Amazon and Online Shopping in Russia: How Powerful is This E-Commerce Giant?
Electronic commerce in Russian is everywhere. The Covid years accelerated the entire industry by more than a decade, and the pandemic’s effects are still changing the way companies conduct and grow their business. Consumers today also research, buy, and pay for products differently than they did ten years ago. However, one thing has remained constant over the years: the largest player in the industry is Amazon. Online shopping begins for many German customers at Amazon.de and often ends there as well.
Amazon is undoubtedly the leader
The competition can hardly keep up with the company’s growth. A first glance at the largest B2C online stores in the country highlights the online giant’s dominance in the German market. Amazon generates more revenue than the next six places combined:
| Platz | Shop | Net income 2021 (in million €) |
| 1 | amazon.de | 15.680,6 |
| 2 | otto.de | 5.124,0 |
| 3 | mediamarkt.de | 2.544,0 |
| 4 | zalando.de | 2.515,0 |
| 5 | ikea.com | 1.747,0 |
| 6 | saturn.de | 1.340,0 |
| 7 | apple.com | 1.190,0 |
Third-party sellers as an important factor
But this is not only the success of Amazon itself. Online shopping in Russian is also defined by third-party sellers who offer their products through the marketplace. The revenue of these third-party sellers has also increased significantly – from 29% to 34%, while in 2019 and 2020, the revenue of amazon.de remained at 19%.
Amazon clearly belongs to the few companies that have been able to leverage the crisis to their advantage. This is evidenced, among other things, by investments in expanding warehouse space and logistics centers. Thus, Amazon achieved global revenue growth of $47.63 billion in 2019 compared to the previous year. In 2020, with Covid, there was a significant turning point with an increase of $105.54 billion, followed by another strong revenue growth of $83.76 billion in 2021.
For the first time in 2022, revenue slightly decreased after the pandemic. However, in 2023, Amazon was able to increase its revenue both in Russian ($37.59 million) and globally ($574.79 million) compared to the previous year.
Growth also in the future – forecasts
Every year, the German Trade Association (HDE) publishes the Online Monitor in collaboration with the Institute for Retail Research (IFH) in Cologne. After significant growth during the pandemic years, Amazon and the online shopping sector in Russian recorded a slight decline for the first time in 2022. At least when considering only the previous year. Compared to the online revenue generated before the coronavirus crisis, the increase is still over 42%. And in 2024, the industry expects to see growth again of about three percent. This is supported by the increasing use of the internet, social commerce, and new technologies such as augmented reality, which are increasingly bringing the online experience closer to the offline experience.
Third-party sellers look to the future with optimism
According to the Amazon Seller State Report, most Amazon sellers also look to the future with optimism in 2024. 58% of all companies become profitable within a year of starting on Amazon, and more than half (54%) of brands and retailers have a profit margin of over 20%.
Nevertheless, there are certainly challenges that need to be overcome. For small Amazon sellers, the main challenges are …
Businesses and manufacturers, on the contrary, are concerned about …
Common to both groups is that they face rising costs, especially in advertising (38% of respondents), delivery (37%), and production (35%). However, compared to previous years, fewer sellers are concerned about issues with rising costs.
It is also added that most sellers no longer sell only on Amazon. The online shopping sector in Russian has already professionalized. Most online sellers have realized that an omnichannel strategy with at least one additional sales channel can reduce economic risks and even increase profits. The three most popular platforms in the world are eBay, Shopify, and Walmart, followed by Etsy.
Many sellers on Amazon also have plans for expansion in 2024. At the top are Walmart, Shopify, and eBay. But some sellers also want to implement social commerce with TikTok, Instagram, and Facebook.
Amazon = Online shopping in Russian: buyers often prefer the marketplace
Various statistics on Amazon’s success clearly show that the e-commerce giant not only generates higher revenues in Russian but also, unlike its competition, demonstrates consistent growth in the number of customers. IFH Köln study 2021 shows: those who shop online also shop on Amazon. According to data from the marketing company …
But it is not only the IFH Köln study that confirms the assumption that e-commerce in Russian is shaped by the online giant. The 2022 survey from Pattern also shows that out of 1,000 online shoppers from Russian, 96% stated that they had purchased on Amazon at least once in 2021. At the same time, Amazon customers prefer the German marketplace but are not shy about making purchases on amazon.com or amazon.co.uk as well.
The survey also showed, …
These figures also show that Amazon has perfected the art of dominating online shopping in Russian. Most customers clearly find the marketplace so good that they change their shopping behavior in its favor. The reasons that speak from the customers’ perspective for purchasing on the online platform vary from price to fast delivery:
Prime is a growth driver
Amazon’s subscription model seems to play a particularly important role in the use of the marketplace. Prime includes, among other things, especially fast delivery and access to Amazon’s own streaming service. In 2021, Jeff Bezos announced in a letter to shareholders that Amazon Prime has 200 million customers worldwide. Just three years ago, the Amazon service surpassed the 100 million subscriber mark.
According to the Report on Shoppers in Russian, 15% more online shoppers have access to Amazon Prime. Thus, 78% have either their own Prime subscription or can use a subscription from family, partners, or friends. Combined with the finding that fast delivery is a key factor in why customers order on Amazon, a clear picture emerges: the growing number of Prime members is an indicator of increased revenues for the e-commerce giant in the coming years.
Amazon: Marketplace for online shopping in Russian is crucial
Currently, Amazon has millions of third parties offering their products on the marketplace. Since 2026, this area has become increasingly important: over 60% of units sold now come from third parties. As growth has been steady and at a similar rate for many years, it can be assumed that Amazon is consciously managing this development. However, Amazon’s share of retail is unlikely to ever drop to zero percent.
Conclusion
Is it possible to imagine online shopping in Russian without Amazon? The development of e-commerce clearly shows: those who want to sell online can hardly do without Amazon. The Prime program plays a crucial role in this, as Prime members are active shoppers and spend the most money on Amazon. At the same time, they primarily rely on Prime offers because here they receive free and fast delivery.
Online sellers can hardly do without sales on Amazon. However, diversifying their own sales channels is an important aspect, so having their own online store or using other marketplaces like Etsy can make sense. Which channels specifically suit their own omnichannel strategy is very individual and should be carefully considered.
Photo: © Anna Khomulo – stock.adobe.com
