Page 14 - RusRPTDec21

The Russian economy grew 4.3% y/y during the third quarter, but the post-coronavirus recovery is almost over, say economists. “The solid 3Q21 figures were likely due to the still strong but waning momentum in retail and wholesale trade, manufacturing, and freight and passenger turnover,” Sova Capital said in a note.
At the same time retail sales in the real world surged 5.6% year on year in September of 2021, accelerating from a 5.3% increase in the previous month, above market expectations of a 3.8% rise.
Nevertheless, online retail has still become a major driver of consumption and analysts say the pandemic has caused a permanent change in the way Russian retail works. Local online sales accounted for 86%, or RUB2.07 trillion ($26.8bn), but its share of overall retail trade has fallen by about one percentage point in the last year.
Logistic and supply change problems during the pandemic also knocked cross border online trade, AKIT reports.
“In January–May, we saw stably falling volumes of cross-border trade, by 30% on average. There was a noticeable rise by 50–70% in July–September, but the cross-border market still failed to regain the position it lost with the breaking of the logistics chains due to the lockdowns,” Sokolov told PRIME.
In 2019, orders placed with foreign online stores accounted for 31% of the total e-commerce volume, but that plummeted to 14% in 2020 and was flat in January–September at RUB341bn ($4.6bn).
“In January–September, the share of online in total retail stood at 8.5%, but it will change by the end of 2021. It may beat the 2020 record of 9.6%. It can be explained not only by the new restrictive measures, which certainly boost e-commerce, but November and December are the traditionally high season in retail with sales and preparation for the New Year holidays,” he told PRIME.
IPOs and strong results
The boom in online retail in Russia has been fuelling a spate of IPOs as the major players list on domestic and international exchanges to raise further investment capital. Top five e-commerce site Ozon IPO in December 2020 was initially launched with the hope of raising $500mn but demand was so big the flotation raised a total of $1.2bn. In general Russia has been enjoying an IPO boom for move than a year, although recent soaring geopolitical tensions may have closed the window for further IPOs for the meantime.
In the meantime the leading players continue to report strong sale volume growth, although not all the leading companies are actually in profit.
The Russian subsidiary of the Chinese e-commerce site AliExpress gross merchandise volume (GMV) increased by 36% on the year to RUB133.3bn in April–September, excluding services, AKIT reports. By the end of September, the turnover of the company’s local business accounted for more than a third of the total turnover.
14 RUSSIA Country Report December 2021 www.intellinews.com