Twenty years after my first visit to Moscow, I see the pieces coming together for a Russian IT success story: a new and thriving e-commerce industry. Here’s an inside look at my visit to the headquarters of a Russian social media giant.
The vibe was Silicon Valley–esque, but this was no Facebook copycat. Fashionably dressed employees sipped lattes in the lobby Starbucks, while others donned in sweats scored goals in the indoor court for five-a-side, a form of indoor soccer. The social media team was young, tech savvy, and excited about their work, and for good reason. Mail.Ru is tackling something that’s eluded social media players around the world. The Russian tech giant has been building an app in app intended to provide seamless integration between its social networking, mobile messaging, content, and digital payment capabilities—all combined into a single user-friendly service powered by artificial intelligence.
As we viewed a series of virtual demos highlighting Mail.Ru’s innovations, two things stood out in my mind. One, I wish I had its app during my 1998 trip to Russia. Two, it was clear that this company—along with an ecosystem of impressive Russian tech firms—is helping build the foundation of a significant e-commerce economy in a region that for years has lagged in online retail.
Will e-commerce succeed in Russia?
Russian consumers are showing signs of preferring online purchases.
Together, firms like Mail.Ru, its IT peers, and various fintech players have been making gradual chess-like moves to capitalize on Russian consumers’ widespread adoption of digital technologies.
So what might the future look like? E-commerce has grown slowly in Russia, but things are speeding up. The region has 63 million online shoppers, compared with 105 million internet users, according to Morgan Stanley estimates. If history is any guide, the demand for online shopping will only grow.
But, it won’t be easy.
What should investors watch for in Russia’s e-commerce industry? Get an inside look at my on-the-ground findings in our new publication, Market Traveler.
WFAM 6-2019 403050