Classified advertising website Avito launches e-commerce function to grab a share of Russia's 200 billion yuan e-commerce market

Founded in 2007, Avito is the most popular classifieds website in Russia . It is a platform that displays advertisements for goods, jobs, rentals, cars, pets, etc. The platform only provides display, and all transactions are completed by buyers and sellers through other channels.

In this test, Avito will accept sellers to register and charge them commissions. Avito plans to become a leading player in the Russian e-commerce market within three to five years. However, some experts said that if Avito wants to compete with Wildberries, Ozon and others, it will need greater investment and efforts .

According to INFOLine Analytics data, the overall size of Russia's e-commerce market in 2020 was approximately 2.7 trillion rubles (approximately 237.1 billion yuan). In terms of online sales, Wildberries, Ozon and DNS accounted for 21.3% of the market share in the first half of 2020.

Currently, Avito has started testing its e-commerce function, and about 200 sellers have been testing sales on the platform. Avito plans to expand this scale by the end of this year. According to Mediascope data, Avito had 40.4 million users in Russia in November 2020. This huge user base will be beneficial to the development of its e-commerce function.

After launching the e-commerce function, Avito will continue to maintain its original classified advertising model , as user-placed and promoted advertisements are the company's main source of revenue.

Regarding the reason for launching the e-commerce function, Avito General Manager Alexey Kurakin explained that due to the impact of the epidemic, many Avito users have flowed to other e-commerce platforms, and the main purpose of launching the e-commerce function is to retain users . Secondly, Avito hopes that the e-commerce function can increase the company's revenue and business value.

Launching e-commerce functions has been a major "favorite" of Russian Internet companies since last year. At the end of last year, Yandex.Market, a price comparison shopping platform under Russian Internet giant Yandex, launched an e-commerce function. In January, it said that it would give priority to displaying product information of sellers who have settled in the platform, which once caused resistance from users.

Experts are not optimistic about Avito 's move. INFOLine Analytics believes that Avito is a little late to enter the e-commerce field. In addition, other e-commerce platforms have the ability to subsidize logistics, while Avito lacks such resources. At the same time, Avito will face another big challenge - how to establish and maintain relationships with large sellers.

In the short term, it will be difficult for Avito to gain a share of the Russian e-commerce market. For now, Avito should focus on the existing problems and consider how to solve them.

Russia

Avito

E-commerce