Page 106 - Russia OUTLOOK 2023

as cited by the Russian state-owned newswire.

The top five positions in the rating of goods purchased online comprise
electronics and household appliances (22% of the total online commerce
volume), followed by furniture and home goods (17.7%), apparel and footwear
(13.9%), foods (13.5%) and beauty and wellness products (7.5%).

Following the imposition of sanctions and the voluntary withdrawal of hundreds
of international brands, Russians have turned to the e-commerce sites to buy
now hard-to-find foreign brands. The leading sites, including Wildberries and
Ozon, have been setting up parallel imports, sourcing goods from
non-participating countries like Turkey to provide their customers with the
international brands.

The volume of online piracy in Russia may grow significantly in the near
future, the press service of the RAEC told TASS, citing forecasts for the
development of the Internet economy in Russia for 2023. Experts interviewed
by TASS believe that piracy volumes could double and reach $60mn. The
press service clarified that the Anti-Piracy Memorandum signed between major
search engines and copyright holders of video and audio content, which was
extended in 2022, can protect it. However, the memorandum does not cover,
for example, games or e-books.

Representatives from the state may appear on the boards of directors of
Russian IT companies. The mechanism for controlling Internet companies
was proposed by the Centre for Strategic Research in December.

State representatives on the boards of directors, according to the authors of
the initiative, are needed to control foreign investments in IT companies and
"significant corporate actions" in order to protect the IT sector from foreign
influence. Experts call the idea “the lesser of evils” compared to the bills of
Deputy Gorelkin, who proposed limiting the share of foreigners in news
aggregators, online cinemas and classifieds.

The state has already effectively taken over Yandex, Russia’s largest IT
company. It was split into two in December and former finance Minister Alexey
Kudrin was appointed to run the Russian part of the company, while the
founders took control of the international part of the business. Yandex had
already agreed to give the state a “golden” share well before the war started,
which gave the Kremlin a veto on its decisions.

This mechanism was developed as an alternative to the draft laws of Deputy
Anton Gorelkin, who proposed limiting the share of foreign capital to 20% in
news aggregators, online cinemas and classifieds. According to the CSR,
limiting the share of foreigners in the IT sector does not correspond to its
“special nature”. The measures proposed by the centre, on the contrary,
according to the authors of the report, will allow "preserving the investment

106 Russia OUTLOOK 2022 www.intellinews.com