E-Commerce

Russia’s fragmented e-tailing market is poised for rapid growth—and consolidation

- Ilya Khrennikov

In most countries, e-commerce is dominated by one or two behemoths, such as Amazon in the U.S. and Britain, Alibaba in China, and MercadoLibre in Brazil. In Russia, where the largest web store has less than 7 percent of the market, at least a half-dozen companies are in the running to become the king of online shopping.

That’s set to change as the country’s e-tailers gear up to spend more than $1 billion on their websites, warehouses, and delivery services. Those investments, starting next year, will help boost e-commerce in Russia to $52 billion by 2023, from $19 billion in 2018, Morgan Stanley forecasts, spurring a wave of consolidation likely to leave just a handful of major players. “It’s been a breakthrough year for Russian e-commerce,” says Sergey Libin, an analyst at Raiffeisenbank AO in Moscow. “Local internet giants are forming alliances with other heavyweights to conquer the market.”