Goods from the CIS increasingly dominate e-commerce in Russia

With the Western sanctions and ensuing logistics challenges, the list of countries that Russia imports goods from has been shrinking significantly since February 2022. At the same time, the EAEU bloc (Belarus, Kazakhstan, Kyrgyzstan, and Armenia) is playing a more prominent role now.

Requests for import financing show a significant increase in the share of imported consumer goods from those countries. According to the Tochka fintech company, Kyrgyzstan entered the top five supplier countries for Russian retailers for the first time over the past year. The country’s share in the total volume of products sold in marketplaces in 2022 amounted to 11%. Belarus, in turn, is noticeably ahead of Singapore as a supplier country, with the share of sales of Belarusian goods at 25% (13% in 2021 and 11% in 2020), although Belarus is also under severe Western sanctions.

Growth points

There are several important reasons for the growth of supplies from the former Soviet countries.

First, parallel imports are a major factor in this growth. Goods are delivered via Belarus and Kyrgyzstan when manufacturers refuse to sell them to Russian retailers. According to Tochka estimates, the share of imports from the United States dropped from 8% in 2020 to 5% in 2022 and from Singapore, from 10% to 7%. The share of EU countries (France, Poland, and Latvia) is below 1%. Before the February events, imports from those countries were quite prominent in Russia’s e-commerce sector, and substituting the required volume of high-demand goods, such as electronic gadgets, car parts, and tools, is hardly feasible. Most likely, the goods that Russian consumers use will be replaced by analogs produced in Asia.

Second, the ruble is exceptionally strong relative to the national currencies of Kazakhstan, Uzbekistan, and Belarus. This means that goods can be supplied to Russia from those countries at more competitive prices.

The third reason is the logistics problem. Most new supply channels go through neighboring countries, which view Russia as a close and understandable market.

Marketplaces have noted an increase in the number of sellers over the past year. Almost all the websites announced a significant increase by the end of 2022. At the same time, it is difficult to estimate the turnover of new sellers at this stage to assess whether marketplaces are adding large or small businesses. Many Russian entrepreneurs are yet to join online marketplaces, and many are trying to enter the market, failing and making repeated attempts. In any case, the potential of e-commerce for sellers is far from exhausted; so, by the end of 2023, there may be a two-fold increase in their number.

What next?

Amid the tightening sanctions, imports to Russia from the former Soviet republics will only grow. Belarus and Kazakhstan will remain the largest suppliers. At the same time, imports from those countries will not fully replace the shares of goods from China, Turkey, and a number of other foreign countries that currently prevail.

It should not be expected that the goods imported from the former Soviet countries will be inexpensive. Due to rearranging logistics chains, connections with suppliers and changing payment procedures, Russian importers will sustain additional costs.

Russia’s existing SME support system hardly even stimulates the growth of small and medium-sized businesses. Loans for small companies are still unavailable as banks maintain restrictively high interest rates. The existing measures of support aimed at providing affordable funding to SMEs require substantial scaling. In particular, sellers are in need of special instruments such as non-targeted financing, renewable funding lines, etc. Developing new supply chains will be problematic without affordable money.

In the past year, sellers have tended to expand their presence on various platforms, attempting to retain their positions on several major marketplaces, a task that will be increasingly more challenging as sellers’ competition multiplies along with their expenses. Forecasting is becoming more important when it comes to planning stocks, managing procurement and most effective competitive pricing. Entrepreneurs will have to move towards highest possible automation, relieving the operations burden and more meticulously analyzing sales.  

By Marina Kashina, co-founder and CEO of

Previous ArticleNext Article