The e-commerce market in Russia is getting highly competitive!

Author | Yang Zi

Editor | Li Xiaotian

In the Russian cross - border e - commerce market in 2022, there was such a seller story circulating: An e - commerce novice with a debt of 300,000 yuan entered the Russian market when established companies were hesitating. Three years later, he not only paid off his debt but also bought a car and a house in his hometown. Relying on the dividends of the Russian e - commerce market, he achieved a story of an ordinary person's counter - attack, just like in a popular inspirational novel.

The time window of the dividend period is always short. Just three years later, if we look at the Russian e - commerce market now, it is almost impossible for such "get - rich - quick stories" to happen again. Compared with the previous two years, the threshold for entering the Russian market has become higher, and the competition has intensified. "There are still opportunities, but they are hard to seize," a Russian foreign trade practitioner summarized concisely.

In 2025, Russia remains the most sanctions - hit country in the world. According to a study by the Harvard Kennedy School, since Russia launched its special military operation in Ukraine, about 50 countries around the world have imposed more than 20,000 sanctions on Russia.

The result of the sanctions is obvious. Russia, which has had a weak foundation in the light industry since the Soviet era, faced a large - scale withdrawal of enterprises from Europe, the United States, Japan, and South Korea. As a result, Russia's commodity supply chain suffered a systematic impact, leaving a market gap worth trillions.

For Chinese merchants, since the beginning of 2025, Chinese merchants, who excel in manufacturing, need to seek stability in the face of changes. Diversified market layout must be an important measure. Looking for a "second market" or developing a "new market" outside the US market has become a consensus among sellers in the current environment.

The complementarity between the two sides has unexpectedly led to the prosperity of bilateral e - commerce trade.

In 2024, the trade volume between China and Russia reached a record high of 244.8 billion US dollars. In the e - commerce field alone, according to the data of the Russian Association of Electronic Commerce Enterprises, the sales volume of the Russian e - commerce market increased by 28% in 2023 compared with 2022, and then increased by another 41% in 2024, reaching 9 trillion rubles. Sokolov, the president of the Russian Association of Electronic Commerce Enterprises, said: "The regional markets are just starting to develop, and the potential is huge. The e - commerce transaction volume will continue to grow by about 40% in 2025."

Therefore, in 2025, the three major Russian e - commerce platforms, Ozon, Yandex, and Wildberry, have started their recruitment campaigns in China. In this article, we will look back to understand the reasons behind the booming Russian e - commerce market and also look forward to analyze the methodology for Russian foreign trade people to seize opportunities in the reshaped trade chain.

"Only a very small number of Russians still believe the prejudices against Chinese goods. Meanwhile, more than 70% of them will specifically go to buy Chinese goods." This is a sentence from the survey report of the Russian e - commerce company Yandex.Market last November. Generally speaking, in the past year, the number of sellers selling various Chinese goods on the platform has increased by 16 times in one year and is still rising.

The report also specifically pointed out that even among those who hold prejudices against Chinese goods, as many as 65% of them think that the quality of Chinese goods has improved in recent years. In the eyes of Russians, the best - quality Chinese goods are household appliances, electronic products, clothing and footwear, and household items. Some respondents aged between 28 and 43 also mentioned that the quality of Chinese cars is good.

In Russia, the recognition of Chinese products/brands is gradually increasing. To some extent, this is due to the growing demand of Russian consumers for Chinese goods and the increase in supply from sellers. Huang Xiao (Simon Huang), the President of Ozon Global Greater China, told Xiaguang She, "We entered the Chinese market in the fourth quarter of 2022, and we have achieved dozens of times of growth so far. The current number of active sellers is now approaching more than 100,000 per month. As of today, we have helped 200,000 Chinese merchants generate income on the platform." In 2022, there were only about 10,000 active Chinese sellers on Ozon.

Objectively speaking, the two - way interaction between the two sides can be summarized into three reasons.

Firstly, the direct reason, or the driving force that accelerated the matching of supply and demand between the two sides, is the war and sanctions.

