Russian e-commerce company Sbermarket is expecting at least 11-fold growth in its 2020 sales versus last year, as the COVID-19 pandemic triggers a surge in online retail it predicts is the start of permanent change.
Sbermarket, controlled by a joint venture between Russia’s largest lender Sberbank and internet firm Mail.Ru, expects its gross merchandise volume (GMV) - or volume of online sales - to be 11-13 times higher for 2020 than its 1.9 billion roubles ($27.41 million) in 2019, General Director Asan Kurmanguzhin told Reuters in an interview.
He expects less than 1% of purchases this year will be made online in the 10-15 trillion-rouble FMCG sector, or fast-moving consumer goods, which refers to products sold quickly at a relatively low cost, such as food and other consumables.
Kurmanguzhin predicted the online share should reach 5% by 2022 in a sector equivalent in size to Russia’s oil and gas market, although without the benefit of providing foreign currency earnings.
“[FMCG] is one of the largest markets in Russia, it is comparable to the oil and gas sector, to the banking sector and so on... And, as you can see, we are here at the very start of our development,” he said.
If the estimates are right, the online trade of consumer goods in Russia could reach 500 billion roubles annually, compared with the 60-billion-rouble estimates by analysts before the pandemic.
Across the globe, the outbreak has accelerated change.
For Sbermarket, where the shift to online shopping was already underway, the leap in orders after Russia introduced quarantine measures in March meant it took only 71 days to reach 2 million orders after it had taken almost seven years to achieve 1 million.