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A growing number of Chinese e-commerce companies are selling products on Russia’s largest online marketplace, as exporters increasingly use these platforms to find new markets and avoid Western tariffs.
Ozon Global, the international version of one of Russia’s largest e-commerce platforms, gets 80% of its orders from China and told the Financial Times it had signed up at least 100,000 Chinese sellers. In 2022, the number of sellers in China will be approximately 10,000. Wildberry, the largest platform by sales, said it officially launched a pipeline for Chinese sellers last year, and industry insiders confirmed growing interest in selling on the platform.
Several Chinese suppliers said that in addition to opening accounts on the site’s dedicated international platform, they also registered local Russian e-commerce stores – a process that required opening a Russian bank account, paying domestic warehouse fees and receiving payments in rubles.
Chinese suppliers say they are eager to fill the void left by the withdrawal of international business from Russia following Moscow’s sweeping invasion of Ukraine more than two years ago. They added that China has become a source of alternative demand as Western markets including the European Union and the United States begin to close lucrative tax loopholes, boosting the country’s e-commerce industry.
“Because it’s fair to say that the U.S. and European markets are now affected [negatively] And because China and Russia have very good relations, everyone is increasing investment. [in the Russian market]” said Yarong Wuliu, deputy secretary-general of the Cross-Border E-Commerce Branch of the China Association of Small and Medium Enterprises, who helps small and medium-sized enterprises looking to open accounts on Ozon.
Official data shows that in the first six months of this year, China’s e-commerce trade volume increased 13% from the previous year to a record 125 million yuan ($175 billion), accounting for 5.9% of total imports and exports during the same period. Official data shows that e-commerce will grow by 15.6% in 2023, accounting for 5.7% of China’s total trade in goods, up from 4.9% the previous year and 1% in 2015.
Henry Ko, a law professor at Singapore Management University, said bilateral e-commerce trade has been growing rapidly. “As for China, [it’s] The downturn in mature markets such as the United States and the European Union, especially as they strive to reduce their dependence on China and even ban certain Chinese shopping platforms,” he said. “On the Russian side, China is basically their only lifeline given all these sanctions.”
Mr. Wei, a Shenzhen e-commerce trader who asked that his full name be withheld, said that two years ago, as a recent college graduate, he opened a store selling consumer electronics on Ozon Global.
“We only have the market because the United States has imposed sanctions on Russia,” he said. “Compared to other platforms, it’s pretty good. The profit margins are decent… The competition is not that fierce.
However, sellers have complained about difficulties in receiving payments in yuan after sanctions were imposed on Russia. From time to time, Ozon prohibits the sale of certain items on its cross-border pipeline to ensure compliance with global legal requirements. But Wei and others say they have successfully avoided both problems by opening locally registered stores.
Popular posts on Chinese social media platforms, including Instagram-like Xiaohongshu, detail the benefits of opening an account on Ozon Local Live. Others advertised services for opening Russian bank accounts and registering local businesses. One such account contacted by the Financial Times said they could register a Russian company to run a local e-commerce store for about 30,000 yuan.
If the cost is higher, the company could also try to find a Russian legal representative to serve as the company’s nominal head, they said.
The person added that demand for Russian business registrations is driven by e-commerce merchants, mainly Ozon and Wildberry, and has begun to grow since the country’s war with Ukraine began.
Eason Chan, who runs a Sino-Russian logistics company in Shenzhen, said demand from e-commerce sellers looking to open local stores has begun to outstrip business from traditional trading companies. “All I can say is [demand] will continue to grow,” he said.
Ozon said that overseas sellers only account for 5% of its total product series, and it does not support Chinese sellers’ imported goods for sale in Russian stores. It added that all sellers are now receiving payments on time.
Wildberry said it was “evaluating the China market through a limited number of local manufacturers and sellers who can directly supply products to all countries in which the company operates”.
Jen Yang, an e-commerce store selling furniture and homewares, said she opened the Ozon store in 2022 after selling exclusively on Amazon for three years, hoping to meet Russia’s unmet demand for daily necessities.
She said she now earns about 20,000 yuan a month from store sales on the platform, which accounts for about 30% of her e-commerce sales.
While she has also opened two Ozon stores in the country, she is still “testing the waters” given concerns about converting profits back into yuan, but added that overall demand in Russia is quite strong.
“China is a manufacturing powerhouse, so basically we can sell whatever they need,” she said.
