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An overview of Russia's demographics

Territory

World ecommerce rank: 13

Population: 143.7 million

Components: The territory of Russia is grouped into federal subjects which are then subdivided into administrative and municipal divisions. As of March 2014, the Russian Federation is made up of 85 federal subjects. Each constituent member is granted some degree of autonomy and equal federal rights of representation in the Russian Federation Council.

There is some controversy over the jurisdictional status of two federal subjects of Russia: the Republic of Crimea and the federal city of Sevastopol. These subjects are internationally recognised as part of Ukraine.

Russia’s federal subjects can further be grouped into nine federal districts and twelve economic regions.

Official language: Russian

Gross domestic product: USD 2.1 trillion

Currency: Ruble

Country Statistics Profile

The below table (Table A) displays the overall country statistical profile for the Russian Federation. The table was assembled using OECD iLibrary data, and forms a useful comparative piece when viewed in conjunction with the identical statistical profiles in other Cross- Border Trading Passports.

In some instances across the range of Passports, Ecommerce Worldwide uses the concept of purchasing power parity, displayed as ‘PPP’, to make accurate financial comparisons across different territories. The Dictionary of Economics published by The Economist defines PPP as ‘a theory which States that the exchange rate between one currency and another is in equilibrium when their domestic purchasing powers at that rate of exchange are equivalent.’ Thus, exchange rates are free to fluctuate, but the rates of exchange between two currencies in the long run will be determined by the territories’ respective purchasing powers –an identical basket of goods should cost the same amount in both territories when you take the exchange rates into account.

For the purposes of these Passports, in this section we will be using the US dollar (USD) as a comparative currency.

Table A

Based on data from: OECD (2014), “Country statistical profile: Russian Federation”, Country statistical profiles: Key tables from OECD.DOI dx.doi.org/10.1787/csp-rus-table-2014-2-en, accessed on 16/02/2015.

Largest Russian Cities 2014

The below diagram shows the largest cities in the Russian Federation by population estimate in 2014.

The Capitals v The Regions

Given their impressive populations and high internet penetration rates when compared with other Russian cities, it should come as no surprise that historically the majority of Russian online shoppers were concentrated in Moscow and St Petersburg, with Moscow accounting for nearly half of orders from Russian consumers.

The prevailing - and to some extent, accurate- view is thus of a ‘digital divide’ between the ‘capitals’ of Moscow and St Petersburg and the regions, and many e-Retailers have solely targeted these two areas as a result.

However, this traditional perception does not sufficiently take into account the new and emerging realities of Russian ecommerce; market geographies and delivery infrastructures are rapidly changing and improving, and the growth rate of internet users and those making online purchases in the regions has overtaken the growth rate in these capital cities.

The regions of Russia, therefore, should not be discounted from an e-Retailer’s strategy when it comes to selling online in this country; there is substantial and growing potential for online sales in these locations, and many nationwide ecommerce companies have generated higher revenues in cities with populations of between 300,000 and one million than they have in Moscow.

The dominance of Moscow and St. Petersburg as ecommerce destinations within Russia is therefore coming to an end.

 

 

 

 

 

Political, social and economic environment

Online and mobile usage

Online shopping behaviour

Marketing

Payment methods

Taxation

Legal framework

Logistics and communications

Customs clearence procedures

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