Ozon will settle in China

Due to the complicated situation with imports from Europe and the withdrawal of some foreign brands from Russia, large retailers and online platforms are looking for new ways to expand the range. For example, Ozon opens an office in China to increase the number of goods from local entrepreneurs on its site. The demand of Russians for goods of Chinese brands, especially in the segment of household appliances and electronics, is really growing. However, experts warn that the marketplace is unlikely to be able to quickly solve the problem of timely delivery of orders due to serious difficulties in the logistics market as a whole.

Ozon Global is opening a representative office in the Chinese city of Shenzhen, the company told Kommersant. The marketplace office in China will be headed by Simon Huang, who has experience in cross-border trade and e-commerce in the US, India and China. Ozon believes that a representative office in China will allow local sellers to increase the volume of cross-border trade with Russia and expand the range of products on the online platform.

Mr. Huang noted that the marketplace plans to attract more than 100 thousand sellers from China and increase the turnover of goods from this country tenfold by 2024. Ozon Global now has over 10,000 merchants. In the third quarter of 2022, turnover quadrupled year on year. According to the marketplace, today the share of orders from China on Ozon Global reaches 90%, and buyers order mainly electronics, small appliances and clothing, the company says. Earlier, Kommersant reported on Ozon’s plans to launch sales of sportswear from Chinese brands Li-Ning, 361, Erke, X-tep and Camel.

Ozon has been developing international business since 2020. Among the company’s key areas are China, Turkey, Kazakhstan, Belarus, India, Korea, Israel, Moldova and Thailand. In 2021, Ozon has a local marketplace and its own logistics infrastructure in Kazakhstan and Belarus. In 2022, Ozon also opened a representative office in Turkey.

The decision to strengthen partnerships with Chinese sellers is justified against the backdrop of growing demand, for example, for Chinese equipment and electronics due to difficulties with importing European products, says Mikhail Burmistrov, CEO of Infoline-Analytics. Data Insight partner Boris Ovchinnikov believes that Ozon is interested in strengthening its presence in China to expand the range on the site through exclusive imported goods. Also, the expert believes, it is potentially possible to establish cooperation with Chinese companies to place orders for the release of goods under Ozon’s own trademarks.

The largest online platforms today are trying to compete with each other due to a unique offer, Mr. Burmistrov agrees. Among such examples, he cites the decision of Yandex Market to buy out all IKEA inventory in Russia or the launch of Ozon to sell original goods from the Swedish retailer H&M. At the same time, Mr. Ovchinnikov notes that the volume of orders for Ozon Global is still incomparably less than for AliExpress. According to him, the main difficulties with the Ozon international platform are the terms and conditions of delivery, which are not always clear to the buyer and many times exceed the delivery times within Russia.

Ozon notes that the average delivery time from China to Russia today is from 14 days, excluding assembly from the seller. To reduce the time, the marketplace launched a partner delivery service, which should allow the company to control all stages of the transportation of goods from China. Delays in the delivery of goods for several days are possible at customs terminals in the Russian Federation when processing imports during the peak season, Ozon says. In early November, the Far Eastern Customs Administration reported that the region’s ports were 95-100% occupied, which risks complicating, for example, New Year’s delivery of goods.

According to the Association of Internet Trade Companies, the volume of cross-border trade in the first half of 2022 decreased by 27% year-on-year and reached RUB 103 billion. This amounted to about 4.7% of the entire e-commerce market in Russia.

Alina Savitskaya