A recent survey of online buyers in Russia indicates that the Russian online shopping growth is being curbed by poor infrastructure and slow delivery times. As a result, it forces retailers to spend more before they reap any benefit of rising Internet use.
According to a report in Reuters (News 
- Alert), Russia overtook Germany as Europe's biggest Internet market in September with about 60 million users. Despite being Europe’s biggest Internet market, the penetration rate is around 43 percent, which means e-commerce is still at an early stage of development, wrote Reuters reporter Maria Kiselyova.
The Reuters report is based on a PwC survey of 2,000 Russian online users. The survey found that 92 percent of the users shop at least occasionally on the web, up from 80 percent in 2009. However, only 12 percent do it every week compared to 28 percent in Britain.
Vardan Gasparyan, senior manager at PwC Russia, told Kiselyova, "If we compare the pace of Internet penetration in the Russian provinces with that of online retail, we will see a very significant lag, and logistics is one of the main reasons."
Gasparyan added, “As rail is by far the most common means of transporting goods, consumers often have to wait a week before they get their order, which makes online shopping a less attractive option than visiting a mall.”
Because lack of modern infrastructure is a major constraint in Russia, traditional retailers, such as food chain X5 and electronics specialist M.video, have created a physical presence in the provinces by developing their own logistics and warehouse infrastructure, wrote Kiselyova.
Hence, to catch-up, pure-play online retailers will have to invest in their own infrastructure, according to market watchers.
Two other problems identified by experts include relatively low use of credit cards in Russia and a general mistrust of the Internet.
Respondents to the PwC survey indicated that popular online shopping products were household appliances, books, mobile phones and computers. However, online deals for clothes and footwear, video and audio products, online travel and entertainment bookings were also growing in Russia, wrote Kiselyova.
Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.Edited by
Rich Steeves 
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