EBay seeks partner to tackle Russian delivery issues
MOSCOW – EBay Inc expects its Russian business to skyrocket if it can overcome logistical hurdles and is seeking a local partner to help it do so, its country head told Reuters.
EBay launched a Russian-language site in 2010 and has hired former Google Inc manager Vladimir Dolgov to lead its operations in the world’s biggest country, in a move which it said reflected the increasing importance of the Russian market.
Russia, where eBay’s main focus is on fashion and technology products, is one of its priority markets, constrained mainly by distribution bottlenecks in a country stretching some 9,000 kilometers from the Baltic coast near Kaliningrad to the Pacific.
“Imagine if tomorrow we could improve logistics,” Dolgov said. “We could then throw away all our plans because everything will soar, so that all our most optimistic predictions will seem like baby talk.”
The auction site said in a presentation its number of active Russian customers had risen 82 percent this year, though it gave no net number. It claims customers from Russia buy on eBay at a rate of once every three seconds, implying 28,000 deals a day.
With Russia’s online retail market growing over 25 percent annually and some 25 million new users expected to come online within the next three years, eBay cannot afford to ignore Russia, Dolgov said in an interview.
But as it tries to reach out to more Russian consumers, eBay faces a lack of domestic delivery services who can cover for the state postal monopoly, notorious for slow delivery.
Delivering goods from the United States can take four to eight weeks and there is no way to track orders once they clear Russian customs.
“We will be looking for a partner who will make it possible to deliver everything quite fast within Russia, and this will of course serve as a major catalyst of our growth,” said Dolgov, also a former CEO of Russia’s top online retailer Ozon.
Russia last year became Europe’s largest internet market but has yet to reach saturation as so far only around 60 percent of its 140 million population has access to the Internet.
According to research by East-West Digital News, Russia’s e-commerce market was worth $11 billion last year. Cross-border trade is expected to rise 43 percent this year to $1 billion, with the U.S. being the main country involved.
“All analysts forecast sustained growth (in Russia) over the next four to five years. If you look at the West, there haven’t been such figures for a long time,” said Dolgov.
So far the only employee of eBay’s Russian office, Dolgov says he can hire as many people as needed to support the company’s growth.
“Nobody is limiting us. There is a certain figure in the budget but it is rather a question how to reach to it.”