russian e-commerce market entry - 10 dos and don'ts
TRANSCRIPT
10 DOs and DON'Ts for foreign e-commerce companies
selling to RussiaBy Leighton Peter Prabhu
Partner in Interstice Consulting LLP, Head of the Russian officeMember of the Moscow Board of CERBA
Member of the expert alumni panel on Global Strategy & Leadership of McGill University, Montreal
Friday, June 15, 2012
DON'T assume that your brand has any goodwill or name recognition in Russia, unless you are Amazon or eBay
While your purchasing synergies and supply chain may provide some carryover economic benefits from your existing operations, in all other respects you are a startup operation in Russia and should approach the market with this mindset.
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DO invest in professional translation of your website and other marketing materials, both upon entry and with ongoing updates
A Russian-language website is a necessity - less than 10% of Russians speak a foreign language, and even fewer would consider transacting on a non-Russian website. Google Translate doesn't count: it's woefully inadequate in translating the nuances of Russian, even for simple phrases. Automated translation is a dead giveaway that a foreign company has not put much thought into localizing for Russia.
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DO adjust your social media strategy to the unique features of the Russian market
Russians are the most avid users of social networks in the world, but they use Russia-specific networks like VK and Odnoklassniki, which have different features compared to Facebook. Facebook is the 4th most popular social network in Russia, and trails the others badly. And they are not making up ground.
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DO adapt your online advertising and SEM campaigns to the popular Russian platforms
Yandex has twice the market share of Google and is an entrenched competitor with enough resources and innovations to fend off Google. They are bigger and closer to the market.
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DO establish a specific Russian customer service function
Russian consumers expect to be able to connect to a real person either by telephone or online chat, and in the Russian language. The most successful websites display their toll-free numbers prominently, in their headers.
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DO adapt your product offerings to Russia.
Recognize the extreme seasonality, cultural differences, and fashion predelictions. There's no point to feature sandals in February – a faux pas that one of my clients managed to pull off recently.
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DON'T assume e-commerce conversion rates will be on par with developed markets from the outset Russian consumers are wary of new companies and brands, and require multiple reinforcement of marketing messages before becoming comfortable enough to buy. Testimonials from Russian customers, Russian blogger reviews, Russian PR placements and other Russian-specific marketing efforts will encourage such confidence. Once established, the conversion rates are on equal footing with other markets.
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DO offer multiple payment options
There are upwards of 50 payment methods in Russia, with the most popular being cash on delivery. Russian consumers are wary to part with cash before physically inspecting the goods. However, on the flip side, return rates are much lower than international norms.
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DO expect that your business model will be copied If you're late to the game, it may be too late to secure market leadership. Google, Facebook, eBay, PayPal, Airbnb, Pinterest and a host of other global titans all trail their Russian counterparts, who have entered the market earlier with targeted, Russian-specific business models "inspired" by the originals.
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DO have patience While it's true that Russia has a larger online population than Germany, it's also true that only a small fraction of Russian users are active e-commerce consumers. However, retail in Russia is certainly more lucrative than in many other markets, and the expected growth in e-commerce is several times higher than can be expected in the developed markets of Europe and North America. Come to Russia for the future, not the present. Brands take time to build.
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Resources
Russia e-commerce blog: http://intersticeconsulting.com/russia/e-commerce/
Contact us:http://www.intersticeconsulting.com
Friday, June 15, 2012
Thank you!
Friday, June 15, 2012