This week GDC announces the newest member of the consortium, a Moscow-based data business that specializes as Russia’s best in-country source for address data.
Let’s call a spade a spade: This one was tough. It was tough to identify the right Russian partner. It was tough to “lean in” to a Russian solution during a time of uncertainty when so many eCommerce businesses are avoiding that market. And it was tough to work through the technical aspects of making the best in-country Russian solution work for a client base that knows very little about Cyrillic-based alphabets.
After a few months of working through these challenges, we now see why other global address services have struggled so much to offer a quality Russian solution!
But that’s what makes this Russian address solution such a valuable addition to the consortium. Through rigorous analysis and testing, the GDC team has verified that this new partner offers true benefits. Its combination of wide geographic coverage, extensive data records, and sophisticated business logic provides a superior source of “lift” over what you can get from any of the global generic address solutions.
In the end, the “tough” is worth it. We can provide our Worldview customers with address information they simply haven’t been able to access before. In the process, we are helping open up Russia to eCommerce merchants, platform companies and delivery services that previously saw these same obstacles and couldn’t find a way around them.
With Russia fully integrated into Worldview, we now offer best available address services with localized intelligence for 35 countries (see the list here) in addition to the full global service from our postal-based generic address partners. We continue expanding with up to three new local providers each month.
Let’s consider briefly what that Russian opportunity represents for eCommerce, then we’ll highlight the specific challenges of transliteration, and finally we’ll share a little more about this partner and why we chose them.
The Russia Opportunity for eCommerce
There’s something about companies that lean in to promising growth opportunities even when the headwinds are strong. They take on some risks, sure, but if everyone else goes away than they also stand to make all the gains.
We’ve been seeing elements of this in Russia over the past year. There’s no question the country has promising growth prospects for cross-border commerce. According the The Paypers, Russians buy over US$16.5 billion in eCommerce goods each year, and that amount is compounding at nearly 20 percent year over year 1. Yet with all the uncertainty there (slide in oil prices, rampant inflation, military action in Ukraine and pockets of civil unrest), many Western companies have pulled back investments. They haven’t had the appetite for all the near-term risk.
But other companies have taken the lean-in approach, doubling down in Russia because they believe the opportunities there trump today’s risk. A recent report by China Securities Journal says that eCommerce firms like Alibaba and Taobao have taken advantage of Western firms pulling back to grab 70% of Russia’s annual US$3.5 billion cross-border spend. 2
As Russia stabilizes, will it be too late to win back market share from the Chinese eCommerce giants? For the companies now pulling back, the long-term risk seems to be missing out on the chance to build deep relationships with Russian consumers. One you concede that, it can be very hard to get it back.
The company OZON.ru gets the lean-in mentality better than most. Under the guidance of its French CEO, Maelle Gavet, OZON has been relentless about grabbing market share in Russia. Guided by her belief that the country will ultimately have one hegemonic eCommerce platform (like Amazon in the US, Alibaba in China or Mercado Libre in Latin America), Gavet has consistently invested for aggressive growth irrespective of Russia’s economic climate. While Amazon and eBay have dabbled a bit when the business cycle was at its best (but retrenched as the economy soured), OZON keeps plowing capital into inventory, warehouses, payment systems and its own courier service for distribution. 3
For Western eCommerce businesses to have a chance in Russia – be they platforms, individual merchants or all players in between – they have to find ways to invest now. Even as conditions seem so volatile for cross-border trade.
GDC has taken a lean-in approach to Russia. To help our clients gain a toehold in this important market, we’ve invested both in this address partner and in the technology necessary to support complex transliteration from Latin script alphabets to Cyrillic. We’ll turn now to a brief overview of that challenge and how it allows us to fill the gaps in Russian coverage left by the major global generic address systems.
The Challenge of Cyrillic
The transliteration and transcription challenges are tough, and that’s a dirty secret global address solutions don’t like to talk about.
It’s hard enough to move among all the languages that use the Latin script alphabets, but at least the letters stay the same. The bulk of the work is in creating ways to cross-walk, for example, the English word “street” to the German word “strasse.” You create the transcription elements, you program rules to cover the occasional diacritics issue, and then you fine-tune the logic to make sure the output presents in the ways locals expect to see it. That’s oversimplifying, of course, but it captures the basic idea. When you run into problems, it’s pretty easy to find solutions.
But when you’re dealing in different alphabets, the challenges are compounded. You can’t even transcribe until you’ve transliterated. For example, when someone inputs the Latin version of “Moscow,” you have to transcribe it to “Moskva” and then transliterate it from Latin to the Cyrillic script. The same is true for all elements of the address like the country names in the Russian Federation, the region names, the cities and villages, and all the streets. Now add to that abbreviations, short-hand and common misspellings.
There’s a lot to account for going from Latin to Cyrillic and back again, and it’s anything but a precise science. But if you’re creating an address intelligence service for clients looking to expand their business into Russia, you must invest in doing this.
Again, it’s tough. But Russia is an important trade lane and presents a lot of growth opportunity for eCommerce. Our Worldview clients have told us they want it, and so we’ve leaned in, making the investment both in finding the right Russian in-country partner and in developing a transliteration engine to move the addresses smoothly between Latin and Cyrillic.
About Our Russian Partner
Finally, a little about our Russian partner. While we provide our clients with access to generic global address verification through our Worldview API, we recognize the significant gaps in these generic services. So our model is to go into key countries, identify companies that provide best available address intelligence for those markets, and test the in-country providers against the generics. If the in-country providers demonstrate significant “lift” over the generics, we start the process of making them available through Worldview.
Country by country, we are filling in the gaps left by generic services. As we mentioned before, we have 35 best in-country partners now, and are expanding that number by integrating three new countries a month.
We found our Russian partner after a lot of searching. The company has spent over 10 years building and refining their data sets and business logic, and they has earned the trust of Russia’s largest companies in banking, insurance and retail. When they need to send parcels or critical documents to Russian businesses or homes, they first verify their addresses through this service.
They offer wider coverage of Russia than the generics, both in terms of geography and population. They pull data from a wide range of sources, spreading beyond postal and mapping data used by most generics. They offer sophisticated business logic for verifying and enriching Russian addresses. And they refresh the data frequently to ensure it’s as up to date as possible.
Most importantly, they offer that “lift” over generic services when it comes to Russian addresses, qualifying them to be part of Worldview.
So, we welcome our new Russian partner into the Global Data Consortium. We’re excited to open up access to Russia for Worldview customers. And if you’re looking for help in Russia, or any other country in our global platform, give us a call. We’d love to help expand your Worldview.