Russia - Commercial Guide
Express Delivery

Discusses the prevalence and reliability of express delivery firms within the country, time from large U.S. cities, and relevant customs procedures, including de minimis amounts.

Last published date: 2019-10-13
According to a J’son & Partners Consulting study, Russia’s express delivery market grew 5% to 54.6 billion rubles (approximately $850 million) in 2015 (latest available edition), representing 0.5% of the global express delivery market.  The 38 largest Russian cities with more than 500,000 residents account for 70% of the total volume of express delivery services, with more than 60% of the market coming from B2C (business-to-consumer) transactions.  The size of the B2B (business-to-business) express delivery segment, which is especially important for healthcare products, has not changed since 2015. 

More anecdotally, leading market players estimated the overall share of express delivery at 10-20% of sales for 2018. The Russian express delivery market is characterized by price dumping, frequent market disruption, and a highly competitive nature. Companies are seeking to increase operational efficiency and monetization, which is leading to the introduction of fees for previously free services.

In 2018 DataInsight, a Russian research agency specializing in e-commerce, published the most recent trends on express delivery in Russia. Express delivery is used for up to 11% of all internet orders. Food and medical supplies are shipped most quickly, where books and CDs take the longest to deliver.  The report stated that 41% of respondents had the need for urgent delivery at least once over the past three months. The most important delivery quality factors for users are cost (58% of users), speed (55% of users), punctuality (39%), and frequency of delveries (20%). The main incentive to start using express delivery is to cut costs. The report also stated that 72% of respondents are ready to pay for urgent delivery, but only 40% are ready to pay more than 300 rubles.

According to the East West Digital News (EWDN) industry report (the latest statistics available), the Russian B2C e-commerce market was approximately $16.3 billion (physical goods) in 2016, including an estimated $4.3 billion for cross-border sales, mainly from China.  Cash-on-delivery and partial returns are widespread practices in Russia, leading to increased delivery costs.  A person can receive goods that weigh less than 31 kilos and a de minimis value of up to 1,000 euros per month without having to pay Customs duties.  Parcels of larger weight and value need to be cleared via Customs and, since January 1, 2017, Russian Customs has required passport data for individuals receiving parcels from abroad, which significantly increases delivery time.

PickPoint is the leader in this segment, with 80% of the market, followed by QIWI Post and LogiBox.  The express delivery sector is growing proportionately with e-commerce, and experts suggest that the express delivery market will grow 5% annually over the near term.  In 2015, AliExpress and eBay signed contracts with Russian express delivery companies. Furthermore, Amazon has started shipping a limited number of product categories to Russia.

The Russian express delivery market remains highly segmented, with each of the largest players holding less than 5% of the market.  Industry insiders suggest that over the next ten years consolidation will leave only five or six large companies, including DHL, Armadillo, and UPS. The Russian Postal Service controls more than 90% of the cross-border B2C shipping market, but has a much smaller share of domestic operations.  According to the Russian Association of Express Delivery Companies, DHL is the leading foreign operator in the market.  FedEx and UPS are also very active, but the total share of the four largest global companies is still less than the share held collectively by Russian firms, including EMS Russian Post, Armadillo, Garantpost, PonyExpress, CityExpress and SPSR.

Russian Post recently said it will boost its e-commerce infrastructure in 34 Russian cities and open express delivery channels from China, speeding up deliveries from two-three weeks to one week, and in 18-24 months to up to three days.

Since December 2017, under Federal Customs Service No. 1861, Russian Customs has required additional recipient data, including Taxpayer ID Number (TIN) and price confirmation of imported goods, to help Customs track whether they exceed the weight and value limits above which Customs duties must be assessed.  Passport data of users, TIN, as well as information about the value (in euros and rubles) and weight of the goods they buy is maintained/tracked in the United Automated Information System of Customs Authorities (EAISTO). International shipments sent via Russian Post are not included in this initiative.