The Outlook of E-Commerce in Russia
Recent changes in Russian policy, such as its ascension to the WTO, have led to the promise of the further opening of its markets – entering into serious dialogues with foreign companies and establishing conditions for business cooperation in Russia.  The opening of its doors, so to speak, has led to a proliferation of companies seeking to do business in Russia. E-commerce in Russia has recently begun to boom due to growing access to the internet as well as the relatively small investment needed to enter new e-commerce markets.
With a population of over 140 million people, Russia presents a large, relatively untapped market although high tariffs and unfavorable trading conditions made it a risky place for foreign investments. With a growing middle class and increasing internet penetration, many large companies are recognizing the importance of the Russian market and are making efforts to break into this new territory. The number of Internet users in Russia is growing 150% annually, and it is estimated that Russians spent 26 billion U.S. dollars online in 2012. More recently in 2015 e-commerce in Russia totaled roughly 23 billion USD in sales. E-commerce growth slowed in 2015 – only 6.6% as opposed to the 31% growth seen in 2014 – and is expected to continue slowing. This is due in large part to recent economic crisis and depreciation of the ruble. However, despite the overall slowdown in growth of the market, the number of Russian online consumers is still growing. Studies have also shown that Russian consumers are turning to foreign e-commerce sites, as they offer goods at much cheaper prices. Consumers in particular are turning to Chinese markets for this reason.  For Chinese businesses, ensuring product information is available in Russian for these new consumers is essential.
For Western, English speaking businesses looking to take advantage of the turn to Russian e-consumers abroad, now seems to be the time. However, less than 5% of Russians speak English, making language one of the largest barriers to doing business in Russia whether online or on the ground. In order to be more accessible to the Russian market, many companies have launched versions of their websites and products translated into Russian, with more being added every year. Recent additions in the past decade include: Twitter, which launched its service in Russian in April 2011; Groupon, which entered the Russian market in August 2010; eBay, which launched a Russian interface for its popular online auction site in March 2010; and the NHL (National Hockey League) which launched a Russian language website at the start of the 2011-2012 season. Localized and translated content has helped these, and many other, businesses access the Russian-speaking markets. This is important because 72.4% of consumers worldwide say they would be more likely to buy a product with information in their own language, 56.2% say that the ability to obtain information in their own language is more important than price, and 72.1% spend most or all of their time on sites in their own language.
Localization is the process of adapting existing materials to a local language and culture. These materials can be websites, marketing materials, software, or even the product itself. Companies doing business internationally know that as products and services cross borders, a translation is needed. But language is only one barrier that hinders e-commerce. Cultural differences, such as the symbolic meanings of colors or differing connotations associated with words, can also mean that without professional help, a company may be sending a message quite different from that which it means to convey. This is also where marketing localization services come in to compliment the language translation being done for products, brands and advertisements.
There are many examples where a company has failed to consider the impact a translation will have in the local culture, Facebook being a prime example. Facebook, rather than hiring a professional translator to create the Russian interface for its website (and many other languages as well), decided to use crowdsourcing as a cheaper alternative. Although interesting in theory, crowdsourced translations are not high quality products as there is no control over who does the translations – novices or otherwise. The result is an interface that is inconsistent and riddled with errors – for example, professionals have been quick to point out when the volunteers have blundered translations on Facebook. There are many grammatical errors where gender is inconsistent or the wrong case is used. There are also a number of places where individual words remain untranslated. For this reason, the Russian-owned equivalent VKontakte.com continues to have a significant advantage over Facebook among Russian users. The lessons learned from this example can be applied to e-commerce as well. Those who are serious about breaking into the field of e-commerce in Russia need to seriously consider the reputation and image they want their brand to portray, and thus may need to look into professional linguistic services.
Western, English speaking e-commerce businesses, looking to take advantage of the increasing portion of the Russian online consumer market turning abroad for goods and services, need to consider professional translation and localization services. English to Russian translation of content is only part of the solution. The other factors include product localization and marketing localization initiatives. Marketing and advertising teams may find that they need to adopt new themes, ideas or messages to reach the Russian consumer market, and product descriptions, labels, packaging, websites, software and more will need to be adapted to the Russian language and culture. This all needs to be done to get the Russian consumer to even consider buying Western products. With political tension between Western countries and Russia, as well as tough competition from China due to geographic distance and lower prices, Western businesses will need to connect on as many levels possible with the Russian market in order to establish brand trust and consideration. With this in mind, and with a company’s reputation on the line, it is best to hire a professional translation agency, such as Language Connections, with experience in localization to produce a high quality equivalent that respects the local market’s linguistic and cultural expectations. Language Connections has helped many companies build an international client base, including Tekscan, a high tech company in South Boston, among others.
A good translation and localization can make the difference between success and failure of a business, so choose wisely.
*This post has been updated with more recent e-commerce statistics from Russia
- “Russia’s WTO entry offers a world of opportunity”
- “Why Russia, Why Now?”
- Data from Russian Chamber of Commerce
- Data from a study by Google Russia and CitiBank
- 2002 Russian Census Figures
- Data from Common Sense Advisory
- Business Insider “Russia’s E-Commerce Market Slowed Drastically in 2015“