Russian internet companies reach 4% of GDP

Russian internet companies reach 4% of GDP
E-commerce already accounts for 4% of GDP and 4.8% of retail turnover, but is growing ten times faster than the real economy / bne IntelliNews
By bne IntelliNews April 8, 2019

Russia's internet companies account for about 4% of Russian GDP, according to the estimates of the first deputy head of the presidential office Sergey Kiriyenko.

"In Russia, the share of Internet companies is already about 4% of GDP, this share will grow rapidly, since the Internet economy zone is growing several times faster than any other spheres," he said, as cited by Tass on April 8.

Speaking of the regulation of the internet sector, Kiriyenko noted that all large foreign companies entering the Russian market must undertake not to break competition, while the government has to "support our companies and protect them".

As reported this week by bne IntelliNews, the Chinese AliExpress e-commerce major will open its global platform for Russian vendors. The potential upside for Russian online sales abroad is huge, as Russia's online exports of goods could reach $10bn in 3-7 years, according to the estimates of eBay Russia and Emerging Europe cited by Prime on March 28.

The potential upside for Russian online sales abroad is huge, as Russia's online exports of goods could reach $10bn in 3-7 years, according to the estimates of eBay Russia and Emerging Europe cited by Prime on March 28.

Ecommerce is also already eating into the share of retail sales and already accounts for 4.8% of the total turnover in 2018, or RUB1.5 trillion. That number is growing at roughly ten times the rate of the economy as a whole and will double by 2024 to an estimated 8.5%, or RUB2.78 trillion, according to the study by the Gaidar Institute published in March.

Gaidar's study notes of rising rates of internet penetration in Russia to about 70%, but notes that in the past three years the share of those involved in e-commerce plateaued at 35-43% of the population or 41mn-51mn people.

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