Russia: ICT Usage by Businesses

IT in the Russian Federation

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National IT Strengths & Weaknesses Size of Domestic IT Market National ICT Policies Telecommunications Infrastructure Telecommunication Deregulation & Liberalization Computing, Internet Diffusion & Cultural Attitudes toward Technology ICT Usage by Businesses: Electronic Commerce & E-Business E-Government Domestic Production: Software Development, Hardware Manufacturing, R&D IT Workforce IT Geographics IT Financing IT Legal Environment	Russia: ICT Usage by Businesses Overview Businesses in Russia are willing to take the risks to capitalize on the potential benefits of e-commerce. Several major industrial groups are going on and launching e-commerce initiatives. Following current Western trends, large corporations are using ventures to open new markets and to increase operational efficiency. Most significant is the commodity markets which have embraced the virtual marketplace concept. The companies that have projects currently are Zerno Online (grain), Oil Online, Grin.ru (universal exchange), Global Steel Exchange, Europ-Steel.com, Emetex (metals), and Business.ru (universal). Key Stats 2001 Revenues (in US $ Millions) Software: 6,007 ICT Hardware: 5,021 IT Services: 760 Data Communication Services: 391 Voice Telecom: 374 B2C Retail Sales in 1999 were around $2M B2B sales totaled $90M in 1999 Industry Analysis ICT applications in fuel and energy, metallurgy, banking, consumer goods protection, and trade are prominent. ERP providers are benefiting from the many Russian companies looking to attract foreign investment or float bonds on the European market and need to establish credible accounting practices. Several clients of IBS Company have taken advantage of their SAP implementation services including Rostelecom, Gazprom, the Ministry of railways, Lukoil, and Shell. (42) Russia has proven a performer for several major players in the hardware market. It is Intel’s fastest growing market, and “in the past year, software giant Microsoft’s sales in Russia have grown 80%, while Sun’s have doubled over the lat two years. Both cite their Russian divisions as their best performers companywide in 2002.” (44) Payment Technologies There are several options for payment when conducting e-commerce in Russia. Cash on delivery Most common means of payment Banking cards (credit or debit cards) Internet banking Prepayment or pre-paid cards Digital money Obstacles to E-Commerce for B2B and B2C B2B prospects for E-Commerce are much more appealing at this point than B2C. B2C projects are significantly hindered by weak consumer purchasing power, low use of credit cards, lack of trust in the banking system, and a poor postal delivery system.

National IT Strengths & Weaknesses

Size of Domestic IT Market

National ICT Policies

Telecommunications Infrastructure

Telecommunication Deregulation & Liberalization

Computing, Internet Diffusion & Cultural Attitudes toward Technology

ICT Usage by Businesses: Electronic Commerce & E-Business

E-Government

Domestic Production: Software Development, Hardware Manufacturing, R&D

Russia: ICT Usage by Businesses

Overview

Businesses in Russia are willing to take the risks to capitalize on the potential benefits of e-commerce. Several major industrial groups are going on and launching e-commerce initiatives. Following current Western trends, large corporations are using ventures to open new markets and to increase operational efficiency. Most significant is the commodity markets which have embraced the virtual marketplace concept. The companies that have projects currently are Zerno Online (grain), Oil Online, Grin.ru (universal exchange), Global Steel Exchange, Europ-Steel.com, Emetex (metals), and Business.ru (universal).

Key Stats

2001 Revenues (in US $ Millions)

Software: 6,007
ICT Hardware: 5,021
IT Services: 760
Data Communication Services: 391
Voice Telecom: 374

B2C Retail Sales in 1999 were around $2M
B2B sales totaled $90M in 1999

Industry Analysis

ICT applications in fuel and energy, metallurgy, banking, consumer goods protection, and trade are prominent. ERP providers are benefiting from the many Russian companies looking to attract foreign investment or float bonds on the European market and need to establish credible accounting practices. Several clients of IBS Company have taken advantage of their SAP implementation services including Rostelecom, Gazprom, the Ministry of railways, Lukoil, and Shell. (42)

Russia has proven a performer for several major players in the hardware market. It is Intel’s fastest growing market, and “in the past year, software giant Microsoft’s sales in Russia have grown 80%, while Sun’s have doubled over the lat two years. Both cite their Russian divisions as their best performers companywide in 2002.” (44)

Payment Technologies

There are several options for payment when conducting e-commerce in Russia.

Cash on delivery

Most common means of payment

Banking cards (credit or debit cards)
Internet banking
Prepayment or pre-paid cards
Digital money

Obstacles to E-Commerce for B2B and B2C

B2B prospects for E-Commerce are much more appealing at this point than B2C. B2C projects are significantly hindered by weak consumer purchasing power, low use of credit cards, lack of trust in the banking system, and a poor postal delivery system.