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When people think of online shopping today, paying for goods or services via the internet usually comes to mind. However, in Russia this is not the case. More than 80 percent of transactions at Russian online megastores are in cash. Russian customers are not very comfortable with online transactions so businesses in Russia have developed alternatives for the online shopping model.
The first method provided by Russian businesses uses online orders but in a different fashion than most consumers are used to. Russian customers place an order online, and then go to a pick-up point to see the goods. After making sure the product is what they wanted, the customers pay for the good and the transaction is finally complete. Another surprising yet popular way of shopping online in Russia involves the use of a phone call. Customers would find an online shopping website and call them to place an order. The ordered goods are then delivered by a courier and the customer pays for the order in cash upon delivery.
Russian consumers prefer these online shopping methods for many reasons but one of the most important reasons is the fear of credit card penetration. With the alternative online shopping methods, credit card penetration in Russia is much lower than other countries as most Russian online transactions involve cash payments. Another major reason Russians avoid shopping via the internet is a history of doubt. When online retail started in Russia several years ago, many companies did not fulfill orders, goods were damaged, or the company suddenly disappeared overnight. Today, online retailers in Russia are trying to rid these fears and gain consumer confidence in online payment procedures.
Many online stores are setting up 24/7 call centers to provide quick customer support and provide Russian customers with personal interaction. This procedure will allow customers to build trust with online retailers. Other companies resorted to offering discounts to the customers who pay for goods and services online. These efforts to gain customer trust and support seem to be working. According to Data Insight’s forecast, the number of online shoppers in Russia will increase by 120 percent over the next five years. This signifies a market growth of an amazing 145 percent. Despite several obstacles, the future seems to be bright for the Russian online retail market.
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