In a bid to seize its share of the fast-growing market of cross-border sales to Russia, major Russian online marketplace Wikimart.ru will begin to sell goods from foreign suppliers to Russian consumers in the first quarter of 2014

The company will sell products from European and Chinese suppliers especially in the categories of sporting goods, children’s goods and household goods, CEO Maxim Faldin told the Russian business daily Vedomosti

Not only will Wikimart sell clothing from foreign online stores on its marketplace platform, but it will also purchase products directly from European vendors and distributors and sell them from its warehouse in Latvia, Faldin affirms that these will be “known brands,” but he did not specify their names.

Wikimart has registered a legal entity in Latvia and rented a 5,000 square meter in Latvia. Foreign players will deliver to the warehouse, and SPSR, a major shipment service company that provides an alternative to the slow an unreliable service of the Russian Post, will ship across the border to Russian buyer. Wikimart is also discussing cooperation with other delivery operators.

Shoppers will use the normal Wikimart site, picking goods from the general product list. The only difference is from what stock these goods will be delivered.

Faldin estimates that an investment of $5.2 million is needed for warehouse organization, platform adaptation and working capital. In comparison, Wikimart spent $360,000 for the organization of its Russian warehouse.

Wikimart will later launch cooperation with Chinese retailers, and, for this, the company is planning to organize a logistics hub in China. Faldin has not yet disclosed other details on the Chinese project.

If you can’t beat them, join them!

Faldin considers the rapid growth of cross-border sales to be a long-term trend, “and most importantly it is not only and not so much about price differences but about a fundamental difference with a wider selection of products.”

Faldin said that Wikimart’s turnover is growing “at 90% per year,” compared with a 30% average in the Russian e-commerce industry. Next year, the company expects to grow even faster “with cross-border sales included in this growth.”

KupiVip.ru, Russia’s leading flash sales sites, has made a similar move. After complaining about unfair competition from foreign sites that benefit from what it called “duty-free e-commerce,” KupiVip.ru started to organize cross-border sales on its own site.

The volume of Russians’ purchases in foreign online stores in 2013 may reach $3 billion in 2013, according to a soon-to-be-released study by East-West Digital News.

  • Foreign online retailers selling to Russian consumers or considering doing so are invited to take part in EWDN’s survey on this topic, in partnership with Ecommerce-facts.com and the E-Commerce Europe association. Participants will receive a free executive summary that includes the main findings of EWDN’s final report on cross-border sales to Russia.