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Further duty-free import threshold reduction may slow down Russia's e-commerce — eBay

CEO of eBay in Russia, Israel and the emerging markets of Europe Ilya Kretov said that although supporters of lowering the threshold often refer to the experience of Western European countries, "one can’t blindly follow them"

MOSCOW, December 11. /TASS/. Further reduction of duty-free import threshold for parcels delivered from foreign online stores to Russia may slow down the growth of the e-commerce market in the country and trigger the development of gray imports, General Manager of eBay in Russia, Israel and the emerging markets of Europe, Ilya Kretov, told TASS.

"Further reduction of the duty-free threshold will primarily affect consumers who won’t be able to save on purchases at more affordable prices on foreign sites. Such a change will slow down the pace of development of the e-commerce market in Russia, which actually has just begun to emerge, and local companies will receive an incommensurable advantage over foreign companies. However, local players already have more opportunities, for example, the shortest delivery times and quick return of goods, " Kretov said.

According to him, although supporters of lowering the threshold often refer to the experience of Western European countries, "one can’t blindly follow them." "One cannot compare the Russian and Western European e-commerce markets either," he added.

"If we take Germany, the share of e-commerce there is measured in double digits, but in Russia it is very small. In addition, this innovation can lead to the development of a gray import market and lower product quality, as it happened in Belarus," Kretov said.

As an opposite example, Kretov cited the United States, where several years ago the threshold of duty-free import was raised from $500 to $800, which "played into the hands of customers."

Earlier on Wednesday, it became known that Russian Prime Minister Dmitry Medvedev instructed First Deputy Prime Minister and Minister of Finance Anton Siluanov to discuss within the Eurasian Economic Union a proposal to reduce duty-free import threshold for parcels delivered to Russia to 100 euros from July 1, 2020, to 50 euros from January 1, 2021, to 20 euros - from January 1, 2022.

The Russian authorities lowered the threshold for duty free purchases Russian citizens make in foreign online stores from 1,000 euros to 500 euros as of January 1, 2019. This was done in compliance with the rules of the new Customs Code that was adopted by the countries of the Eurasian European Union, namely Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

The measure implies that a buyer from Russia should pay customs duties for the purchases and parcels he ordered online in foreign stores if their total price tag exceeds 500 euros. The cost of purchases is accumulated within one month and the weight of a duty-free item for that period should not exceed 31 kg.