Eastern Europe & the CIS
The Region
In Eastern Europe and the Commonwealth of Independent States, the value of e-commerce is growing at a rate of 14%. This is eye-opening, given that recent months have been challenging in the region. In October 2019, the World Bank revised its forecast for the Russian economy, predicting it would grow by just 1% rather than 1.2% as previously forecast. The Ukrainian economy was expected to grow by around 3% in 2019, down from 3.3% in 2018. In Romania, the economy was expected to grow by 4% in 2019; respectable yet significantly down on the incredible 7% growth rate posted in 2017. The region covered by this report is large and diverse. But in all the countries, despite global headwinds, economies and e-commerce markets are showing strong growth.
The Eastern European
Payment Landscape
The Local Payment Culture
The most common payment method across the region is credit or debit card — used in 34% of all online transactions. However, this average figure hides wide regional discrepancies. In Kazakstan, for instance, consumers pay for 60% of online transactions with cash and only 20% using a card. In Latvia, these figures are almost completely reversed, with consumers using cards in 49% of e-commerce purchases and cash in just 12.5%. Even when a large percentage of transactions are paid for by card, the cards used may be local, rather than the big international brands. In Russia, for instance, 20% of the card market has been captured by local schemes.
The E-Commerce Market
To understand what was happening in e-commerce in Eastern Europe and the Commonwealth of Independent States, PPRO researched eleven of the region’s most promising markets. These markets were Bulgaria, Estonia, Kazakhstan, Latvia, Lithuania, Romania, Russia, and Ukraine.
E-commerce in these markets is growing at an average rate of 14%. 5% of all retail sales are made online. The average online consumer spends $702 a year. The growth in e-commerce is driven by the same factors as in other markets — the increasing ubiquity of high-speed Internet, consumer price sensitivity and the improvement in delivery networks. For the region as a whole, 21% of all online sales were cross-border.