An interesting and somewhat ironic episode is that on April 8th, the Russian Embassy in Kenya posted a rather satirical tweet on social media with the caption "Tariff wars" and a picture of "Russia" lying on a high wall, looking down at "the United States", "the European Union", and "China" below. The reason is that after Trump took office for his second term, Russia was not on the first list of countries subject to additional tariffs. Trump also gave the reason that the trade volume between the two sides was too small, "not worth adding tariffs".

However, in this trade war, although Russia can stay out of it to some extent, it is hard to be as relaxed as in the picture. According to the information on the US Federal Register website on April 12th, Trump signed an executive order to extend the state of emergency declared by Executive Order 14024 for one more year under the National Emergencies Act. This means that a series of sanctions against Russia introduced by former President Biden will be extended for another year.

The impact of the sanctions is the withdrawal of Western brands from the Russian market. After the outbreak of the Russia - Ukraine conflict, brands in multiple fields such as catering, retail, energy, and technology have left Russia one after another. In the retail industry, brands such as H&M, IKEA, JYSK, and Mango announced the suspension of sales in Russia; Internet giants such as Google, Amazon, Microsoft, and Meta cut off their dissemination channels in Russia. Mobile phone giant Apple, PC giants HP, Dell, and Lenovo, and automobile giants BMW and General Motors all stopped supplying to Russia.

It can be said that the departing brands cover all aspects of the daily lives of Russian people. The supply has been cut off, but the Russian people still have to live. The withdrawal of Western brands has accelerated the wave of substitution, which has created great opportunities for Chinese and other international brands to enter the Russian market.

Secondly, the complementarity of Sino - Russian trade has become more obvious after the Russia - Ukraine war. As early as in the Soviet era, Russia focused on the development of heavy industries such as the military industry, energy, and steel. This industrial structure imbalance has led to a weak foundation in the light industry, and Russia has not been able to get rid of this dilemma even in modern times. Therefore, in the light - industry sector, Russia has always relied on imports to make up for the shortage. For example, in the food sector, Russia's import dependence on meat, dairy products, fruits/vegetables exceeds 50%; in the industrial sector, the import dependence on high - end equipment, chips, and pharmaceuticals exceeds 70%; the dependence on light - industry products such as clothing and footwear is even higher, exceeding 80%. Therefore, Chinese goods with high cost - performance ratios have quickly entered the fast - moving consumer goods, electronic products, and automobile sectors, filling the market gap.

Thirdly, in the long - term perspective, the proportion of online consumption in Russia is continuously increasing.

In fact, among the CIS countries, Russia has the most advanced digital infrastructure. More than 90% of Russians use the Internet regularly. The high penetration rate of the Internet, the popularity of mobile technology, and the use of social media have created ideal conditions for the development of e - commerce.

Around 2020, the COVID - 19 pandemic stimulated the development of e - commerce. According to Russian media reports at that time, some elderly people over 60 years old started learning to use e - commerce websites. "After the government announced the closure of supermarkets and markets, I had to learn to use e - commerce websites. I found it very convenient, and there are also many choices of products on the websites."

Meanwhile, the wide range of product categories, convenience, and regular discounts on e - commerce platforms have also stimulated the enthusiasm of Russian consumers for online shopping. In 2024, the proportion of cross - border e - commerce in the overall Russian e - commerce market reached 35%.

To do business in Russia, one has to be extremely meticulous.

"For example, Russian women will choose extremely exaggerated lip - filling; when setting up a holiday table, the food is so abundant that it might break the table legs. Take e - commerce platforms as an example. The product cards in Russia are carefully crafted, and the competition is extremely fierce." The marketing director of Linghang Shumao Technology Co., Ltd., a Chinese service provider for the digital overseas expansion of brands, told Xiaguang She that Chinese sellers are used to doing business in markets where products can still be sold even if the product cards have errors or the product photos are of poor quality. But in Russia, this won't work. If you see a product card with poor filling quality and a bad Russian translation on an e - commerce platform, it is definitely not sold by a Russian seller.

