“The customer for all marketplaces is a sacred cow that is milked carefully and politely.”
Recently, marketplaces have taken a very prominent place in the domestic trade system, greatly displacing regular stores. But this year began for online trading with increased attention from supervisory authorities. For example, in January, the Federal Antimonopoly Service (FAS) recognized Ozon and Wildberries as collective monopolists with a market share of 80%. And in the State Duma they started talking about the need to limit points of delivery of goods purchased online. Meanwhile, ordinary consumers have already become accustomed to the fact that such points are literally on every corner. Now their number may be sharply reduced. What is the reason for the authorities’ close attention to the activities of marketplaces and what consequences will this lead to for mass consumers?
So what is happening now in the huge domestic market? Why is there such a shift towards e-commerce? Is it necessary to fight this, and at the highest level? And did they forget, as is usually the case, to take into account the opinions and wallets of ordinary people — the main market participants?
The conversation on this burning topic was attended by Anna Vovk, Chairman of the Committee for the Development of the Investment Environment for Business at the Moscow Chamber of Commerce and Industry, Alexander Anfinogenov, an independent consumer goods expert, as well as Dmitry Yanin, Chairman of the Board of the Confederation of Consumer Societies (ConfOP).
The growth is expected because more and more people are using online trading services. The coronavirus pandemic played a role here: this difficult period taught people to buy online. Online trading will continue to develop, whether we want it or not. Here we can draw an analogy with films, which people are going to cinemas less and less to watch. But the demand for films has not fallen: they are now watched on their smartphones. It's a similar story with shopping. If offline limits the assortment and forces people to choose only among what is on the sales floor, then online sales provide much wider opportunities and, most importantly, significantly save time and money.
< p>It is very important for the consumer to quickly, at an affordable price and in one place, buy a wide range of goods from the largest number of different manufacturers. A person can immediately compare the characteristics of products and quickly make a purchase. That is, the marketplace is a convenient payment system, convenient logistics and a wide selection. When compared to offline purchasing options, online has recently prevailed.
Here, it seems to me, we need to evaluate a second indicator, in addition to the growth in online trade, which is close to 30%. Almost 88% of the total trade turnover in the country comes from traditional stores, car dealerships, and grocery supermarkets. Why did the FAS pay attention to online platforms in 2024? I think this is due to aggressive practices towards partner sellers of some marketplaces. Stories of imposing their own rules on stores or distribution points, of course, attracted the attention of the FAS. As a result, the two largest marketplaces received the label that they occupy 80% of the market. For them it is unpleasant, but not fatal. If in the future they conduct their trading practices with partners and suppliers correctly, then no new steps will be taken to curb their “expansion.” There is simply no alternative to marketplaces in such a large country as Russia. Online trading will move forward by leaps and bounds.
Such close attention from supervisory authorities is not due to any specific violations. The job of the FAS is to carry out its supervisory activities. Yes, there are changes in consumer behavior in the country. But unless marketplaces face any specific obstacles that will impact their service, consumers don't need to worry. This will not affect ease of use or your wallet.
For example, they will close nearby points of delivery of goods and say: there can only be one point in this area. Another option: they will be required by law to pay only in cash for online delivery or, conversely, to pay only by card. If strict restrictive measures are not followed, then Russians will not feel any changes.
Let's figure it out. The offline retail trade we are accustomed to is traditionally divided into markets — there is a food market, a cosmetics market, an electronics and household appliances market, and so on. Meanwhile, in marketplaces all these markets are combined. Therefore, calculating their share in the traditional way is simply wrong. This whole initiative looks either like a manifestation of aggressive amateurism, or, even worse, a place is being cleared for a specific player.
