZON platform's more than 50 million monthly active users and the current 150,000 sellers on the platform, the platform is not crowded. This gives many sellers the opportunity to explore this emerging market. The platform still has huge traffic space to tap, and the overall competition is not very fierce.

As Russia's most comprehensive B2C e-commerce platform with more than 30 categories, OZON sells everything from 3C, home appliances to beauty and personal care, even fresh food and air tickets. For many domestic businesses, the entry of such a comprehensive e-commerce platform into the Chinese market to attract investment may be a good opportunity to enter the Russian market.