If in 2022 - 2023, companies that seized the opportunity could earn the first pot of gold, then in the current environment of increasing competition, the harshness of the market has been revealed. From the perspective of the "visible hand", since April 2024, Russia has lowered the tax - free import threshold for goods from 1,000 euros to 200 euros. Russia's relatively high tax - free quota for cross - border shopping was one of the reasons for the popularity of its cross - border e - commerce, but now the threshold has been raised.

The "invisible hand" is even more cruel. Linghang Shumao said, "It is almost impossible to enter an e - commerce platform with less than 1 million rubles. A few years ago, 100,000 to 200,000 rubles was enough to start a business. Three years ago, the advertising cost on online platforms accounted for 10% of the value of the goods for sale, and now it is no less than 30%."

The total cost of sellers has also been pushed up accordingly. "Now it may account for 40% of the selling price, while a few years ago it was no more than 15%." That is to say, the days of easily making money are over. Merchants need to do a good job in data analysis and strategic planning, and consider multiple factors such as dynamic demand, competition, ranking algorithms, platform rules, and new regulations in real - time. At the same time, they also need to control the company's financial situation and make management decisions quickly and correctly.

According to the survey results of 3,000 entrepreneurs by Yandex Market and the Position Research Center, in 2023, the revenue of enterprises increased by 28% year - on - year, while in 2024, it only increased by 20%. Meanwhile, from January to September 2024, the number of new sellers on e - commerce platforms increased by 17% year - on - year, while the growth rate in the same period of 2023 was 38%.

All signs indicate that the revenue growth of e - commerce in Russia has slowed down.

Greater difficulties lie in payment and logistics. In terms of payment, affected by the sanctions, the normal transactions between Russian banks and the international financial system, including payments through the SWIFT system, have been hindered. There are fewer and fewer banks and channels for direct settlement. The transfer handling fees remain high, the risk of transfer freezing has increased significantly, the transfer time has become longer, and the fees are also higher.

In addition, the exchange rate of the ruble fluctuates greatly. In November last year, affected by the expected depreciation of the ruble, some sellers were worried about their losses and a decrease in the number of orders, so they had to reduce or suspend direct trade.

A Russian foreign trade person told Xiaguang She that considering the difficulty of getting payments back, he would try to use the received payments to buy other goods and exchange them for money through turnover.

Logistics is also a major problem.

Domestically in Russia, the country is vast with a sparse population. 60% of its e - commerce transactions come from Moscow and St. Petersburg, and the logistics facilities in the western region are relatively well - developed. Secondly, regional central cities such as Yekaterinburg, Novosibirsk, and Kazan generally also have the layout of overseas warehouses and other infrastructure, but with a lower priority. However, the logistics convenience in the Far East cities such as Siberia and remote rural areas is relatively low.

Therefore, small and medium - sized cross - border sellers often adopt the strategy of "centering on Moscow and radiating to the west", covering an area within a 500 - kilometer radius around Moscow through the Moscow warehouse to ensure delivery within 3 - 5 days. Orders from the Far East may be directly abandoned or high freight rates may be charged.

In the international transportation part, in the three years after the outbreak of the Russia - Ukraine conflict, the cost of goods transportation has increased by 69%. This is due to the reconstruction of the global trade and logistics supply chain after the sanctions imposed by Europe and the United States on Russia.

Different from the previous western routes, more trade transactions now come from the east. This means that a large amount of capital is needed to update the original infrastructure, resulting in an increase in rates. For example, the increase in the supply of goods from China to Russia has led to serious congestion at the Russia - China border. Freight trucks often stay there for weeks waiting for customs clearance. There are many links and a long chain in international trade, which usually involves the laws and regulations of multiple countries. The person in charge of the supply chain of Linghang Shumao told Xiaguang She that a batch of container goods was transshipped to Russia via Europe. All the necessary documents were complete, but when the goods arrived in Klaipeda, Latvia, they were seized because some goods (including soda water) were suddenly included in the list of sanctioned imports. The incident of US food - grade soda water is a typical example of the complexity of export customs clearance procedures.

