Page 23 - Eastern Europe Outlook 2020

the size of the programme to less than 1-2% of the installed capacity in Russia for the next decade," VTBC estimated.
"Nevertheless, what is important is the slow but steady unfolding of a system of tools which allows environmentally-aware companies (both utilities and in other sectors) to deliver on their commitments to reduce carbon emissions or even reach carbon neutrality," the analysts concluded, adding that the demand for such instruments "clearly exists".
● E-commerce
E-commerce remains by far the most vibrant part of the Russian economy and is growing at literally ten times the rate of the real economy. It is notable that in 2019 that the leading online store Wildberries over took the leading real world clothing store Sportsmaster to become the biggest seller of clothes and apparel in Russia – the first time an e-commerce business has ousted a real world store to become market leader.
There are several competing sites that are setting up not only diversified retail offerings, but are attempting to create entire marketplaces. Ozon.ru is one of the leaders here and is a marketplace where small producers can come to offer their goods nationwide, while Ozon provides them the logistics and distribution system. These businesses are currently growing at 50% a year or more and will continue to eat into traditional retail, but at the same time they will generate new opportunities.
The leap-frog effect here has been working to Russia’s advantage: late into the game they have gone straight to state-of-the-art technology. For example, a reform forced all stores in Russia to buy advanced cash registers that are connected to the internet and have contactless payment and scanners. This has already led to some new innovative businesses that are impossible in developed markets as cash register technology is far behind what is in used in Russia.
There are several specific changes in the works in 2020 to further improve the system.
Russia's finance ministry proposed to slash the limit for duty free cross-border packages to €20 as of 2022​, a drastic decline from the current €500 that was lowered to €200 as of January 2, 2020. The issue of duty free packages is crucial for cross-border e-commerce and has been a hotbed for debate and lobbying since 2018, The Bell reported on December 11. As of January 2020 the duty free limit is lowered to €200, while for the excess value, the import duty rate changes from 30% to 15% but not less than €2 per kilo. Chinese AliExpress is the leading cross-border operator in Russia, with a market share of 40%, and would benefit from the lowering of the import duties. AliExpress recently formed a joined venture with Mail.ru and MegaFon​, assets of the influential tycoon Alisher Usmanov.
The turnover of e-commerce is set to rise 24% y/y to RUB1.6tn in 2019, according to the Data Insight forecast.​ Domestic trade represents 60% while a further 40% comes via cross border trade. The average checks in the two sectors differ significantly: domestic e-commerce sees a blended RUB3,500 while cross-border orders on average some $15, or RUB953, according to the Ministry of Digital Development, Communications and Mass
23​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com