The Russian online retail sector, which experienced a growth of 2.7% in 2022, reaching a value of $32.3 billion, is on a trajectory to expand by 32.3% to $42.7 billion by 2027. This sector, accounting for 8% of the European online retail market value, is driven by the digital connectivity of the population and a preference for the convenience of online shopping.

Electrical and electronics retail emerged as the dominant segment, contributing 41.1% to the sector’s total value, reflecting the modern consumer’s inclination towards cutting-edge technology and smart products. Despite the robust growth in recent years, the sector faces strong competition due to the large number of players, including domestic giants Wildberries, M.Video, and Ozon.ru, and the exit of major Western brands. This competitive environment is characterized by product differentiation, low brand loyalty, and the ease with which customers can switch between providers.

Inflation posed a significant challenge in 2022, with the rate reaching 13.7%, up from 6.7% the previous year. This economic pressure, coupled with the geopolitical tensions and sanctions related to the Russia-Ukraine conflict, has led to a cautious consumer spending pattern. Yet, the online retail sector has shown resilience, with a compound annual growth rate (CAGR) of 23.9% from 2017 to 2022, outpacing the growth rates of the Czech and Polish markets over the same period.

The sector’s growth is largely attributed to digitally connected Russian consumers, who are increasingly turning to mobile commerce for their shopping needs. Major e-commerce platforms offer a vast range of products, secure payment methods, and efficient logistics, making online shopping a preferred choice for many. The electrical & electronics and apparel retail segments have particularly benefitted from this shift, with revenues of $13.3 billion and $9.3 billion in 2022, respectively.

Looking ahead, the sector’s growth is expected to moderate, with a forecasted CAGR of 5.8% over 2022–27. However, the ongoing popularity of e-commerce, combined with technological advancements in payment and security, points to a thriving future. The e-commerce market value in Russia, which stood at $71.1 billion in 2022, is anticipated to grow to $116.3 billion by 2025, underpinned by an expanding online user base and the evolution of consumer shopping preferences towards digital platforms.