Marketplace sellers have a growing demand for intermediaries in China
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The demand of small and medium-sized businesses in the Russian Federation for intermediaries to work with counterparties from China is growing at a record pace. We are talking about a whole range of services – from searching for manufacturers of goods in demand in Russia, their delivery to setting up payment processes. According to the observations of market participants, the popularity of intermediaries began to grow especially quickly after Chinese banks began to limit settlements with the Russian Federation. There is no shortage yet – supply is growing even faster than demand.
From March 2023 to March 2024, the demand of Russian small and medium-sized businesses for the services of intermediaries, helping to purchase goods in China, arrange their delivery and make mutual settlements with manufacturers, increased by 97%, and the supply of such services – by 112%. This is stated in the Avito Services study, which Kommersant has. The most noticeable increase in demand is observed in Kazan (6.4 times), Krasnoyarsk – by 156%, Ufa – by 128%, Rostov-on-Don – by 127%, Moscow – by 96%, St. Petersburg – by 92% .
Requests for organizing cargo transportation from China have also increased, Avito Services analysts note. In the country as a whole, demand for the service increased by 20% year-on-year, but in individual cities it reached record levels, for example, in Rostov-on-Don (an increase of 212%), Omsk (by 174%) and Nizhny Novgorod (by 164%). %).
The demand of small and medium-sized businesses to work with counterparties from China fits into the general environment. According to Infoline-Analytics, trade turnover between the Russian Federation and China at the end of 2023 generally increased by 26.3%, to $240.11 billion. China’s exports to Russia increased by 46.9%, to $110.97 billion, imports from the Russian Federation – by 12.7%, to $129.14 billion.
China accounts for a significant share of supplies of consumer goods, electronics and components for them, as well as cars to the Russian Federation, states the General Director of Infoline-Analytics Mikhail Burmistrov. The Russian office of Leroy Merlin notes that about 20% of imported goods in categories such as power tools, lighting, and garden equipment are made in China.
Nadezhda Vinogradova, head of seller research at Data Insight, believes that the growth in demand for intermediaries and delivery from China is influenced by an increase in the number of sellers on the largest marketplaces – and these are, as a rule, representatives of small and medium-sized businesses.
The president of customs broker KBT, Yulia Shlenskaya, connects this with the search for alternatives and analogues of European goods in Asian markets. According to Data Insight estimates, at the end of 2023, about 450 thousand sellers were selling their goods on Wildberries and Ozon, and by the end of this year their number could reach 700 thousand.
Ozon calculated that in 2023 their sellers delivered five times more orders from China and Turkey to the Russian Federation than in 2022, and their turnover tripled. The company adds that in 65% of cases, goods from these countries are purchased by residents of small Russian cities, for whom price is much more important than delivery time. Other marketplaces declined to comment.
At the same time, problems arise when working with counterparties from China; for example, Chinese banks currently do not accept transfers in yuan from the accounts of Russian banks, notes Deputy General Director of NC Logistic Artem Vaskanyan. This, according to him, has recently aroused the interest of the same sellers working on marketplaces in intermediary services when working with manufacturers from China.
In the current situation, intermediaries have to, according to Mr. Vaskanyan, “look for alternative ways to transfer money, thereby increasing the cost of goods and services.” Yulia Shlenskaya adds that delays in payment by importers lead to pauses in delivery requests.
Nevertheless, China remains one of the most accessible countries for searching and purchasing goods, and the possibility of ordering from there through intermediaries further simplifies business processes, Nadezhda Vinogradova believes. The Russian Leroy Merlin, however, believes that in the next two to three years the share of the same Chinese goods in the DIY segment will “rapidly decline due to import substitution programs of retailers.” Now the share of local goods in the network already exceeds 70%.
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