Page 97 - RusRPTApr19

Morgan Stanley expecting RUB3.5 trillion market by 2024, RBC reminds. Gaidar's study notes of rising rates of internet penetration in Russia to about 70%, but notes that in the past three years the share of those involved in e- commerce plateaued at 35-43% of the population or 41mn-51mn people. The further growth of the e-commerce market is seen mostly fuelled by the growth of an average receipt and purchase frequency. Currently average Russian internet shopper is most likely to buy food online (8.4 times a year on average), followed by children’s' goods (4.6 times), and household appliances (1.5 times) and mobile devices/accessories (1.4 times). Last month the East-West Digital News (EWDN) has published 10 key takeaways regarding the current state of Internet usage in Russia, according to which internet penetration stands at 76%. There are currently 109.6mn Internet users in Russia. The vast majority of them (75%) live in urban areas, where there are more opportunities to engage in e-commerce.
US Internet shopping site eBay expects the volume of online exports of Russian goods to reach US $10bn over three to seven years, Ilya Kretov, general manager at eBay in Russia and Emerging Europe, said on March 28. The market was valued at $430mn in 2016 with only 0.3% of Russian small and medium-sized businesses exporting their goods, Kretov said. “There is a certain trend that the figure is at 7–8% in West Europe. Exports will rise approximately to $10bn, by 25 times. If we set the West Europe standard, the figure of up to $10bn is feasible,” the executive said. eBay is witnessing a strong revival of sales in Russia and East Europe, he said. According to researcher Data Insight and eBay’s data, online exports of Russian goods increased 36% in 2018 to $746mn.
The Russian media market increased 12% y/y to RUB468.7bn in 2018,
according to estimates from the Association of Russian Advertisers (AKAR), VTB Capital (VTBC) said in a note on March 11.
AKAR has revised its approach to presenting Russian media market estimates. As many media market players distribute their content via different mediums (for example, major publishing houses distribute content via both print and online versions), AKAR has decided to break down the market estimates by content type.
According to AKAR’s new approach, the internet services segment showed the fastest growth (+22% y/y) in FY18 (out of the major segments) and accounted for 38% of the market (vs. 35% in 2017). Traditional TV was up 9% y/y in FY18 (there was a deceleration in 4Q18 from the 12% y/y growth in 9mo18), with its share declining to 40% of the advertising budget, from 41% a year ago.
At the same time, the online video advertising growth rate was close to internet services dynamics, at 21% in FY18. The audio content segment did not show any significant dynamics, while the rapidly growing digital audio remained a small portion of it (just 2%).
Publishers’ content showed a 3% y/y decline. Publishers focused only on traditional print versions lost 22% of their advertising budgets in 2018. However, the majority of publishing houses (68% of publishers’ content) combined both print and digital medium, and their advertising revenues stayed flat. The out of home segment (which now excludes cinema ads in the new approach) showed modest 2% y/y growth in FY18.
Across all content types, digital platforms remain the main drivers. Thus,
97 RUSSIA Country Report April 2019 www.intellinews.com