Online Food Sales in Russia May Exceed $13 Billion by 2024

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Food goods are the fastest growing sector in Russia’s e-commerce business, Kommersant writes. According to Infoline projections, online sales of food items will exceed 400 billion rubles (over $5 billion) this year, and will approach 1.1 trillion rubles (over $13 billion) by 2024, with the 10 largest firms accounting for over 90 percent of the total.

However, it will be impossible to achieve until the selection, geography, and alcohol delivery are expanded.

Online sales of food goods in Russia rose 2.5 times between January and June of this year when compared to the same period previous year.

According to Infoline, food goods will become a major driving factor in the whole internet industry, with their share growing from 5.3 percent to 18.8 percent.

According to analysts, the COVID-19 pandemic was a driver for the development of online food sales in 2020, with one of the major outcomes being increased customer trust. According to Infoline, consumers have developed a habit of ordering food goods through the Internet.

Analysts estimate that the number of active internet users has increased by more than 40% in the last year, reaching 60 million individuals. Ivan Fedyakov, General Director of Infoline, adding that firms continue to aggressively engage in regional growth and expansion, with some of those producing returns equivalent to Moscow.

Furthermore, rising inflation helps food makers to recoup development costs and expand delivery times, he adds.

However, other things must be considered, as this industry is now unproductive, according to Alexander Shurkayev, NielsenIQ Russia’s head of the online retail department. According to him, based on the experience of other nations, reaching a two-digit market share in Russia in the next two years will be extremely tough. Even with the “phenomenal” outcomes of 2020, the UK has a 12 percent share of the online FMCG market, France has a 10% share, Spain has a 3% share, and Germany has a 1% share.

According to the expert, geographical extension of services, greater range, and the debut of alcohol delivery may spur further growth of online sales.