E-commerce giant Amazon looks like it is gearing up for the latest chapter in its international expansion: an operation in Russia. According to this article in Forbes (in Russian) the company has opened its first office in the country, headed by Arkady Vitrouk. Vitrouk is the former general director of ABC-Atticus, a publishing group owned by media baron Alexander Mamut.
Forbes cites unnamed sources but notes that the appointment, and the office opening, have not been confirmed by Amazon itself. However, we’ve discovered that Vitrouk’s LinkedIn profile does confirm him as director of Kindle Content for Amazon in Russia.
Looking a little closer, Amazon is hiring for at least three other positions for Russia specifically for its Kindle business and the sourcing of local content: a senior product manager for Kindle content pricing, and a principal for content acquisition for Kindle Russia, and another content acquisition manager.
A visit to amazon.ru currently redirects to the company’s main page for Europe, with links to other countries’ local sites, including the UK, France, Spain, German and Italy. The Forbes article also notes that Amazon has applied for patents in Russia around some of the activities we know it for already: storage and delivery of goods; the storage of electronic texts and media files; and book publishing. We have contacted Amazon and Vitrouk himself for more detail and will update this story as we learn more.
The news comes in the same week that Amazon announced that it would take its Appstore business international — extending it to nearly 200 countries, another sign of how the company is gearing up for more scale. It also follows reports (again unconfirmed) that Barnes & Noble is also preparing for more Nook activity in Russia.
Russia is currently Europe’s largest internet market, according to a recent study from comScore, with an online audience of 61.3 million users.
That, combined with Russia’s rapidly rising middle class, has led to a boom in e-commerce. Morgan Stanley believes the Russian e-commerce market will be worth $36 billion by 2015, up from $12 billion in 2012.
Russia has been a noticeable hole in Amazon’s footprint, but that has spelled opportunity for local and other international players, too.
Ozon — commonly called the “Amazon of Russia” — has raised $121 million in funding and has been building up a very Amazon-like business, complete with a logistics network.
As we’ve pointed out before, this is especially important in a country like Russia, which doesn’t have a solid, extenstive pre-existing delivery infrastructure that spans across the whole of the huge country.
That, and the lack of credit card penetration, has meant that companies like Ozon and fashion/home goods site KupiVIP (itself flush with $120 million of funding) have built out fleets of their own delivery trucks, with drivers who take cash on delivery for goods (KupiVIP, focusing on clothes, willeven wait until the recipient tries something on, so that the item can also get returned on the spot if it’s unsuitable).
Meanwhile, eBay earlier this month, during its analyst day, called Russia the “number-one priority” for expansion for both eBay and PayPal. In 2012, people in Russia bought over $400 million of goods on eBay.
Ozon’s business has been built on its extensive logistics network to deliver a soup-to-nuts range of goods, but it has not ruled out doing more in cloud services. However it seems less interested in Kindle-style products like tablets, e-readers and digital content.
This is where Amazon could come in. In another BRIC market, Brazil, Amazon has been building out a business based on its non-physical goods — Kindle books and Kindle devices.
This could be one route to how Amazon decides to tackle Russia, at least in part. In that sense, it’s interesting that the Forbes report specifically names as the head of Amazon in Russia someone whose immediate experience lies precisely in publishing, rather than e-commerce or retail, and that he’s already heading up business for the company there in that vein.
P.S. I write “at least in part,” because it turns out that Amazon is also hiring for other Russia-related expansion plans. Fashion e-commerce site Shopbop, owned by Amazon, is seeking a marketing manager for a new rollout in Russia. Amazon has also been headhunting in Moscow for software engineers — although these would be for relocation to Seattle.