It is not clear to me how the authorities will calculate this 25%. How to separate the number of sneakers from liters of juice? This is unrealistic. Therefore, most likely, marketplaces will receive an invitation to negotiations from officials. What will happen next? Yes, fines are unpleasant, but marketplaces will develop their legal services to fight them off. If the authorities’ pressure on online platforms increases, they will begin to diversify their risks and invest, say, in Uzbekistan, Kyrgyzstan, and move to the East in order to increase online trading where it is not a nightmare. This is the scenario I see. I also agree that there is a risk of a player entering the market with an element of confiscation. But what do I agree with the FAS in this whole story? Practices between sellers and marketplaces need to be closely monitored. Here, very unprofitable fines are often imposed by marketplaces, and there are delays in refunds and compensation for cases of lost goods. There are plenty of reasons for dialogue.
This will affect ordinary consumers of online goods quite quickly. The service will deteriorate. Fewer participants means less competition, higher prices. A monopolist participant, if one appears, will not be so effective, and people will immediately notice the difference.
We must understand that in our country there is a trend towards increasing state revenues. This fully applies to retail trade as well. But all changes occur evolutionarily. So nothing changes for consumers.
I think the more officials immerse themselves in this topic, the more new things they will discover for themselves. Manufacturers in offline trade are the most disadvantaged. Imagine, a product worth a ruble is sold on the shelf of offline players for 2 rubles. The main beneficiary in the chain between producer and buyer is the network. This is the reason that goods are cheaper in online trading: there, the intermediary seller is essentially removed. Let me emphasize once again: in order for a manufacturer with all its assortment to be offline, that is, to get on the shelf of a regular store, it needs to go through seven circles of hell, and it’s not a fact that it will work out. Meanwhile, online trading allows the manufacturer to compete in an evolutionary way, offering goods of different quality at different prices. Therefore, the future is online in any case. The Ministry of Industry and Trade understands this better than the fiscal authorities. And, most likely, the law will be relaxed, and maybe even greatly changed in favor of online commerce.
All stories with FAS are still at the initial stage. If the company is not forced into bankruptcy, consumers will not feel anything. There is no need to worry if something is on fire at these companies or employees are on strike somewhere. All the money is returned anyway. There is not a single scandalous story where funds were not returned. Companies initially have a clear business goal: not to solve their problems at the expense of individuals. They solve their problems at the expense of couriers, violating their labor rights, at the expense of suppliers, launching their own brands, introducing fines. But the individual — the customer for all marketplaces — is a sacred cow that is milked carefully and politely. But if they try to extend various restrictions to all living things that business in Russia still has left, then this will not give anything good to consumers. So it would be better if the state did not interfere in the retail market.
Indeed, online trading immediately began to compete with traditional offline trading, conquering some pieces of its territory. The main method of competition, as is known, is price. And indeed, initially, costs online are lower, since there are savings on retail space, logistics, sales staff… They can always offer a more optimal price to their end consumer. Will marketplaces eventually absorb brick-and-mortar stores? I don’t think so, but of course they will eat a certain share.
As one popular literary character said: the iron horse is replacing the village horse. Progress cannot be stopped. Naturally, online will develop. Yes, it will absorb a large amount of offline: we already see this at the level of hypermarkets, which are withering away from year to year. Online is a service of convenience, saving time and money. As long as our electricity is not cut off, online will develop and will be used more and more.
So far, the marketplace-consumer relationship is going well. We have a clear feeling that marketplaces are consumer advocates of sorts. But there are issues that are worth discussing. For example, in Europe, consumer organizations insist that someone is responsible for the security of marketplaces. If a light bulb is sold, which then burns down your house along with your property, the marketplace should be responsible for this and weed out any defects. It is important that they are responsible for safety. Everything else is the market. Progress is indeed being made. If there is some kind of aggressive attack on these online platforms, then there may be some kind of redistribution, goods will become more expensive, and delivery will be slower. But in general, the prospects for the development of online trading are very positive.
Online will really develop. Progress will inexorably move this entire industry forward. The only point: the consumer, if the government actively gets involved in the operation of online platforms, will pay for it. But as long as we have variety, there are several competing marketplaces rather than just one, there will always be choice. I would like it to stay longer.