Those affected are not only Russia but also multiple economies in the trade chain. For example, more goods transported from Asia to Europe now choose to pass through India, Turkey, and countries on the Arabian Peninsula. However, due to the interruption of direct flights between Russia and Europe, Russian domestic logistics enterprises are also facing many difficulties. A batch of goods transported from the UK to Russia needs to pass through 9 transfer points.

In addition, the shortage of talents in the transportation industry and the rising labor cost are also factors driving up the freight rates. From January to November 2024, the median wage of employees engaged in transportation, logistics, warehousing, and foreign trade activities increased by 49% year - on - year, reaching nearly 111,000 rubles. The demand for warehouse workers increased by 28.6% year - on - year, the demand for Class E drivers increased by 41.8%, and the demand for Class B and C drivers increased by 41.8% respectively.

Since 2022, the prices in Russia have been rising all the way. In the first 50 days of the conflict with Ukraine, the prices of almost all socially important commodities have risen: the price of beef has increased by 24%, the price of rice has increased by 31.7%, the price of carrots has increased by 47.4%, and the price of Coke has increased by 200%. In that year, Russia's inflation rate soared to 13.75%.

In 2023, after a brief decline to 5.86%, Russia's inflation rate rose again to 9.5% in 2024. By March 2025, Russia's annual inflation rate continued to rise to 10.3%, which is the fifth consecutive time that Russia's inflation rate has reached its highest level since the base - effect of the conflict between Russia and Ukraine began in February 2023. The inflation of services and food is the most serious, reaching 12.9% and 12.4% respectively. The 18.9% price increase of fruits and vegetables has significantly pushed up the overall inflation rate.

Therefore, in the early stage of the conflict, Russian consumers became more price - sensitive, and low - and medium - priced goods can be considered the most promising area. E - commerce platforms have quickly filled the supply - demand gap between the two sides. Ozon introduced policies to reduce the logistics cost of goods priced below 500 rubles to Russia by 50% and also reduced the sales commission of goods priced below 1,500 rubles (about 17 US dollars) by 40%.

A salesperson from Yandex told Xiaguang She that at present, the best business to do is still B2B foreign trade. "The other side has a large demand for goods. If you find a distributor with high demand, the sales volume will increase very quickly."

Generally speaking, although inflation has increased the price - sensitivity of Russian consumers, the rigid demand still exists in the long - term, which is the space that should be seized at this stage. The overseas head of a car company also expressed the same view to Xiaguang She: "I am responsible for the regions of Moscow, St. Petersburg, Kazan, and Sochi. People there still live their normal lives and are not greatly affected by the war. For the whole of Russia, since the war, the market has changed greatly. The European, American, Japanese, and South Korean brands that they used to like have left one after another. However, the market demand still exists, and Chinese brands have filled many market shares."

Xiao Zhang, a Chinese student studying in Russia, told Xiaguang She that Russians hardly have the habit of saving. Even though the housing prices in Russia are approaching those in first - tier cities in China, local people still "spend as much as they earn". The main impact of inflation is mainly reflected in the entertainment sector. "For example, some entertainment facilities are now closed, and the proportion of people going to restaurants or going out for entertainment during festivals has decreased."

In addition, with the protraction of the Russia - Ukraine war, Russia's wartime defense industry has boomed. In order to attract workers when there is a serious labor shortage, civilian enterprises have also followed suit and started to raise wages. As a result, Russia unexpectedly finds itself in a boom of consumer spending.

According to the data of the Russian Federal State Statistics Service (Rosstat), after the Russia - Ukraine war, Russia's real wages have increased by nearly 14%, and the consumption of goods and services has increased by about 25%. More than 13% of Russians think that their financial situation is "good", which is the highest level since records began in 1999. After KFC withdrew from the Russian market, its successor Rostic's even plans to open 100 new stores in 2024.

