Cross-border e-commerce package deliveries between Northern Finland and Russia

Abstract. The Russian e-commerce market has been growing rapidly during the past years and this growth has only accelerated since the beginning of the COVID-19 pandemic. Russia is Europe’s largest internet market and thus presents opportunities for companies which hope to grow their e-commerce sales. Russian consumers trust and value Finnish brands and products and are likely to purchase them using cross-border e-commerce, especially now that the border is closed due to the COVID-19 pandemic. Even though Finnish companies have successfully incorporated e-commerce into their businesses with their domestic customers, only a very small percentage of them practice cross-border e-commerce. This is why it is important to recognize the barriers companies face regarding the Russian e-commerce market and the cross-border e-commerce package deliveries. The purpose of the thesis is to overcome the barriers by finding ways to develop cross-border e-commerce package delivery between Northern Finland and Russia. The regions of Northern Ostrobothnia, Kainuu and the Republic of Karelia were chosen to be the main focus of the study as they all neighbor the Finnish-Russian border and each other. In order to identify possible ways to develop the delivery process between the regions, the knowledge that the companies have about the Russian e-commerce market, and the barriers they face regarding the market and the cross-border e-commerce package deliveries of the market need to be identified first. The research follows an abductive process where the existing literature is studied first, and the empirical analysis is done based on the formed theoretical framework. The research is conducted as a qualitative multiple-case study and the empirical data is gathered via four semi-structured interviews with company representatives. The interviewees consist of company representatives from the Northern Ostrobothnia and Kainuu regions who practice cross-border e-commerce to Russia and a logistics service provider specializing in cross-border e-commerce package deliveries to Russia. Based on the data, companies in the regions do not recognize the opportunities of the Russian e-commerce market very strongly. The majority of companies do not see Russia as a strategically important country despite its great growth potential. The main barriers that companies face regarding the e-commerce market in Russia are lack of knowledge and language barrier. As for the issues in the cross-border e-commerce package delivery to Russia, the unclear procedure regarding returns and exchanges of delivered products and issues with overly strict customs procedures were discovered. The cross-border e-commerce package delivery between the regions can be developed by sharing information about the Russian e-commerce market and practicalities relating to it, making the delivery process as customer friendly as possible, and creating a more flexible customs protocol