eBay Inc (EBAY)’s Swift Solution To the Russian Puzzle

eBay Inc (NASDAQ:EBAY) didn’t let sanctions, war or even protectionist policies of the Russian government, hold it from expanding into the Russian e-commerce space. The Moscow Times quoted business daily Vedomosti as reporting that the U.S. based online auction site is set to add products from Russian retailers today on its interface for the eastern continent.

eBay Inc (NASDAQ:EBAY) is set to join hands with the likes of X5 Retail Group and Wikimart, according to the report, in a bid to include the fast growing Russian e-commerce market in its network.

The article quoted eBay vice president Wendy Jones as saying that, “Russia was … and remains the eBay marketplace’s No. 1 priority for global expansion.” There were too major problems that eBay Inc (NASDAQ:EBAY) faced in this venture. Firstly, the ever so slow state postal service, bearing in mind the crucial role of fast delivery in e-commerce industry.

Secondly, the protectionist policies of the Russian government in form of high custom duties and red tape. The article reported that this led to shipping companies like DHL and FedEx Corporation (NYSE:FDX) to halt shipments to Russian individuals from abroad which weigh more than 10 pounds and are valued at more than 200 Euros.

eBay Inc (NASDAQ:EBAY) solved these problems in two ways. Firstly, the online auction site signed a memorandum of understanding with the Russian postal service in July for a speedy delivery of products purchased on eBay Inc (NASDAQ:EBAY) from China and to tackle the deliveries from U.S., eBay involved the Russian delivery service Dostami.ru, according to the article. Partnering with the later meant that goods had to be shipped to a ‘virtual address’ in U.S. before reaching the Russian customers, as explained in the article.

However, by involving Russian retailers directly, eBay Inc (NASDAQ:EBAY) has avoided both the red tape hassle and the delivery time problem as goods will only be moving within the country now.

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