Russia's e-commerce retail share will double, and demand for these categories will rebound

Recently, Denis Manturov, Minister of Industry and Trade of the Russian Federation, said that e-commerce retail in Russia currently accounts for 8% of total retail sales, and he expects this proportion to nearly double to 15% in the next few years.

Last year's epidemic gave a boost to the growth of Russian e-commerce. What will happen this year? Denis said that after Russian consumers experienced online shopping last year, this trend will continue this year. However, the growth of Russian e-commerce in 2021 will slow down compared with 2020.

However, the positive impact of the epidemic on e-commerce is obvious. According to a recent report by Russia's Kommersant, in December 2020, the sales of large and medium-sized Russian companies through the Internet increased by 1.7 times compared with the same period in 2019.

This data shows that e-commerce platforms have become an important sales channel for corporate sellers. Data shows that the Russian e-commerce platform Wildberries' turnover reached 437.2 billion rubles in 2020. The number of sellers on the platform has increased several times, from 19,000 to 91,000, and exceeded the 100,000 mark in January this year.

Although the e-commerce market is growing, the situation in Russia's retail market is not satisfactory. According to data from the Russian State Statistics Service, by the end of 2020, Russia's retail turnover had declined for the first time after three consecutive years of growth, falling by about 4.1% to about 33.555 trillion rubles.

In addition, the biggest decline occurred in April last year, when Russia's retail sales plummeted by 22.6% due to the implementation of the epidemic prevention and control blockade. The Russian Ministry of Economic Development predicted in September last year that the Russian retail market will gradually recover in 2021, with an expected recovery of 5.1%.

Denis also believes that Russia's overall retail market (including the non-food retail market most affected by the epidemic, such as clothing, books, beauty products, electronic products, etc.) will rebound and continue to rise before the end of 2021. He said: "From the current market situation, various data indicators show that it has recovered quite rapidly. We believe that the retail market as a whole will be profitable this year."

Data shows that in 2020, Russia's food (including beverages and tobacco products) retail sales fell by about 2.6% to 16 trillion 403.4 billion rubles. Non-food retail sales fell by 5.2% to 17 trillion 151.6 billion rubles. This is due to the decline in consumer economic conditions and lockdown restrictions under the epidemic, which has reduced people's spending on non-essential goods. This situation is not only happening in Russia, but also in other countries.

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