- Virtual
or Real?
Before the Internet
era most trade information networks in the Russian Federation (and
previously in the Soviet Union) were strongly based on regional
representative schemes. One example is the ICSMIR network (http://www.icsmir.ru).
ICSMIR started its activities at the beginning of 1991 as a pure
information network, collecting and disseminating business related
information. The technology of the time required the strong presence
of regional centres, which provided access to text-only databases
via local telephone dial-up systems.
When the Internet got
its first thousands of Russian users, management of ICSMIR decided
to provide access to its databases via the Internet. After a couple
years ICSMIR decided to cancel the "old fashioned"
techniques for access and completely moved to the Internet. As a
result they almost completely lost users from the regions for two
reasons: firstly, the development of Internet technologies started
mainly in Moscow and St.Petersburg and are still badly developed in
the Russian provinces, and, secondly, direct local sales are
dramatically more efficient in comparison to online sales. ICSMIR is
still operating. They diversified their activities into the online
sales of books, music and videos. The share in their sales of
information services declined by several multiples.
Many other
information networks have followed the same path and failed in the
end because of a strong focus only on virtual sales via the
Internet.
- Mall
or Promotion Place?
A serious mistake of
many trade information networks is to focus on online sales,
especially on the local market. People are nor willing to pay for
information around the world. The same, if not a worse, situation
prevails in Russia as well.
One of the
possibilities to survive in selling information is to conduct local
sales of value-added information. What does this mean? Coming back
to the example of SIORA-net, the following procedures are used by
many Regional Agencies:
- Make
the client curious
Many Regional
Agencies use the Internet or traditional mass-media tools to
publish interesting announcements or articles about current
markets trends (latest market developments), samples of business
plans, reports about interesting events. Potential clients contact
the Agencies in order to receive more detailed information. This
approach is especially successful in relation to attracting and
holding the interest of international clients, which suffer a
strong lack of information about Russian market.
- Value
added information
It is almost
impossible to sell addresses from directories and yellow pages to
clients. Only very specialized databases can be sold out without
additional services. Companies trading information, especially
across borders, have a good advantage if they can offer services
connected to cultural business differences between local and foreign
clients. It is very easy to find contact information about western
European companies for example but it is pretty difficult to obtain
a first reply and a first meeting. Successful trade networks, such
as the Chambers, SMEDAs/BCCs, and the Interregional Market Centres
Network, are conducting their activities by offering to clients not
contact information but market research, or partner-search, or
assistance in running businesses in Russia.
A good combination of
trade information and consulting services is a valuable, if not
critical element, of successful operations of such networks.
- Day-to-day
maintenance
A typical reason for
the failure of most trade information Portals is great initial
investment at the start-up stage and a dramatic slow-down when
investment funds are nearly exhausted. One of the barriers to the
sustained growth of the Russian Internet and its potential as a
marketplace is the extremely low possibility for deriving financial
income from the selling of services or goods online as Russian
consumers have such low levels of disposable income. Many companies
investing money in Internet projects are too optimistic expecting a
short period before seeing a return on their investments. After a
few months of non-profitable operation, many projects reduce their
investments for supporting and updating of information. As a result,
the number of visits goes down and finally the projects fail.
The only chance for
the survival of non-profitable Internet-based projects are close
linkages with traditional mass-media methods of information
dissemination and a focus on the traditional servicing of clients.
In this case, the Internet is part of a trade information project, a
"show-case", with the main goal being to attract clients
to traditional services.
- Client
Care
A serious
disadvantage of many Russian Internet based trade information
projects is the low attention given to visitors and clients who have
visited the site at least once. For example, the SIORA-net website
does not even have a registration system for clients/visitors.
Generally, the low level of management and client care departments
are the main reason of failure or the inefficient operation of most
of Internet projects.
- Remember
me?
The absence of the
registration of visitors is a major reason for the inability of
providers to remind clients about the latest news and updates of a
trade information site. On the other hand, another negative effect
results from bothering registrated users too often with unimportant
news. It is happening over and over again, particularly with those
sites focusing on direct sales. This situation is making clients
tired and pushes them to sign-out from the news updates.
Accounting for the
fact that most Russian Internet users mainly use email and do not
surf Internet resources, it is pretty effective to send news and
cooperation offers via email. One very popular resource, which
utilizes this feature professionally, is Subscribe.ru (http://www.subscribe.ru
or http://www.felist.com). Currently they have about 800,000
subscribers to almost 5,000 mailing lists.
- News
and Anecdotes
One of the specific
features of the Russian Internet is the willingness of people to
read local political and economic news and anecdotes. For a trade
information site, this point may seem very questionable but, still,
retaining visitors on the site for a longer time makes them more
likely to return back again and again. In the case of a commercial
component, like advertisements on the site, it also increases the
number of hits.
- Development
of the Internet in the Russian Federation
Generally, the
Russian Internet is developing very fast. Based on the relative
growth of the number of users, Russia is one of fastest developing
Internet communities. The total number of Internet users is
estimated as 8.5 million with a core group of 3.5 million people.
Accounting for the total Russian population, these figures are not
very big and still have to be developed. The main problem of the
expansion of the Internet in Russia is the old, poor quality local
telephone companies and infrastructure.
The Russian
Government has accepted the programme "Electronic Russia".
According to this programme, the number of Internet users should
reach 20 million people by the year 2005.
According to the
estimation of Yandex (http://www.yandex.ru) the Russian Internet (Ru-net)
has about 318,000 web-servers, which contain about 42,600,000 pages
with total size of 684 GBytes. Many former USSR countries are
actively using Ru-net and also contribute to the development of a
Russian language Internet.
One of the serious
problems facing users inside and outside Russia is the small
volume of information from and about Russia in English and other
European languages. Automatic translators could partly solve this
problem (http://www.translate.ru or http://world.altavista.com).
There are also search engines such as Aport (http://www.aport.ru),
which provide translation of requests from English to Russian and
the search results from Russian to English. But the quality of
automatic translators is still very low.
Having noted the
above lack of information about Russia, there are still some Internet
based business directories that provide information about Russian
companies. Europages (http://www.europages.com) and Kompass (http://www.kompass.com)
are two examples. Lists of Russian resources in English can also be
found at Yahoo and other "western" search engines.
There is a trend for
the development of so-called "eGovernment". Many Russian
Ministries are now accessible at http://www.gov.ru. The President of
Russia announced a tender for the Website of President Putin. The
Internet is "widely and wildly" used during elections and
in political battles. From another point of view, the Russian
Government wants to control usage of Internet, at least for the mass
media.
Individual companies
and associations of big companies are already largely presented in
Russian Internet and have trade promoting web sites. Both big
(http://www.vpk.ru) and small (http://www.rcsme.ru) businesses are
moving to the Internetm creating companies' web pages. Often, these
pages can be hardly found even by the staff of a company. Education
and training in the usage of the Internet is very necessary but not
in demand in Russia.
Development of
hardware (telephone lines, high-speed interregional connections,
etc.), increasing the knowledge of people about the Internet and the
main benefits of its usage as well as general economic growth and
wide usage of the English language are the main components necessary
for the fast development of foreign trade between Russia and the
world business community.