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bne February 2019 Outlooks 2019 I 43
Russian cutthroat online taxi business, with development officer of Vezet
Ilya O’Guy
Russia’s taxi business has become ultra-competitive. Already running for several years, the incumbent Yandex.Taxi subsi- dies its drivers and won’t go into profit until maybe this year. It has already forced Uber into a merger and may IPO in the next two years. In this shark tank the gypsy cabs have all but disappeared as it is cheaper to take an official cab, but there is room in the market for several players.
Vezet is Russia’s second largest taxi aggregator and grew up in regions on the wrong side of the Ural mountains. It is battling it out with the incumbent but has a solid toehold in Russia’s biggest and not so big regional cities.
Ben Aris, editor-in-chief,
bne IntelliNews
Ilya O’Guy, development office of Vezet
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consecutive months, and unemployment low and stable in the range of 4.7-4.8%.
Real incomes of Russians fell by 2.9%
in annual terms in November, Rosstat reported on December 20. The statistical service revised its data on revenue growth in 2017, so the year-on-year comparison also changed; according to a new estimate by Rosstat, in August and September real income fell 1.6% and 3.2%, respectively, and slightly increased in October, by 0.3%.
After the revision, the real incomes
of the population in 2017 decreased
less than previously estimated – by 1.2%, not 1.7%. But against this back- ground, they worsened over this year: for January-November, revenues decreased by 0.1%, taking into account payments to pensioners of RUB5,000 in January 2017.
like it did in the noughties boom years. Slower growth and rapidly grow-
ing competition from e-commerce means the retail sector is also going through a process of consolidation.
Tech
The most exciting sector in Russia is tech. Online retail is now grow- ing at ten times the speed of the real economy, and given the size of Russia’s retail market (as well as the geographical spread), fortunes can be made from a good idea.
Russia's e-commerce market in 2018
is expected to reach RUB1.5 trillion ($22.8bn), according to estimates by Data Insight. Sales in Russian online stores are expected to increase by 19% to RUB1.15 trillion and in foreign stores
“If in December real incomes go down, 2018 will be the fifth consecutive year that Russians have reduced their income”
If in December real incomes go down, 2018 will be the fifth consecutive
year that Russians have reduced their income. In 2014, incomes fell by 0.7%, in 2015 – by 3.2%, and in 2016 – by 5.8%.
Real disposable incomes of the popula- tion are about 2% lower than the 2011 level and 10% lower than the peak values of mid-2014. The real wages of Russians in August 2018 recovered to the pre-crisis level, exceeding the level of August 2013 by 1.1%, but real incomes continued to be behind by 12.4%.
A study by Deloitte found that the num- ber of Russians who believe the economy is in recession has risen significantly over the past year, from 51% to 61%. The number of Russians who expect their purchasing power to fall in the coming year has risen from 22% to 30%. At the same time consumers’ inflation expectations are for a 9% increase in prices, while the CBR is expecting the increase in 2019 to be half that level.
In general retail is growing but will not play the role of economic driver
by 29% to RUB348bn. This is based on the 18% y/y and 34% y/y increases in the number of orders in Russian and foreign online shops, respectively.
Russian e-commerce has come of age. According to market research company Nielsen, 90% of Russians have made
at least one online purchase in the
last ten years as a result of a growing consumer trust in online stores.
According to the Russian Association for Electronic Communications, almost two-thirds of the domestic e-commerce increase was delivered by growth at the two domestic sites, Wildberries and Ozon. Wildberries said it is planning to earn RUB120bn in 2018,
a surge of 74% year-on-year. Its main rival Ozon.ru plans to grow 70-80%
to RUB70bn in revenues this year.
2019 will see more of the same as the heavyweight players get their mass market projects off the ground. The biggest of these is the Sberbank- Yandex tie up to create Yandex.Mar- ket, a Russian version of Amazon.
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