I recently came across the article: “Russian Internet Growth Provides Opportunity and Challenge in Wall Street Journal” . It provides information about opportunities in the Russian market and also mentions the problems you can face doing business in the country. I found some additional figures for e-commerce.
«If you factor in the other Russian-speaking markets in the CIS, the total market will be 130 million by 2013. » ( Wall Street Journal) Promising figures but: what problems do you need to solve before receiving part of this money? Russia is one of the faster-growing markets in Europe (even though it’s not just Europe) that has its own specific conditions. It’s not as easy as you think. So if you’re determined to tackle them you need to start preparing your business plan. The main audience on the Internet is people in the big cities:
These aren’t only big figures but also large distances and it’s just the first issue. Be aware of the payment system and invest into trustworthy delivery system (human capital). «For example, the Russian online megastore (Ozon analogue of Amazon) has been busy setting up its own delivery network – “unlike Amazon who had an amazing chance to have UPS when they started and the American post”, explains director general Ms Gavet. Currently, Ozon.ru covers 84 cities directly, and the rest through the Russian Post (Pochta Rossii).” ( BBC) Such a difficult delivery system is a result of long shipping time and cash transactions. This is a result of cheating by retailers in the early years. So your website should look trustworthy because it takes time for customer to start shopping experience and well organized website can shorten time to make this decision.
Use international companies with offices in the country to promote your business. Most international companies are using the same approach, as in the own country. However, in Russia you can’t trust this approach. The best example has to do with social networks. You can use an international company with no specific department and they mostly recommend Facebook. If you think Vkontakte is the right answer you are wrong again. It is not the only social network and there are others who are influencing different age groups. If you don’t want to waste your money by making worthless advertising campaigns: it’s definitely better off to do it with professionals or spend your own time exploring the country.
Find the right audience and integrate with the right local social channels. As I mentioned before we have different type of channels in the Internet comparing to Europe and different life style.
As you can see TV is still a preferred channel to advertise, thus, having an Internet shop doesn’t mean it should be advertised through the same channel. Pay attention to both Internet and TV advertising.
Legal issues can be solved just inside the country (that’s what you are paying for mostly). The video created by some Russian company shows the peculiarities of the country’s system:
It’s not that the paper doesn’t matter at all but most of the papers don’t have such influence on the company relation. You can solve legal problems for a long time. Bribes are official part of the expenditures so you should be ready to include this channel. They will make more sense if they will be done in the right way so for that you need a quality law company to solve it for you. Legal issues of copyright are another part of this problem. Be ready that if you make some content you don’t want to be copied it will be nearly impossible to protect it and there are no laws again burglars.
The last thing is cultural differences that are an issue in any country you can think about. Be ready that Russians are doing everything in the last second. The country that has 2/3 in Asia doesn’t have the same altitude as Europe. As I mentioned before the video warns you about the deadline problem. This problem hasn’t been discussed in the article but it can cost you a lot of money, so it´s convenient to be aware of it. These differences will influence not just the way you build the relationship with companies but with customers as well.
Be ready to invest more than you thought before. Pay attention to the points which are mentioned before and probably you will be able to build up a successful company in this promising country.