Chinese E-Commerce Sites Boom in Russia

As business leaders from across the world continue their discussions at the St Petersburg Economic Forum, Russia's answer to Davos, it's clear that the commercial ties between China and Russia are growing ever stronger. And that's especially true online. As their access to it improves through increased smartphone use, more and more Russians are shopping on the net, and China is capturing a big share of those sales. Here's our Moscow correspondent Lorna Shaddick.

IN: UPSOT Sorting office
OUT: SOC
DUR: 03.18 

http://www.fsnradionews.com/feeds/0617Ecommerce-ls-generic.mp3

Script:

UPSOT sorting office

That's the sound of e-commerce in Russia… it's booming… to the tune of around 10 billion dollars a year.  

We're at Moscow's central post sorting office, where the volume of parcels shows just how many more Russians are now shopping online. But more and more of these packages have come over the border from China - 80% of all cross border packages, in fact, now originate there. Michael Winn, a senior consultant at Macro Advisory in Moscow, explains why.

SOT - Michael Winn, Senior Consultant, Macro Advisory, Moscow

The Chinese are low price suppliers and that's really the story. We've seen the ruble halve in value. // What people have done as a response is they've moved downmarket. So they're now buying on price whereas for many years the key driver in this market was brand. // That was the way the market was going and then -boom -  the tremendous slash in earning power meant that people had to look round more and more for bargains.

Winn says surveys show 83% of Russians, in fact, are now buying on price and looking for discounts - and three new Chinese sites have popped up in the last few months trying to fulfil that need. DHGate, Trade Ease - specifically designed for Russian consumers - and JD.com.

In shop: But the king of online retail here in Russia is undoubtedly Ali Express, the Ali Baba subsidiary that's number one in terms of fulfilled orders and website traffic. And the shop that's opening here in Moscow today, Technosila, wants its products to be among the hundreds of thousands sent across Russia by Ali Express every day.

Ilya Timchenko is the CEO of Technosila, which sells electronics and household goods. He says the company took part in Ali Baba's famous Singles Day event last November as part of a pilot scheme with the site. That went so well, it's now looking at a more permanent presence:

SOT - Ilya Timchenko, CEO, Technosila

There's really big, big traffic on the Ali Express website. And cooperating with Ali Express helps us to get additional clients for our customers base, and then we can create additional clients for our brands in the future. And the second advantage right now, the business relations are structured in a way that allows us to pay only for successful transactions.

Experts say clothing and electronics are the growth markets online, but although Chinese goods are attractively priced, there's still room for improvements on quality and delivery times. That reflects the mixed feelings among some Russian consumers:

VOX POPS

I don't use Chinese internet shops. // I once bought a Chinese iPhone 6, but I didn't use it as it was bad quality.

I've been using Ali Express for about 6 months. I normally order mobile phone accessories, like cheap headphones, phone covers - you can order those very cheaply. I'm happy with the quality.

And after the first ever Russia-China e-commerce summit last October, and with a new Russia-China online business platform opened in February, it's getting easier and easier for Russian shoppers to spend their rubles on Chinese sites. Lorna Shaddick, Moscow.