Alice Barat, Principal consultant at digital commerce solutions company Tryzens.
As the Russian government prepares to further regulate and tax international ecommerce, some British etailers should estimate more conservative sales from the region.
Currently online purchases of around €1,000 (£820) and over made by Russian shoppers from non-Russian brands have a duty charge levied on them. If the new regulations are put in place, the threshold will fall to about €150 (£123), meaning many more online purchases will incur this extra cost. The proposed regulations have been suggested as a benefit to local retailers, as well as a source of income for the government.
Russia now accounts for more than 13% of European internet users and this, combined with rising disposable incomes in the country, has encouraged many British retailers to invest in ecommerce for the Russian market, along with other Bric countries.
While Russia is a growing market with increasing amounts to spend on non-essential items, a tax on the mid-range price bracket will be a deterrent to some shoppers, who will be able to buy from Russian brands without incurring extra costs. This may affect mid-range British brands.
However, retailers shouldn’t write off the Russian ecommerce market. Our experience with many of the brands we work with is that the average international spend from a Russian consumer is rarely higher than the new suggested limit of €150, so sales from these buyers should not change. At the other end of the scale, the Russian super-rich who are after high-end British heritage brands are unlikely to be put off by an additional tax.
Since British brands remain the most searched for overseas (as reported by OC&C Strategy Consultants), most Russian consumers won’t be wholly discouraged from buying British.
Those brands that sell items around the €150 threshold should take this deterrent into account for now. However, as cross-border commerce gains momentum internationally, regulations that hamper this may not be in vogue for long.