Earlier this summer, we published a Digital IQ Index report that looked at how successful prestige brands’ digital efforts have been in the Russian marketplace over the past year. One of the biggest areas of missed opportunity for global brands, in particular (our report assessed 84 global and local Russian brands), involved misguided search strategy. Unlike here in the U.S. and in most other countries around the world, Google is not the go-to search engine for Russians. That would be Yandex, which launched just eight days after Google Search in September 1997. With a 61.6 percent share of all Russian searches–and nearly half (47 percent) of the search demand for the brands featured in our report–Yandex is the search engine brands wanting to reach a wider Russian audience need to focus their organic and paid search efforts. Despite Russia’s rapidly growing e-commerce sales, which are projected to reach $36 billion by 2015, this isn’t yet the case.

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This week, Yandex announced that in November it would be transitioning its product-search service Yandex.Market (which currently sends users to third-party sites to complete purchases), into the country’s largest online marketplace. At present, Yandex.Market has 13,000 partner stores and approximately 17 million users–but brokers no transactions between them on its site. Though Yandex reaps a small profit from the referral traffic to third-party sites, its new in-house marketplace will allow users to stay on Yandex.ru, leading to bigger orders and a lot more money for the company. Leeza Kuznetsova, the Research Lead on L2’s Russia Prestige report, believes Yandex’s decision to expand into the online marketplace is an extremely smart one. “This step comes after a series of similar launches aimed at matching Google’s product offerings, like the Yandex browser and Yandex mobile app store,” she says. “Combining its existing Yandex.Market functionality with its own e-wallet support (Yandex.Money), Yandex will be in an even stronger position to stave off competition from both Google and eBay.”

When the new Yandex.Market launches next month, eyes will be on these competitors as well, waiting to see what their next move will be to grow their shares in the increasingly e-commerce friendly Russian market.

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