Today I want to share some numbers for 2011 and fresh data reported from different sources for 2012 that shows unprecedented, double digit growth of RuNet, Russian Internet eco-system, and what potential it presents to those who are willing to conquer this very attractive market.
Unfortunately, this year I wasn’t able to go to Moscow to participate in RIF+KIB, major annual Internet conference in Russia. But I was able to check video broadcast recording of the most of the presentations (they were available even in HD format!) to get fresh information about Russian Internet market and its dynamics.
In June I was participating in International Search Summit in Seattle where I heard the speech of Preston Carey, US Business Development Director for Yandex, who presented a great overview of Russian Internet, Yandex and its target markets, as well as sharing tips for running effective SEO and PPC campaigns.
In last twelve months Yandex had a successful IPO on NASDAQ, started its expansion into foreign markets including Turkey and the Czech Republic, got partnership agreement with Twitter, and launched several interesting products and services to Russian audience that include Yandex.Webmaster tool, Search Retargeting, Search Suggestions to search queries, Yandex.Disk (free storage service), Real-Time Bidding (RTB) for display advertisement, Navigator (a free mobile application for drivers), Taxi Booking Service and many other.
One of the interesting facts I’ve learned was that, while Yandex continues to be the most popular search engine in Russia, its market share dropped to about 60% from 65% in 2011, and Google was able to increase its share from 20 to 25%. Kudos to Google-Russia team for pushing hard and getting more weight in this important region!
Last fall Russia has finally became an absolute European leader in online audience and now ranked #6 in number of Internet users worldwide.
At the KIB+RIF 2012 Sergey Prugotarenko, president of the Russian Association of Electronic Communications (RAEC), announced that the audience of the Russian-speaking monthly Internet audience (age 18+) has grown to 57.8 million people, which is 15% higher than the last year, with 44.3 million people using Internet daily. By the end of 2014 this number is projected to grow up to 80 million users per month, close to 71% of Russian population in 18+ age group.
Most of the growth (+16% comparing to 2011) occurred in regions outside Moscow and St. Petersburg, two major cities in Russia with highest Internet penetration level that has reached 76%.
Overall Russian-speaking audience (including users in Ukraine, Belarus and residents in other foreign countries) is estimated at around 80 million users.
Current Internet penetration in Russia has reached 51% mark and is bigger than in China and Brazil, two other fast growing markets.
Following global trends, Mobile Internet in Russia is gaining huge popularity and became one of the major forces behind the Internet audience growth in Russia, growing two times faster than growth of access through desktop PCs. About 33% of Russian Internet users have access to the web through mobile devices like iPhone and other smartphones, and 20% of them use Mobile Internet daily. Considering that rural areas have pretty good level of mobile network coverage, mobile Internet access also allows regional users to reduce the level of inequity in Internet access comparing with users in major Russian cities.
iPads and other tablets are gaining more popularity in Russia and fuel further growth of Mobile Internet, with about 7% of Internet users reported about having access through tablets.
About 30% of all mobile applications downloaded by Russian users are products of local developers, with overall sales estimated at 300 million USD.
Russian online advertisement market in 2011 was 42 billion RUB (or 1.08 billion EUR), with 56% growth compared to 2010, which made it the most dynamic market in Europe.
The volume of E-commerce has increased by 30% and reached 310 billion RUB (7.97 billion EUR). Most of the growth occurred in such important for Russia industry as travel, with 86 billion RUB spent on airfare and train ticket online purchases (+45% comparing to 2010)
14 million users made purchases at least once in 6 months period.
125 billion RUB (+80%) were spent through major online payment systems like WebMoney, Yandex.Money, RBK Money, MoneyMail.
Online gaming industry has shown a very rapid growth – 38 millions of active online players (+171% comparing with 2010) – with spending close to 7 billion RUB (179 million EUR).
According to RIA news’ information from Sergei Plugotarenko, 99% of RuNet users engaged with at least one of many social networks available in Russia.
Odnoklassniki.ru continue to be the largest social networks (73%) followed by VKontakte (62%) and MoiMir (31%).
Twitter presently has more than 1.7 million Russian users and shows over 50% growth in last 6 months (comparing to 1 million users reported by Yandex in July 2011). I think partnership with Yandex will definitely help Twitter’s popularity growth in Russia.
Facebook audience in Russia continues to grow and estimated at 18% of all RuNet users. That’s pretty impressive growth comparing to just 5% back in 2010.
Google+ seems to be growing pretty well in Russia as well, with the number of Russian Google+ users reached 1.4 million mark.
In February 2012 Yandex launched People Search service that allows search of person through social network profiles open for indexing. LiveJournal, Twitter, Facebook provide data feeds to Yandex, and other social networks like Odnoklassniki.ru and VKontakte provide info through indexing of open public profiles.
In January 2012 Mail.ru has launched new service called Futubra.com. As per Futubra’s description, this service seems to be a hybrid of Twitter and Facebook. Apart from normal “tweets”, Futubra’s users are able to share pictures and video, read news, and create events and groups. Just like Twitter, Futubra will allow its users to subscribe for other people feeds without becoming “friends”.
Futubra team also created free apps for iOS, Android, Windows Phone 7 and Symbian at the same time as the web-based service. It is hard to predict what future holds for this new multimedia blogging service, but integration with large social networks like Odnoklassniki.ru and Moi Mir owned by Mail.Ru will definitely help its growth in popularity.
As we can see, the Russian online market is still growing really fast. This fact should be taken into account by companies that want to enter new markets. While doing business in Russia is still full of challenges coming from legal complexities and dominance of local players, the perspective of growth both Internet audience and middle class Russian consumers should be attractive for newcomers to enter this promising market with huge potentials.