During the past year, the Russian sporting goods market saw a 16 percent rise in cross-border e-commerce, as customers are increasingly placing orders at foreign marketplaces, CDEK.Shopping, a Russian logistics company estimated. The company revealed that Russians purchase food additives and sporting goods in massive quantities to improve their performance abroad.
Male customers primarily purchase athletic footwear, while female customers prefer to order goods for yoga and fitness. Among sporting goods brands, Nike holds the leading position in the cross-border e-commerce segment.
The upward trend in cross-border trade generally aligns with the booming online trade the Russian sporting goods market witnessed in the past few years.
As the Moscow-based think tank AKIT estimated, this segment enjoyed a skyrocketing 155 percent revenue growth in 2020, when the Covid-19 pandemic hit brick-and-mortar stores. In 2021, sales climbed by only 25 percent, but the growth dynamics accelerated again in 2022 when revenue jumped by 83 percent compared with the previous year.
The growth trend in the Russian sporting goods market is primarily driven by major cities such as Moscow, St. Petersburg and others. This trend is further believed to be fueled by a relatively high share of counterfeit sporting goods in the Russian market, which prompts customers to seek authentic products in foreign stores.
A recent policy change by the Russian government could potentially disrupt cross-border trade. Effective April 1, the limit on the value of goods for duty-free import into Russia was significantly reduced from €1,000 per customer per month to €200. If the foreign purchase is worth more than €200, the buyer must pay a duty of 15 percent of the cost, but not less than €2 per 1kg. The move will not likely have a tangible impact on the trade flows. Dmitry Kuznetsov, a senior researcher at the Institute of International Economics and Finance, estimated that 98 percent of all parcels Russians receive from abroad were worth up to €200. However, the authorities are considering plans to further abolish duty-free imports, subjecting all orders Russians place in foreign stores to import duty.
On the other hand, this step is expected to discourage a significant number of Russian customers from seeking goods at foreign marketplaces. Alexander Khinshtein, a member of the State Duma, the lower chamber of the Russian Parliament, has recently warned that the Russian state postal service operator Russian Post will see a 20 percent drop in revenue if duty-free imports are abolished.
Image: Дмитрий Хрусталев-Григорьев on Unsplash
