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4 Apr, 2007 12:01

More Russians to explore e-commerce pros and cons

More Russians to explore e-commerce pros and cons

Russia's leading online shopping site Ozon has received $US 18 MLN of international investment. Even though less than 20% of Russian homes have internet access, e-commerce is growing fast.

E-shopping is a global trend. In Russia Ozon is the largest Internet shopping site selling everything from books, to DVDs, to soft furnishings.

“We have 1,500,000 registered users on our website. If you talk about active buyers, the figure goes down to about 600,000 who've purchased in the last 6 months,” says Bernard Lukey, Ozon CEO.

The company celebrated its ninth year in the business this week by announcing it has attracted $US 18 MLN of investment, with Swiss-based venture capital fund, Index, putting in the most cash.

E-commerce is on the rise all over the globe, as more and more people get connected. More than 70% of Americans are using the Internet. Across in Europe, around 60% of Germans and Britons are online.

It's a different story in Russia. Less than 20% of Russian households have internet, though the number is growing. The vast majority of people are still shopping the traditional way. Russians are also reluctant to pay via plastic. 70% of Ozon's sales are paid for by cash-on-delivery.

But its new foreign investor says that'll have to change.

“Today as I understand, there are a number of ways that these payments are regulated. If you can go more into credit cards you can avoid that. Or you can go into other types of payments. In Europe, we have bank transfers and postal payments – lots of ways to pay for your online orders apart from cash-on-delivery,” believes Index’ Giuseppe Zocco.

The issue of legislation is actually wider than that. There is still no law regulating the e-commerce in Russia. So, although investors may be very certain of the profits for now, the connection is not yet entirely secure in the long term.