SF Dissects the Russian Logistics Market like a Chef

• In the context when traditional foreign trade is continuously cooling off, the cross-border e-commerce is rising in the spotlight of the public. Being a good neighbor of China, Russia possesses a huge market comparable to its territory area, but most people are watching rather than grabbing a piece in the face of such a huge pie. The reason is that Russia is so vast in territory that it might take a dozen of days, a month or even longer to deliver a shipment across the Eurasian Plate from China to Russia.

  Mr. Luo is the owner of a foreign trade company selling mobile phones and tablets on cross-border e-commerce platforms such as AliExpress and Amazon. Everyday Mr Luo is seeing his shipments delivered from Shenzhen to all over the world, but is frustrated whenever there is an order to Russia.

  To him, local express delivery services in Russia can never be aligned with the legendary fighting nature of the Russia people, as it can only compete with that of China ten years ago. The Federal Customs Service of Russia configures its manpower and infrastructure based on normal inbound and outbound volume of goods and can hardly handle large amount of cross-border e-commerce parcels with its existing manpower, facilities and operational processes. This directly results in time-consuming customs clearance and heavy backlog of parcels. It is never a surprise to see a parcel being held by the customs for a month or two. In addition, Russia is a country with the largest territory area in the world that covers 9 time zones. But this can not deny the fact that it is incapable of handling the exploding number of e-commerce parcels as its express delivery facilities and logistics network have not been updated for years.

  It is undeniable that Russia has a huge market, and according to the latest report of the E-commerce Foundation, the e-commerce transaction size of Russia is expected to be increased by 5.3% (Euro 1 billion) in 2016, reaching Euro 21.6 billion. To make sure that online retailers take a bite of the cake and evade logistics problems while offering Russian consumers with the Chinese style express delivery service, SF adopts the "chef" approach to split the huge Russian market based on demands.

  As a basic cross-border logistics service for Russia, SF launched its cross-border E-Parcel service to Eastern and Northern Europe. Currently, with shipping from Hong Kong added, the service has covered 10 countries including Russia, Lithuania, Estonia, Latvia, Finland, Sweden, Norway, Belarus, Ukraine and Poland.

  To help cross-border B2C sellers get a foothold in the increasingly popular e-commerce market of Russia and promote the sales of commodities of higher values, SF upgrades its E-Parcel service to E-Parcel+ service tailor-made for Russia. Pushing the weight limit to 30kg from the original 2kg of the E-Parcel service, the E-Parcel+ service features whole-process route tracking, door-to-door delivery in Russia and Ukraine, and shortened transit time to 10-15 days for major cities. With the initial weight and the additional weight adjusted to 100g, it also helps customers save more money.

  Being faced with increasing demands in express delivery between China and Russia, SF has launched door-to-door its Standard Express service from Mainland China to all territories of Russia since July 2015, followed by the launch of the reverse service from Russia to Mainland China, Hong Kong and Macau this year.

  However, just as the old saying goes, "Time is money", the Standard Express service proves to be the fastest yet expensive. Therefore, for price-sensitive traditional B2C and B2B foreign trade customers who are also demanding on transit time, SF has also launched an economic version of its Standard Express service, the Economy Express service for Russia. The service is best suitable for following customer groups: customers in industrial areas and specialized markets, manufacturers of light industrial products, regional brand distributors (bulk commodity), target customers from sectors like garments, electronics, electric appliances, hardware and furniture. For cross-border shipments within a weight limit of 30kg that are highly valued and time demanding, the Economy Express service is second to none.

  In addition, SF has also launched its Overseas Fulfillment services including the Eastern European Fulfillment and the Central European Fulfillment. Overseas Fulfillment refers to building a warehouse in a foreign country. Located in Estonia, the Eastern European Fulfillment expands its end delivery coverage to 32 European countries including Russia, Ukraine, Belarus and Norway; while the Central European Fulfillment located in Poland covers 28 EU countries. Online retailers in China prepare their goods through big data calculation, market survey and market forecast and hand over these goods to SF who will then consolidate and ship these goods by sea, air or express delivery to overseas warehouses for storage.

  For Mr. Luo, by shipping goods to the bonded warehouses through overseas fulfillment, he could expect his goods to be delivered to the overseas warehouses no longer than 3 days by first-leg air transportation without any tariff paid, which is such a blessing for him as he could save some money from taxation. Upon arrival at overseas warehouses, his goods would be delivered directly through the Eastern European Fulfillment to major cities in Russia in 5-7 days and other European countries in 2-5 days on average. With dramatically shortened transit time through overseas fulfillment, delivery efficiency is improved significantly to even surpass local logistics delivery in Russia. This also makes the formerly time-consuming and costly after-sales services like return and replacement more easily, effectively improves the brand image, protects the benefits of consumers in Russia and wins good reputations for online retailers in China.

   

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