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(English) US health and beauty online giant iHerb plans to invest $100 million in Russia

09 октября 2020

(English)

iHerb, one of the most successful international e-commerce companies in Russia, is planning to invest some $100 million in this country in the next two years.

These investments are aimed to “improve the Russian customer services, support and expand product export by Russian manufacturers, [develop] partnerships with Russian logistics companies, expand in-house technology development center operations, and build robotic distribution centers,” the company stated, as quoted by the TASS news agency.

Specific details were provided by Russia General Director Ilya Minin in a media interview earlier this week. iHerb will participate in a customs bonded area experiment led by Russian Post in Tatarstan, a region 1,000 km east of Moscow. Minin expects this new logistics process to decrease average delivery time “from 8 to 2-3 days.”

iHerb does not rule out creating its own distribution warehouse — managing not only import, but also export product flows. What is indeed new in these announcements is that iHerb, which so far focused on selling foreign products to Russian online consumers, is now planning to work the other way round as well. As an example of product which iHerb could sell abroad, Minin cited R.O.C.S., one of the most popular tooth pastes in Russia.

To increase the appeal of Russian products, iHerb considers launching an international marketing education program for local brands.

The US company also intends to hire Russian programmers to support its international IT platform.

A partnership strategy with Russian scientific organizations, as well as charities, is also under consideration, though not specified yet, said Minin.

No iHerb app for Russians

This past spring, the Russian authorities blocked access to iHerb’s mobile application from the Russian versions of App Store and Google Play. According to the authorities, some of the products presented in the app did not comply with the technical requirements of the Customs Union — of which Russia and several other countries of the former Soviet Union are members.

The US company has appealed the case in the Russia’s Supreme Court. Meanwhile Russian customers can still fully access iHerb’s website.

A global e-commerce leader for health, beauty and natural products, iHerb recently expanded its reach to 23 new countries, coming in addition to the 165 countries and territories it already served. iHerb never disclosed its figures for Russia.

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