Page 27 - BNE_magazine_05_2020

bne May 2020 Companies & Markets I 27
bne:Tech
How COVID-19 is shaking Russia’s online and offline retail
Adrien Henni of East-West Digital News (EWDN)
Russian retailers have been rocked for six weeks as epidemic fears were mounting among the population. Even before the shutdown of many offline outlets
– which was ordered in Moscow city on March 31 – online demand surged across a host of products.
Conservation-type food products registered strong demand in late February, with market leader Utkonos reporting a 60% sales spike in comparison with the same period of last year.
E-commerce companies also reported a rush, sometimes fleeting, on many other food items as well as on refrigerators and other home essentials. Demand for board games,
crafts and hobbies, paracetamol and even sex toys peaked
as Russians switched to remote work and prepared for the lockdown.
To prevent gouging, e-commerce major Ozon even had to cap prices for the most sought-after goods. Amid these events, the company received a whopping $150mn from Russian and US investors in a long-awaited round of financing.
In the first “non-working week” (as the authorities call the lockdown), from March 30 to April 5, Russians’ consumption habits changed drastically. The number of online orders at cafes and restaurants increased by 78% in comparison with the last week of February, according to Yandex Checkout, the online payment arm of Yandex.
During this first week off, online paid TV providers
generated almost twice (93%) as much revenues as in the
last week of February. Gaming services saw the number of transactions increase by 29% while their turnover grew by 19%. Transactions on educational platforms (online courses, training, and masterclasses) were up 64% but turnover was almost stable (+5%). Yandex Checkout attributes this paradox to the fact that “customers chose either low-cost options or free trial periods.”
Unsurprisingly, sales of travel packages, entertainment tickets and personal services decreased considerably, according to Yandex Checkout. Sales of concert, cinema and theatre tickets dropped by 65%. The number of transactions on websites offering repairs, cleaning, hairdressing, massage and manicure
at home decreased by 31% while turnover fell by 52% during the first week off, compared with late February.
At the same time, the number of online payments to charities increased by 13% (+27% in turnover). “Remarkably, in these new circumstances, people still try to help others,” notes Anastasia Fatkulina, analyst at Yandex Checkout. Meanwhile, however, charity support from mid-sized corporate donors dropped sharply.
Contactless deliveries on the rise
Delivery activities are being transformed by the epidemic.
In March, restaurants and cafes massively switched to online orders, forcing Delivery Club, a market leader, to simplify its integration procedures.
From Wildberries, to Lamoda, to KupiVip, major online retailers are now promoting contactless delivery – where the courier and the receiver do not come into close contact at the point of delivery. This follows the example of Ozon, which had successfully experimented such procedures last year. In the first two weeks of March, the average number of contactless door deliveries was up 60% from Q4 2019, Ozon reported.
Meanwhile, Mail.ru Group’s services Vse Apteki and Delivery Club announced plans to launch a delivery service for non- prescription drugs ordered online. Their rival Yandex.Taxi announced similar plans almost simultaneously.
On March 30, major e-commerce and logistics companies agreed new rules to reduce contamination risks during their operations. Pickup points will no longer accept cash or card payments and close their fitting rooms. The personnel will wear masks and gloves, the companies pledged, while contactless courier deliveries will become the rule.
In Russia as elsewhere, e-commerce companies began hiring new personnel massively. Market leader Wildberries plans to offer 3,500 new jobs across 450 cities. With a dedicated website, the company highlighted the social impact of this initiative as many Russians could lose their jobs due to the epidemic.
Grocery delivery service iGooods intends to hire up to 3,200 new couriers and buyers, nearly doubling this staff.
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