E-commerce market after Russia invaded Ukraine. What declines have been recorded?

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The e-commerce sector, following the invasion of Ukraine by Russia, recorded declines in neighboring countries. In Poland, some companies operating in the industry recorded revenues of around 10%, and in Romania itself of 20%. It is influenced by sanctions, the decisions of logistics companies, but also the moderation of consumers in their purchases.

Sanctions from countries that oppose Russia’s aggression in Ukraine, as one might assume, also affect companies that do not cooperate directly with the Russian government and do not even do business there.

– Companies that have decided to cease their activities in this region due to economic sanctions or for moral and independent decisions have a direct impact. However, the aggression in Ukraine will also be felt by others, such as Polish companies, which have their factories or stores in war zones. Moreover, certain consumption decisions are perceptible on the markets. Many sectors of the economy, such as the e-commerce industry, saw significant declines in orders in the early days of Russian aggression. Consumers have reviewed their shopping needs and are waiting for the situation to change – underlines Wojciech Kyciak, chairman of the board of directors of Bezokularow.

E-commerce does not work in Ukraine

On his LinkedIn profile, Bartosz Ferenc, the owner of Sembot and Agencja.com, which provides marketing services to e-commerce companies and startups, described his clients’ situation during the first week of the invasion. According to observations, Polish e-commerce (a sample of approximately 120 million advertising budgets) lost an average of 30% to 40% in traffic and revenue from the first day of the invasion to Sunday, Thursday to Sunday. Interestingly, under Ferenc’s post were comments from representatives of other agencies, who confirmed the initial drops of around 40%. The losses were recouped on the first day of the new week and the drop recorded from Monday to Monday was only around 9%. During the following week of the war, the situation normalized a bit and in the following post it was concluded that e-commerce traffic continued to decline between 5% and 10%, but the figure of business is already returning to its previous footsteps.

A similar trend was noticeable in another country bordering Ukraine – Romania. In February 2021, a similar number of orders were placed in the last two weeks of the month. This year, the last week brought a 20% drop in their numbers compared to the previous February week.

– The small online orders at the end of the month were not expected and it is not natural to look at historical data. We certainly attribute this to recent events in Ukraine. Poles, Romanians and other customers in the region approach these events with caution and prefer to exercise moderation in their purchases online, where clothes, books or electronics are most often purchased. The money, however, did not go to the “sock”. The Poles supported the refugees in droves, so that hygiene products and sustainable foods were disappearing from the shelves – mainly from traditional stores. Overall, therefore, trade has not suffered – comments Robert Stolarczyk, chairman of the board of directors of Promotraffic.

Of course, the Ukrainian e-commerce market also collapsed. Before the invasion, it was one of the most dynamically growing e-commerce spaces. In 2021, e-commerce company revenues were over $1 billion with over 27% year-over-year growth.

The commercial block is empty of Russian shelves

Also, some e-commerce platforms are pulling out of Russia and Ukraine completely. For example, the American eBay, which decided to temporarily suspend sales to buyers with addresses in Russia and Ukraine.

– The decision to stop shipments to Ukraine is of course dictated by logistical problems. Today, it is difficult to imagine any transport of material or goods other than that carried out through official state channels. There is no question of bargaining on the current scale – says Wojciech Kyciak from the online optical store in voculars.

Major American logistics companies such as UPS and FedEx, as well as Germany’s DHL, have already announced that they will suspend deliveries to Russia and suspend inbound and outbound deliveries to Ukraine. These are not the only companies suspending operations in the region and thus affecting the status of delivered e-commerce orders. Denmark’s AP Moeller-Maersk, Switzerland’s MSC and France’s CMA CGM, the three shipping leaders, have suspended their container shipping lines to and from Russia, cutting the country off from the global shipping network. These three companies account for more than 50% of container shipping to and from Russia, and smaller shipping companies have also joined the boycott.

To this list you can also add, for example, many food brands that are withdrawing from new deliveries to Russia. The situation with Coca-Cola echoed widely. The company initially announced that we would not buy its products in Russia, after which the announcement was not implemented. Coca-Cola continues to key and sends mixed signals, so that its products (apart from the flagship Cola, also, for example, Sprite, Cappy or the “Polish” Kropla Beskidu) face consumer boycotts in many many European countries, and in Ukraine these products no longer appear on the shelves with new deliveries.

– The sea and air blockade, as well as the activities of logistics companies that delivered products by land or rail, will sooner or later affect store shelves. They will lack electronics, sports equipment and other goods, to the presence of which Russian consumers have become accustomed – the chairman of the board of Bezokularov.

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