Page 9 - bne_Tech_10_2018

Leaders
October 2018 www.intellinews.com I Page 9
Russian Post plans to boost e-commerce infrastructure
Russian Post (Pochta Rossii) will open 38 logis- tics centres in autumn worth RUB24bn ($1.7bn), the head of the company Nikolay Podguzov an- nounced at the Eastern Economic Forum, as cited by Vedomosti daily on September 11.
The infrastructure will be introduced in 34 Rus- sian cities, which could enable deliveries of orders within two days for 80% of Russian population, boosting the e-commerce potential in the country. Russian Post also plans to open express deliv-
ery channels from China, speeding up deliveries from two-three weeks to one week, and in 18-24 months to up to three days.
Russian Post’s transformation from loss-making Soviet-era dinosaur to profitable company in the last few years has been remarkable. In 2012 the company was asking the state for large subsidies to build new logistic centres, but in the last few years the company has benefited from the boom in e-commerce, which is growing ten-times faster than the real economy and can now fund its mod- ernisation from its own funds.
Russia's digital economy is booming, with the largest players developing ambitious marketplace and eco-systems projects, such as the joint ven- ture between Sberbank and Yandex.Market, and another possible alliance of Chinese Alibaba with Russia's second-largest bank VTB Bank. All these
projects are increasingly relying on Russian Post for their logistical infrastructure.
Notably, VTB Bank is affiliated with the Russian Post through joint ownership of the Postal Bank. Analysts previously suggested that the joint venture with VTB could help the Chinese company to potentially dodge the levy on cross-border e-commerce prepared by Russian government and allow Alibaba to benefit from Post of Russia infrastructure.
In 2017 the turnover of Russia's e-commerce reached RUB1.04 trillion ($18bn), growing by 13% year-on-year, according to the data by the Association of Internet Trade Companies (AKIT). The market is expected to reach RUB1.25 trillion in 2018.
While the e-commerce volume has topped the trillion ruble mark, growth rates this year have not lived up to expectations and slowed almost two-fold as compared to 2016. Other studies put the growth of the market at 26% in 2017.
Russian e-commerce is dominated by cross-bor- der trade, which beat the 13% market growth and expanded by 24% in 2017, while domestic online shopping lagged behind with 8% growth. In mone- tary terms Russians e-shopped the most in China (53%), the EU (22%), and US (12%).