Runet Trends 2010
Mail.ru's IPO came as a blessing for the Russian Internet. Since its announcement interest in the Runet has grown exponentially. As the year comes to a close, it's time to look back at the major trends that have emerged and shaped Russian internet in the past twelve months.
First, the number of daily Internet users has grown by 5% in 2010, reaching 69% by the end of the year. 85% of monthly users prefer to user Internet from home and only 9% of the Internet users go online less than once a week. Thus, more Russian people are using Internet more and more often.
Second, from being an indicator of wealth Internet has become a daily necessity. People rank it as the third vital need after food and clothing. One of the underlying causes for that is the growing popularity of social networks like Vkontakte.ru and Odnoklassniki, though the number of Russians using Facebook and Twitter has also grown.
Third, online advertising outperformed other media in terms of growth - it's grown by 37%, with contextual advertising growing by 45% from the total Internet advertising. In terms of revenue online advertising has come close to outdoor ads and advertising in print media and is likely to surpass those in the upcoming years.
Fourth, though widely unnoticed by the foreign media, adding .рф domain name (standing for Russian Feredeation) is considered a big development for the Runet. 700 000 sites registered with that domain name since its introduction in November. Considering that the number of .ru domains is 3,1M, the growth is very impressive. What it means is that Internet penetration is likely to grow since users would be able to do all their browsing in cyrillics, with associated market segmentation pains for online businesses.
In terms of user demographic, geographical distrubution is still uneven. The majority of Internet users come from Moscow and St.Petersburg regions about 5.5M and 2.5M people respectively. The rest come from other big towns with a population of over 1M people. However, the number of users from middle to small towns (500 000 - 100 000 population) is estimated to grow in 2011 as Internet providers are widening their reach.
It was also found that there are slightly more women among internet users - 51%.
Last but not least, e-commerce has been emerging but not really progressing in the Russian market just yet. The reasons for the lack of e-commerce triumph are manyfold: the absence of legislative regulation, weak online infrustructure, weak physical goods delivery system, shortage of qualified personnel as well as the novelty of online payments for Runet's consumers.
All in all, Runet is slowly but surely catching up with the rest of the online world. The abovementioned trends point to a hopeful 2011 with increasing competition among Internet services, potential spread of Internet to further corners of the country and growth of online businesses. With so much attention, traction and resources spents on Runet, perhaps we might even witness truly innovative start-ups emerge from Russia.
Here's a comparison of the number of Russian Internet users between 2009-2010:
Source: Coordination Center for TLD
Image AlphaTangoBravo / Adam Baker
Business environment is still "wild" through :) There was a corrupt state story behind ?? domain, when domain registry would buy potentially valuable domains after several people applied for registering same domain.
Absolutely agree with you, Maksim. Corruption, red tape and favouritism are still the biggest hindrences to any business in Russia.