Page 109 - RusRPTJun19

according to Russian Post. The number of shipments increased +34% y/y last year to 300mn packages, creating a strong comparison base. The YTD decline is due to a combination of factors, including the aggressive growth of local marketplaces, lower limits for duty free shipments, maturing demand and the absence of a material improvement in delivery services and time. The substitution of cross-border trade represents a sizable growth pillar for domestic marketplaces that are growing aggressively and could increase the presence of Chinese goods. In 2019-23F, we see e-commerce increasing at a CAGR of +16% to RUB 3.4tn and accounting for 8% of the retail market. The food segment still lags the non-food segment due to the need for established logistics and delivery services, the still evolving service parameters and the developing capabilities for providing quality fresh categories.
Russia’s venture capital (VC) market increased by half in size in terms of the volume of investments to $714mn in 2018 as professional funds increasingly target Russian start ups and maturing tech companies for investment, according to a new report. DSight, a database of deals dedicated to the Russian venture market, has just released the English version of its latest yearly report, reports East-West Digital News (EWDN). The research includes contributions from EY, investor association NAIMA, CrunchBase as well as East-West Digital News. The market grew significantly last year, reaching $714.4mn, up 51.6% from 2017. These numbers include deals involving startups registered outside Russia but with roots in the country. Thus, the three largest deals of last year were:
Russia's Ministry of Economic Development floated the idea of creating Virtual Economic Zones (VEZ) for IT export-oriented companies, in order to help comply with one of the May decrees of President Vladimir Putin of boosting non-commodity exports from $150bn in 2019 to $250bn by 2024, Vedomosti daily said on May 20 citing drafts of ministry's proposals. As reported by bne IntelliNews, the VEZ idea was first voiced by the state integrated telecom major Rostelecom and Russian Union of Entrepreneurs and Industrialists (RSPP), who saw it as a way of boosting Russia's share on the global market of data processing centres from 0.9% to 5% by 2024. In 2018 Russian IT exports stood at $10bn, up by 19% year-on-year, according to the data of Russoft cited by Vedomosti, while only about $5.5bn of that was repatriated. IT incubators such as Skolkovo hub already provide its residents 10-year exemption from income tax and VAT, discounts on social security payments, and waivers for property taxes and excise duty. Similar measures are reportedly be proposed for members of VEZs, such as lifting tariffs on imported equipment, discounted profit, property, and land taxes, VAT, accelerated amortisation of assets, unlimited currency operations, and visa- free entry for foreign staff. The residents of such zones would have to be Russian-based companies with at least 50% of the revenues coming from exports in certain IT-related segments. For example, gaming and other divisions of MTS mobile and Mail.ru internet majors, would comply with such criteria.
Moscow is moving up the global rankings for cities that welcome startups and aims to enter the top three by 2030, according to Alexey Parabuchev, general director of Moscow’s Agency of Innovations, as cited by TASS. The Russian capital has already moved up from 14th to 10th place in the latest ranking of cities with the best ecosystems for startups, according to consultant StartupBlink. “Competition among the top 50 cities in the ranking is very tough, and the top 10 places are held by the strongest traditional leaders. Moscow is the only new city in the top 10 compared to the previous ranking
109 RUSSIA Country Report June 2019 www.intellinews.com