Despite an internet penetration rate of only 20.8%, Russia still maintains an internet population of over 29 million, which is currently the fifth largest market in all of Europe. And this number is poised to increase greatly as Russia leads the impressive internet growth throughout Eastern Europe. Internet World Stats cites that Russian internet penetration has grown 850% since 2000, and the trend does not show signs of slowing anytime soon. eMarketer estimates that the number of internet users will grow to around 60 million by 2012, and in the less distant future, Russia will be the second largest internet market in Europe by the end of 2008.
Additionally, both e-commerce and the Russian online ad market are on the rise. The online ad market is projected to double in 2008 to over $685 million and e-commerce has shown annual growth rates of 45-50% in both 2006 and 2007 according to an Economist Intelligence Unit report. While online credit card transactions remain limited by Russian’s historical distrust of retail banking, this trend appears to be diminishing as retail banking services have been rapidly developing as foreign players arrive. Small, specialized B2C companies currently dominate the e-commerce market in Russia with books, DVDs, and computers catching the greatest proportion of sales, but B2B e-commerce is burgeoning especially in the computer and office-equipment sectors.