We also observed the change in the median wage in Russia from 2019 to 2023 and found that it showed a continuous upward trend. In June last year, Putin announced that the minimum wage would be linked to the average wage. Since 2025, the minimum wage will be 48% of the average wage, reaching 22,000 rubles (about 1,973.23 yuan), which means an increase of about 15%. The goal for 2030 is to achieve a minimum wage of at least 35,000 rubles (about 3,139.23 yuan) per month.

Therefore, from the perspective of income and expenditure data, the income of Russian consumers in the working - class can cover their expenses, and the household savings rate has slightly increased. In the list of countries classified by national income in 2023 released by the World Bank in July 2024, Russia's per - capita gross national income reached 14,250 US dollars, rising from an "upper - middle - income" country to a "high - income" country for the first time since 2015.

Meanwhile, the impact of inflation is also limited: Russian consumers will seize the opportunity to buy durable goods and large - scale commodities to avoid further price increases.

Overall, the consumption resilience still exists. Huang Xiao (Simon Huang), the President of Ozon Global Greater China, is optimistic about the growth of the Russian e - commerce market in 2025 and is looking at the small towns and rural areas in Russia. Huang Xiao said that compared with the past, small - town residents could only buy goods in local stores (usually non - chain stores). This means that not only is the variety of goods limited, but the prices are also often high, and the competition is fierce. Now, pick - up points for orders from large - scale markets like Ozon have even appeared in small villages. In the past two years, due to the rapid growth in the number of buyers, the sales growth rate of Ozon in small towns with a population of no more than 10,000 is twice that of other regions.

The improvement of e - commerce infrastructure shows a larger market space, allowing Chinese merchants to reach millions of new customers outside of Moscow and St. Petersburg. However, it is worth noting that if we look at a longer - term perspective, many Russian foreign trade practitioners hold the same view: Low - priced goods are in a window period, but in the long run, brand merchants have more opportunities than those who simply engage in bulk - selling.

Even at this stage, the business environment in the Russian market shows a tendency towards brand - name products and localization. For example, when opening a store on an e - commerce platform, there are two types: cross - border stores and local stores.

Local stores need to be registered with a local Russian entity, such as a Russian company or a Russian citizen as the legal representative. Local stores need to stock up goods in Russian warehouses in advance, with fast logistics delivery. In terms of payment collection, they can also directly remit the money back to domestic accounts through the "white customs clearance" model to avoid the risk of foreign exchange control. In addition, Chinese sellers have also come up with the "simplified white customs clearance", that is, goods enter Russia through the "Customs Union area" of Russia (Belarus, Kazakhstan). When being cross - border sellers, these problems were solved by the platform, but now sellers have to handle them by themselves. A Yandex sales manager told Xiaguang She, "Only local stores will have traffic, cross - border stores don't. And local consumers also trust local stores more."

Chinese brands that have emerged in the Russian market have won the trust of consumers through mature and refined brand - operation methods. For example, in terms of products, they are more in line with the needs of local consumers. Haier has launched large - capacity refrigerators and washing machines for the Russian market and promoted their energy - saving and cold - resistant features through online and offline advertising;

The choice of channels is also more in line with the Russian business form. For example, Li - Ning has opened flagship stores in cities such as Moscow and has enhanced its brand awareness through sports marketing by sponsoring local basketball games in Russia;

In terms of marketing, Russians prefer Telegram community marketing. The mobile phone review video of Xiaomi in cooperation with the tech blogger @TechReviewer has attracted a large number of young Russian consumers.

Amidst the changes, there are also new opportunities. After three years of conflict, there is no shortage of general - purpose commodities in the Russian market, but in some niche fields, there is still a lot of unmet demand, and there is still room for brands to make in - depth efforts. For more Chinese brands, no matter in which market, they must learn one lesson: Don't just be a short - term beneficiary during the window period. Instead, when the opportunity arises, take root in the market and become an old friend of the new market.

This article is from the WeChat official account "Xiaguang She". Author: Yang Zi. Republished with permission.