Cainiao, Alibaba’s logistics arm, will install 1,000 lockers in Russia. This is likely to be just the tip of the iceberg. Analysis from Tatyana Yampolskaya and Marek Różycki (Last Mile Experts).
In August 2020, Cainiao announced its plan to reduce delivery times to Russia’s biggest cities (more than 500,000 inhabitants) to 10 days by the end of 2021 from the current 15-30 days.  A key part of this plan is the recent announcement from Cainiao about the development of its own parcel lockers network in Russia. .
Russia is the first country where Cainiao, the logistics arm of Chinese e-commerce giant Alibaba, will set up its own parcel locker network. This is probably because 25% of its total volumes are already delivered here via 15,000 partner-operated pickup points (excluding Russian Post offices). Russian e-commerce shoppers are already familiar with parcel lockers, so with this widespread awareness of out-of-home (OOH) delivery options we can expect a successful launch of the first 1,000 Cainiao parcel lockers, with more to come no doubt.
There are currently about 15,000 parcel lockers in Russia  – the number has increased by 134% from May 2019 to September 2020 . Doubtless, the Covid-19 crisis highlighted the advantages of parcel lockers in comparison to PUDO delivery and the share of lockers in OOH delivery increased from 22% in May 2019 to 35% in September 2020.
As a consequence, we have seen interest in lockers not only from Cainiao, but also from some of the strongest local players such as SberLogistics, with its own plans to develop a 10,000-strong locker network located in branches of Sberbank and in Diksi retail stores. Russian Post has also announced the extension of its network up to 5,000 lockers and X5 Retail Group is developing its own 5Post network in Pyaterochka stores.
The hype around parcel lockers does not seem to be affecting PUDO growth; from May 2019 until September 2020 the total number of PUDOs in Russia increased by over 20%, with some 40,000 new PUDO points. PUDOs offer a wider range of services such as ‘try & buy’, longer storage periods, and the ability to carry slightly heavier/larger parcels.
In fact, since 2009 the PUDO concept has gone through a real evolution in Russia and has become an important part of the e-commerce last mile. PUDOs, together with parcel lockers, form OOH delivery services, allowing consignees to choose the delivery option depending on type of goods, time, price, place, payment preferences, etc. If you buy clothes or shoes, you can either use PUDO with ‘try & buy’ or, if you don’t want contact with anybody or you would like to pick up a parcel at night, then a parcel locker is your best bet. Also, the majority of Russian Post’s 42,000 post offices provide a PUDO service – which is often the only available delivery option due to the coverage and penetration of this network.
Despite the fact that share of home delivery is decreasing in comparison with OOH, 2020 further pushed progress in delivery times for home delivery and facilitated the successful launch of super-fast delivery startups with 15-30 minute delivery times in the e-grocery market (Samokat and Yandex Lavka).
Online shopping in Russia is growing quickly (+44% to 2019) in the face of Covid-19 and has accelerated the development of OOH delivery services too. Omnichannel shopping now drives the growth of last-mile services and today the diversity of retail formats is becoming less important than the diversity and quality of last-mile services. The sheer size of Russia means that development of a coherent nationwide locker capability will take time but judging by the Chinese experience (over 400,000 parcel locker banks in place), where there is a will, there is always a way!
Photo credit: File photo: IC
 TASS, 04.08.2020
 TASS, 29.10.2020
 Ecomhub.ru, “Number of parcel lockers in Russia”. 11.09.2020
 Data insight, “E-commerce market. Growth forecast 2020-2024”
Marek Różycki is managing partner at Last Mile Experts, specializing in CEP and e-commerce last-mile advisory.
Tatyana Yampolskaya is pro-partner, Russia, at Last Mile Experts, and advises clients on business strategy, market entry, sales and operations.