MOSCOW, Russia - Dubbed as the Google of Russia, the countrys internet giant Yandex is now believed to be expanding its business.
Yandex, which boasts of 50 million monthly users of the overall 87 million internet users in Russia - is now said to be venturing into online shopping.
Russian shoppers are not known to have been hit by the online shopping bug yet, with global eCommerce giant Amazon too having only a very small presence there.
However, considering that the $12 billion Russian internet giant is well-placed in the market, experts dont think it would take too long for Yandex to cash in on the huge market of opportunity in online shopping.
Yandex, experts claimed, could easily dominate the market, where it already holds a majority share, and can solve issues around delivery, logistics, and trust too.
Further, reports have revealed that the top Russian tech firm is also expanding into other areas including ride-hailing service with Yandex.Taxi, AI digital assistant Alice, smart speakers.
In a recent media interview, Yandex executive Michael Levin was quoted as saying that the firm was evolving its price comparison service called Yandex.Market, into a marketplace where people can order items such as electronics, home appliances, and toys, among other goods.
Levin reportedly added, "This is a very new business for Yandex in terms of being a physical business. For many years, we were purely online. Then there was Yandex Taxi, which became a huge part of Yandex, now there's Yandex.Market with warehouses storing products. We have already hired key members of the team responsible for logistics and warehouses."
Yandex has said that the new service, which is a joint venture with Russia's biggest bank, Sberbank, is set for a full launch later this year.
Levin revealed that the site is currently in beta but that a pilot project was operated in the cities of Nizhny Novgorod, Kazan, and Ufa.
He added, "The game is really on for the creation of a Russian Amazon"
He also pointed out that the firm's year-end goal was to attract "a few hundred thousand daily users."
And while the number is not too big for Yandex to achieve, Levin said that it's bigger than most shopping sites in Russia.
BCS analyst Mitch Mitchell explained that Russian takeup of eCommerce is low compared to the U.K. and the U.S.
Mitchell pointed out that the main issues are logistics, and the fact that Russia is primarily a cash economy.
Adding, It's more common to order something and then pay when the courier turns up.
Mitchell said, "If you were happy with [the item], you would pay the courier. Or you wouldn't like it and he would take it and go away. That aspect of returns makes the process quite expensive. You don't have a sale up front. There's clearly no dominant player like an Amazon in the UK," he added. "The game is really on for the creation of a Russian Amazon, if you will."
According to AITC predictions, Russians will spend $20 billion (1250 billion rubles) online in 2018.
Levin even pointed out that Yandex doesn't see Amazon as competition.
He said, As Russia becomes more accustomed to ordering its shopping online, Yandex wants to compete with established retailers building out their e-commerce services.
Adding, "In Russia, we don't compete against Amazon. We compete against retailers who have been retailers their whole lives, or decades. We are not as good retailers as them probably. What we're good at is machine learning and data science."