What Opportunities Await in the Russian Market?

If your business has aspirations to expand into new international markets, it’s important to do your research and plan carefully to feel confident the destinations you’re entering are the right fit for your company.

Some markets might seem more accessible than others, but there could also be great potential for growth in countries that are less obvious candidates for overseas expansion. Russia, for example, is home to a huge internet population and a growing ecommerce industry.

Traditionally, Russia may have been somewhat overlooked as a possible market for business expansion, but this isn’t the case anymore. On June 6th, the country could experience a further boost in its profile on the global stage as the world marks Russian Language Day.

What Is Russian Language Day?

Russian Language Day is one of six annual events that celebrate the official languages of the United Nations: Russian, English, Spanish, French, Arabic and Chinese.

It takes place every year on June 6th, the birthday of Russian poet, playwright and novelist Alexander Pushkin, who is famed for his contribution to the country’s linguistic and literary heritage.

There will be various events held to raise awareness of the history, culture and development of the Russian language, including cultural celebrations, exhibitions and performances.

For businesses eyeing potential expansion opportunities in Russia, respecting the language and having the expertise to use it to the greatest effect could prove crucial to success.

Expanding a Business into Russia

Russia has experienced great change over the past few decades, most notably the dissolution of the Soviet Union in 1991. This has been highlighted as a key turning point for the country’s business environment, with corporate leadership now transitioning from people raised in the Soviet era to those who have only known post-Soviet Russia.

This has supported a trend of greater openness and more progressive attitudes in the country. While doing business in Russia still poses some unique challenges, foreign companies have more opportunities than ever before to build a presence there.

In a blog for Digital Commerce 360, Katerina Mikheeva, head of business development at electronic payments service Yandex.Money, said it’s very common for Western and global businesses to view Russia as “a non-priority and third-tier market”. Many international organisations believe the country is hampered by economic sanctions, burdensome legislation and an underdeveloped corporate culture.

However, brands such as Lego, Uber and Skyscanner have shown it’s possible to achieve great success in Russia, while China’s ecommerce giant Alibaba has also taken steps to expand its presence in the country.

Any international brand planning a Russian expansion must first build up a strong understanding of the market. This will help you plan your investment and build a strategy for the creation and localisation of marketing content to achieve maximum ROI.

A Booming Ecommerce Sector

Some of the most exciting opportunities in Russia right now can be found in the ecommerce sector, which has witnessed strong growth and is set to continue developing in the years to come.

According to Morgan Stanley research published in October last year, Russian ecommerce was worth €13.7 billion (£12 billion) in 2017 and has the potential to grow to a value of almost €46 billion by 2023. The report said the country is the last major emerging market without a dominant online retailer.

The industry benefits from high internet and smartphone penetration rates – 80 per cent and 66 per cent respectively. Russia is home to more than 109 million internet users, the highest of any other country in Europe.

Furthermore, the country’s citizens are becoming increasingly open to purchasing products from foreign retailers. A report published by Data Insight and PayPal showed that the proportion of online shoppers buying from both Russian and international brands was “soaring”, going from 12 per cent to 19 per cent in 2018.

It’s clear that business trends in Russia are moving in the right direction, as far as international brands are concerned, and there are clearly opportunities waiting to be seized in the ecommerce sector.

With thorough research, a strong understanding of the market and expert support in areas such as multilingual SEO and social media marketing, your business could be well-placed to realise the potential of this huge market.

To find out more about how Locaria can help your overseas expansion efforts, call us on +44 (0)20 3948 6800, or request a quote online.