The Russian sharing economy is in high growth
The global sharing economy market was estimated to be EUR 16 billion in 2017 and is expected to reach EUR 36 billion by 2022.
The top five sectors of the sharing economy in Russia count for 99% of the country’s total sharing economy. These sectors are C2C, P2P, car sharing, carpooling and estate rentals.
Many of the largest companies in Russia, such as Sberbank, Yandex and Mail.ru Group, are investing in the sharing economy and integrating sharing services into their ecosystems. This includes office sharing, construction (materials and equipment sharing) and circular economy (waste from some companies is raw material for others).
These megatrends create new business opportunities for Finnish companies in Russia.
Potential for Finnish export:
- Delivery of technologies for the shared economy.
- The shared economy is a potential new sales channel for Finnish companies operating in or planning to enter the Russian market.
Examples of sharing economy in Russia:
- С-2-С, B-2-C: www.avito.ru/, youla.ru/
- Car sharing: yandex.ru/drive/, belkacar.ru/, delimobil.ru/,
- Carpooling: www.blablacar.ru/
- Real estate: www.avito.ru/, cian.ru
- Sharing accommodations (shared rooms, private rooms and apartments) is growing rapidly in Russia (55% CAGR 2014-2017). In 2018, the growth rate was 70%.
- Office sharing: www.regus.ru/, sok.works/ru
- Crowdfunding: planeta.ru/, boomstarter.ru/
Key drivers of the sharing economy in Russia:
- The development of the sharing economy featured in President Putin’s May 2018 decree: The Decree of the Russian President # 204 ’National Goals and Strategic Objectives of the Russian Federation’s Development Until 2024’).
- Russia has 116 million internet users (#8 in the world) @ 80% of the population.
- High concentration of population and economy in the big cities.
- Increasing user confidence in the sharing economy.
- Population with low socioeconomic background.
- Growing audience, especially in the 45+ age group.
Overview of the main segments of sharing economy:
The Russian sharing economy market is currently dominated by C-2-C business models. The Russian C-2-C market grew 53% in 2019 (the number of sellers was 14 million and the number of buyers 12 million). The P-2-P sector increased by 43% in 2019. In 2019, four regions in Russia introduced a ‘self-employed’ tax for individual persons in order to make P-2-P business legal. It is expected that this will be distributed throughout Russia and will intensify the P-2-P and P-2-B sector. Demand for B-2-B and B-2-C applications is expected to grow rapidly. It is expected that B-2-B and B-2-C will eventually dominate the shared economy in Russia.
Car sharing was introduced in Russia in 2013. Since then, car sharing has grown rapidly. Nowadays, there are 25 car sharing companies operating in 20 cities. Moscow has around 26.000 shared cars (#1 globally). The number of car sharing trips has increased x1.5 compared to 2018 and continues to grow. The market is dominated by Yandex.Drive (50% of the market) followed by Delimobil and BelkaCars.
Carpooling (ride sharing)
Currently, the Russian carpooling market is the biggest in Europe with 16 million @ 100.000 rides per day. This creates a need for IT solutions that can integrate carpooling into city transport systems. The leading operators are BlaBlacars, Yandex, Poputka.
Latest news from the market:
- April 2020, President Putin announced support for car sharing (EUR 36 million).
- Sberbank and Mail.ru have signed an agreement for cooperation in the fields of food and transport, with a total investment of EUR 1 billion.
- Yandex, the Russian NASDAQ-listed Internet giant, is planning to launch its car sharing service in Europe (potentially Madrid or Copenhagen).
- October 2019, ’Yandex.Drive’ was the second largest car sharing company in the world (size of fleet of vehicles).
- June 2019, Avito.ru (the biggest classified site in Russia) and the Russian Post have signed an agreement of cooperation.
- November 2019, YouDrive Live introduced electric scooters in Moscow.
Opportunities for Finland:
- Russia welcomes Finnish companies that have complementary business models for the sharing economy.
- IT technologies are needed for sharing economy platforms.
- The sharing economy creates a new sales channel for Finnish companies.
What are competitive advantages of the Finnish offering?
- Russia has a very positive image of Finland and the Finnish IT sector in particular.
- Geographical proximity