RUSSIAN FEDERATION RUSSIAN SHOPPERS ARE HIGHLY EDUCATED, TECHNICALLY SAVVY AND EXTREMELY BRAND AWARE. 71% MADE THEIR FIRST ONLINE PURCHASE < 4 YEARS AGO. MARKET SIZE 1 *VALUES IN $USD BILLIONS PER YEAR // ‡ PROJECTED FIVE-YEAR REVENUE // Russian Federation $14.5 $17.5 $20.9 $23.2‡ $24.8‡ 2012 2013 2014 2015 2016 2016 PROJECTED REVENUE // Other Major Economies $546 $143 $133 $66 $47 $27 $24.8 $24 USA JAPAN UK GERMANY FRANCE BRAZIL RUSSIA KOREA PRODUCT CATEGORIES 2 *VALUES IN $USD BILLIONS PER YEAR // ‡ PROJECTED BY ORDER VOLUME 21% 10% 31% 16% 3% 3% APPAREL MEDIA, TOYS & GAMES CONSUMER ELECTRONICS HOUSEWARES & HOME IMPROVEMENT BEAUTY FOOD LOCAL SNAPSHOT BEHAVIOR STATISTICS OF PURCHASES ARE MADE 44% SHOPUSING SOCIAL MEDIA. 41% SHOP ON MOBILE PHONES 21% SHOP ONLINE WEEKLY. RUSSIAN CULTURE CONSIDERATIONS ALMOST HALF OF ONLINE SHOPPERS IN METRO RUSSIA USE CASH ON DELIVERY (COD). Shoppers are weary of unknown resellers and brands due to past history of fulfillment issues. Shoppers are very brand savvy, aware and less price sensitive. COMMERCE EXPERIENCE MARKETING // SEO Best Practice OPTIMIZE SEARCH FOR THE MARKET USING YANDEX (RUSSIA’S GOOGLE). YANDEX RAMBLER 61.9 % 1.0 % SEARCH.MAIL.RU 8.1 % PERCENT OF RUSSIAN USERS’ WEB TRAFFIC VIA SEARCH ENGINES. Marketshare data measured by liveinternet.ru, for February 2014 http://goo.gl/j2a39r GOOGLE 27.2 % BING 0.6 % MARKETING // Email Best-Practice mail.ru COMMERCE BUSINESS INFRASTRUCTURE FULFILLMENT FEW COURIERS FULLY COVER RUSSIA & ALL STRUGGLE WITH REACHING RURAL CUSTOMERS. Consider offering free delivery nationally and overlaying premium services like same-day or scheduled delivery in Moscow and St. Petersburg. Provide shopper pick-up in your brick-and-mortar or partner store. COMMERCE EXPERIENCE SHOPPER EXPERIENCE THE RUSSIAN LANGUAGE IS ESSENTIAL FOR PRODUCT, SHOPPING & CUSTOMER SUPPORT. ENGLISH-SPEAKING PERCENTAGE OF RUSSIAN POPULATION 5% SHOPPING BEHAVIOR PAYMENTS CREDIT CARD USE HAS GROWN DRAMATICALLY: OVER 40% OF RUSSIANS HAVE A CREDIT CARD. PREFERRED PAYMENT METHODS #1 CASH 99% OF ALL B2B AND 15% OF ALL B2C TRANSACTIONS USE WIRE TRANSFERS PAY-IN CASH MACHINES #2 CREDIT CARDS MC, VISA, AMEX, DINERS CLUB #3 ALTERNATIVE COD, TNT, SPSR, EMS YANDEX, WEBMONEY, RBK MONEY – PAYMENT PLATFORM QIWI* SOURCES 1eMarketer- B2C Ecommerce Climbs Worldwide, as Emerging Markets Drive Sales Higher, Jun 27, 2013. Includes travel, digital downloads and event tickets purchase via any digital channel. Excludes gambling. 2Source: Euromonitor, 2013. AT Kearney, Online Retail Is Front and Center in the Quest for Growth. Excludes travel. *Qiwi operates a national kiosk network facilitating cash, prepay card, and electronic payments, allowing Russian shoppers to pay for eCommerce purchases. They have expanded operations to offer only payment gateway, similar to PayPal.