Russia seems to be well on track of truly shaking the effects of decades of communist rule followed by the chaos caused when it ended. It's been a long time coming, but Russia is now really starting to come of age in the online world.
Russian online population statistics
Emarketer is predicting that by the end of
2008, Russia will be the second largest Internet market in Europe (Germany is no.1), with more than 40 million Internet users. Russia is predicted to have nearly 43% of its population using the Web by 2012, up 72% from the 2007 level.
The majority of Internet users live in Moscow and St. Petersburg - these two cities are where the most affluent Russians live and where 90% of government spending is plowed.
From comrade to customer
With continuing telecommunications infrastructure improvements over the next few years, it's highly likely that we'll all have more Russian clients, particularly given the fact that our lifestyle is what many Russians aspire to (not that I'm saying that's A Good Thing).
Politics, media and free speech
The Russian government has shut down all independent TV channels, newspapers and radios (except one) - so there's still a great deal of control of information - except for one important medium, the Internet.
Russian president Vladimir Putin is known to be a very tough, controlling man and intolerant of opponents, but he refuses to impose China-style control of the Internet. The Russian parliament was going to pass several laws to control access and usage of the Internet, but he prevented those laws from pass. This makes the Internet even more attractive to Russian citizens - a way to get news, connect with others and express.
Russian ecommerce - the challenges
A big step forward for the Russian online community (and western merchants) in terms of ecommerce was the ability for them to send money via PayPal. Given PayPal's excellent security, this makes transactions from Russia paid via the service not so risky.
There's still a few hurdles Russia has to clear to become a really viable online economy. The first relates to delivery - freight services can be very unreliable. The Russian banking system is not as good as the West's yet and Internet users with credit cards aren't at the levels of the USA; but that is rapidly changing too.
What are Russians buying online?
If you're considering selling software or downloadable goods to Russians - at this point in time, it mightn't be worth the effort unless your product is truly unique. Piracy is still rampant in Russia, so whether it's software, tunes or tones - they get those via illegitimate means. It's just the way things are still done over there and most folks probably don't even give much thought to the legitimacy of their activities in that respect.
Books and gadgets are popular items for purchase, but the important thing to bear in mind about the Russian population is the gulf between rich and poor is huge. There is a middle class, but nowhere near as prevalent as in our own countries; it's still becoming established. While Internet access is dropping in price, inflation is still high on many other items.
Given this inequity of wealth distribution, from what I've researched, where there is huge market however is in luxury items. There are many rich entrepreneurs and families in Moscow and St. Petersburg who are happy to splash cash around, particularly if it enables them to emulate the people in the West - it's a status thing. When thinking about luxury items, these aren't necessarily what we would consider luxury. For example, a few years back, Western brand names in jeans were the gotta-have. A standard pair of Levi's had the same status as some of our more expensive designer labels here.
Dealing with and marketing to Russians
A *lot* of Russians have been helping to power the web for several years now; but most folks don't know it. There would be tens of thousands of Russians now operating sites or working behind the scenes as programmers and the English language is increasingly common among the population. However, if you are going to target the Russian market, translating your site or even a few critical pages into the Russian language would be most beneficial. If this is something you're interested in doing, let me know - I can put you into contact with a Russian English teacher whom I've worked with for years who freelances in this sort of work.
Aside from that, marketing to Russians is pretty much the
same as marketing to folks in the West, as it's the Western lifestyle they
aspire to. Again, I'm not saying our lifestyle is necessarily A Good Thing
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