Russian internet retail: a way towards consolidation
Part I. Offline titans approach internet
It is obvious that retailers at developed countries are moving towards the multichannel model, even though offline and online worlds were in complicated relationships for a while.
Some brick and mortar retailers experienced tough confrontations with internet rivals (Amazon vs. Barnes and Noble) while others were trying to collaborate (e.g. Target outsourced its online operations to Amazon in 2001).
But regardless past relationships, for now, retailers with clear offline pedigree embrace online and populate more than a half of The Top 10 E-Retailers in the U.S. ranking.
Convergence of offline and online worlds takes place in Russia as well. For instance, Ulmart, which is considered the largest online retailer, runs 29 offline outlets, DNS-shop (7th online) operates 700, exist.ru has ca.250 offline stores. Therefore, a move towards multichannel retailing exists in Russia. However, as everything in Russia it has a twist.
Selling online in Russia seems to be embraced by medium-sized retailers, while in the US internet is a battlefield of titans.
Moreover, large offline retailers are not very successful online in this part of the World. For instance, X5 group, the biggest Russian retailer with $16,8B revenues for 2013 is about to shut down E5 — its online storefront. Sportmaster, the biggest sports apparel retailer, was ranked 97th and Detskiy mir — the largest retailer of children’s goods, was ranked out of top 100 by internet sales.
In the future, I expect Russian large brick and mortar retailers to increase their online sales and build multichannel operations. Consolidation through partnerships followed by investments and/or M&As may be a viable option and is about to be explored further.
 The Everything Store: Jeff Bezos and the Age of Amazon
 Succeeding = included in top 10 of online retailers