eBay Extends its Global Shipping Program to Russia

e-commerce international expansion

eBay sellers will soon have an easier way to ship products to Russian buyers.

Consistent with eBay’s drive to expand its presence in Russia, the company announced that its Global Shipping Program will extend to Russia as of September 23rd.

Russians are avid cross-border shoppers and eBay claims that it sold about US$400 million worth of goods to Russian buyers in 2012. Cross-border sales account for about 10% of total online sales in Russia.

Through Global Shipping Program, US-based sellers need only send their products to a US-based aggregator, which will then assume the responsibility for delivering the items to the buyer in Russia. eBay has partnered with Pitney Bowes to offer this service globally, including to Russia. Of course, this will involve additional fees for the buyer and less competitive all-in pricing for the seller, but on the positive side, there will be certainty about an order’s complete, landed cost in Russia.

Generally, the most economical method for sending parcels overseas is the US Postal Service. While it’s quite reliable in general, the issue in Russia arises when the parcel is handed off to the Russian Post for delivery within Russia. At this stage, the parcel enters a “black hole” as the Russian Post does not regularly update the parcel’s tracking information and provides shockingly poor and rude service for individual customers who might dare to visit their local post office in person to inquire about a parcel’s status. Moreover, if a parcel is not sent with a tracking number, the chances of it going “missing” during the Russian Post’s handling of it are about 50-50 (based on personal experience, this is even higher).

"Excuse me, could you update me on my parcel's status?"

“Excuse me, could you update me on my parcel’s status?”

While extending the Global Shipping Program to Russia is welcome news for eBay sellers and Russian buyers, the stumbling block over online payments still persists, given that payments on eBay’s platform are heavily tied to PayPal. Apart from the fact that most Russian buyers prefer to pay cash-on-delivery for their online orders, PayPal itself has been a laggard in the Russian online payments market, and is only now at the point of introducing local currency payments in Russia.

The preference to pay COD is particularly acute in the fashion and soft goods segments, which eBay claims is its most popular category, where roughly 80% of Russian online orders are paid on a COD basis.

So, for the moment, Russian-based online sellers retain a huge advantage due to their ability to offer more flexible payment options.

The full announcement by eBay is here.

 

 

About Leighton Peter Prabhu

I am a partner in Interstice Consulting LLP and head of the Russian office. My practice focuses on e-commerce business and marketing consulting, especially for foreign e-commerce brands entering the Russian market. I also serve as a consultant to some of the largest international portfolio investors in Russian equities (both public and private). You can find out more about my background and business interests on LinkedIn. You can also connect with me on Twitter and on Google+.

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