Executive Profile Series with Anna Kuzmina from Yandex.Money

by Anna Kuzmina 0

PaymentsJournal sits down with Anna Kuzmina from Yandex.Money to discuss Cross Border E-Commerce Market in Russia: How Merchants Accept Payments and What Consumers Buy

One of the most perspective and mysterious e-commerce markets – in Russia – just for last two years has attracted a bunch of international retail giants. Payment Journal has asked Chief International Officer at Yandex.Money Anna Kuzmina when Russia became so attractive for cross-border e-commerce foreigners, and what they need to know before entering the market.

PJ: Anna, could you tell us more about the Russian e-commerce market? Since the country’s economy is struggling, European and American companies might be wary towards the market.

AK: Almost one year passed after sanctions were implemented but we do not see changes so far. Attention from international online retailers is still growing. However, it is expected that first Chinese online stores took advantage of the situation. For instance, at the moment e-commerce Chinese giants Alibaba and JD.com are on the Russian market together with around 40 other players. Nevertheless, European and American online stores are also in our focus and we will announce several partnerships soon.

PJ: How do Russians pay for goods online, especially for those that are delivered from outside the country?

AK: For Western markets it will be a surprise that most of Russians prefer to pay right after delivery rather than before it. This practice established in the country because of the distrust among consumers towards online shops although it keeps going down every year. With respect to international stores, the situation is completely different – shoppers pay in advance which means that they have more trust for foreign merchants. For payments Russians mostly use bankcards or e-wallets. Although the purchase delivery can take three weeks, Russians are ready to wait because of the large assortment, better quality goods and often the lower prices as recent polls have showed.

PJ: What kind of products are the most popular among Russians, who buys goods on the international online stores?

AK: This year Yandex and a think tank GfK have already arranged a research to answer this question. The data showed that product categories most popular among Russian consumers are clothing, makeup products, perfume, accessories and products for children and babies. International product offers in these categories are currently available on Yandex.Market – a market place, where users can easily find everything they want and compare prices, for instance.

PJ: Yandex.Money is a very popular e-wallet among Russians. In terms of merchant business, is e-wallets is the only product of yours, which they can get access to?

AK: Indeed Yandex.Money has started with e-wallet, however, it has changed and now we also offer merchants Yandex Payments Solution. By using this solution, any online store, vendor or charity in Russia (and some other countries) can easily add all the most popular payment methods to their website and expand payment opportunities for their clients. Yandex.Money universal payment solution includes payments with a bankcard, Yandex electronic money, cash transactions via payment terminals and mobile payments. Yandex.Money has the perfect experience with retail payments to launch its own solution for online stores. In addition, the company has a huge ecosystem of Yandex itself and the largest Russian bank Sberbank that are the owners. We also have the exclusive right to offer merchants to get access to online banking of Sberbank via which users can pay on the site of a store. Around 70% of Russia use Sberbank’s services.

PJ: What is the position of Yandex.Money on the market?

AK: Over 80% online stores on the Russian market use Yandex.Money to accept payments: Yandex Payment Solution or just e-wallet of Yandex.Money. Our data has showed that among those stores there are plenty of foreign ones – 50% of retail payments on the service are international. In fact, online stores indeed want more and more to accept payments via payment aggregators like Yandex Payment Solution. For instance, our recent research showed that about a half of online shops adopt payment solutions.

PJ: One of your recent reports shows that merchants accept many different payment methods. Why is the Russian market so diverse?

AK: It is a good and a complicated question at the same time. Surprisingly, in this country e-wallets appeared even before bankcards nearly 15 years ago. At that time e-wallets were more suitable for making online payments rather than bankcards. It is hardly believable, I know, but it is the truth. Bankcards were absolutely unadapt to the Internet. While bankcards were trying to reach the audience, e-wallets already did that – users have already got used to them along with offline payments kiosks. As a result, the market of payments is so diverse now and merchants have to provide consumers with all payment methods in order not to lose a single customer. We have explored this situation on the market and have found out that a store which accepts all payment major methods (bankcards, e-wallets, offline payments kiosks) increases its conversion into an actual purchase by 10-15%, which is a significant share.