CURRENT TRENDS OF INTERNET COMMERCE DEVELOPMENT IN RUSSIA. A. V. Gubareva 1, K. E. Kovalenko 2*, M. N. Semyakin 1, S. P. Stepkin 3

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1 Journal of Fundamental and Applied Sciences ISSN Research Article Special Issue Available online at CURRENT TRENDS OF INTERNET COMMERCE DEVELOPMENT IN RUSSIA A. V. Gubareva 1, K. E. Kovalenko 2*, M. N. Semyakin 1, S. P. Stepkin 3 1 Ural State Law University, Yekaterinburg, Russian Federation 2 Altai State University, Barnaul, Russian Federation 3 Russian State Social University, Moscow, Russian Federation Published online: 7 March 2018 ABSTRACT This article provides analysis of actual problems in internet commerce development in Russia and abroad (on the example of PRC s experience). The author states the presence of grey areas the result of which is fragmentation into national segments only from the point of view of control for the internet space. They have worked up the Strategy of electronic commerce development till the year 2025 in Russia, according to which the share of electronic commerce in the overall volume of trade is planned to be up to 20% by Keywords: Information legislation, foreign economic activity, cross-border trade. Author Correspondence, kovalenko1288@mail.ru doi: /jfas.v10i6s INTRODUCTION The informational potential of a state and society affects the provision of high economic level of population, therefore, close attention in the world is paid to information, informational resources and systems. It is becoming evident that the more opportunities in the infomation sphere the state possesses, the more possible that it can achieve strategic advantages and economic prosperity. By the end of XX century, especially due to mass usage of global telecommuncation network Internet, informational processes have become of international Journal of Fundamental and Applied Sciences is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Libraries Resource Directory. We are listed under Research Associations category.

2 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), importance. Dynamic information changes in the modern society call for the necessity of their complex analysis and understanding from the side of juridicial science that yet to create stable theoretical positions in forming law basis of more close integration between states in the international informational sphere[1]. The process of working up and acceptance of international regulatory law documents that define cross-border mode of forming and usage of information, including that transferred over global telecommunication networks, currently, possesses discrete character; their appearance often is called by uncontrolled evolution of informational society and its controversies. There is a need appeared to work up an all-round model of management on the basis of international orgnizations. It is required to urgently work up universal rules of states behaviour in the informational space for international information security. 2. RESULTS AND DISCUSSION There was a project in the sphere of international information security prepared by the members of Shanghai Cooperation Organization in 2015 and proposed for consideration in the UN, which allow to eliminate conflicts in informational space. Leading countries in the area of informatization perform an active search of the ways to approximate international and national legislation defining the main parameters of legal regulation of information exchange at the international level. The experience of high-level meetings of the leaders of national departments in the area of informatization tells about that. Thus, on December 16, 2015, D.A. Medvedev took participation in the second world-wide conference concerning the Internet, having said that the Internet shall remain an open, global and distributed resource. But elements of state regulation for the network management are necessary. Legal constructions do not follow the onrush of technology and information transfer. There are a lot of questions in front of all of us. How to create a border between online and offline jurisdiction? How to guarantee the right of people to privacy? How to protect author s and other exclusive rights? Who will guarantee stable operation of the Internet critical infrastructure? How will a distribution of numbers, addresses be performed, in other words, what international structure will do that and by what rules? [2] Until the grey zones exist in the regulatory legal

3 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), environment, the result will be only a fragmentation into national segments from the point of view of control for the internet space. The state concernment from the point of view legal regulation of the mentioned sphere is clear. But there exist other points of concern. Currently, more than a half of our population use the Internet (this is almost 80 mln people). The country has a big territory located in 11 time zones. It is principally important for our country to provide equal trouble-free conditions for people and legal entities for Internet access. Many russian IT-companies have entered world markets. Obviously, this sector will further grow rapidly, also, due to electronic commerce and service provision (including state services). A variety of authors in special literature marks the difference between the two basic terms - electronic business and electronic commerce. Thus, A. Maloshtanov states: electronic busines is any activity that utilizes the Internet opprtunities to convert internal and external connections with a view to create benefit. Electronic commerce is the most important part of electronic business. By electronic commerce is implied any forms of a business transaction that is processed with information networks... 3 So, the main difference between the mentioned terms is that electronic business - an activity, but electronic commerce is a series of transactions[3]. Herewith, as professor V.S. Belykh fairly notices: electronic commerce is a self-supported type (step) of a production process. It is included in the process of the product of labour exchange. So, representation of electronic commerce as a series of transaction is unlikely [3]. In 2015, the establishment of ANO Insitute of Internet development (IID) was an important trend of the state interest in the development of the internet industry, that has become the continuation of ideas and proposals sounded in October 2014 at Russian Interactive Week (RIW-2014) and long-term programm of the development of the russian part of information telecommunication system Internet and related economic sectors. The change of legislation proposals in was obvious and was caused by difficult geopoloitical situation, mutual sanctions and the need to provide a digital sovereignty of the RF and limitate informational and technological dependence of our high-technology sector

4 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), from the Western influence. By reference of the expert assessment of Russian association of electronic communications[4], among the legislation proposals made for 11 months of 2015, 38% were appraised neutrally or positively, for comparison - the share of such proposals for was 23%, and the total amount of the initiatives has grown for the year. The minister of communications and media of the RF N.A. Nikiforov marked that the direct contribution of the Internet in the development of Russian economics is 2.2% of GDP. A wide range of industries that is evaluated by experts as 11.6 trlnroubles (about 13%) depend on information technologies and the Internet. Almost a one-sixth part of our economics is so-called Internet-dependent industries [5]. Need to develop big private companies that would deal with the development of electronic commerce is caused by the statistics of electronic commerce implementation: 63% of active Internet users (hereafter - AIU) perform online payments for goods and services; 49% of AIU perform online money transfers between individuals; 28% of AIU buy goods via advertisements; herewith, less than a half - 31% of AIU buy their goods in foreign online shops. Thus, at year-end 2014, the volume of cross-border trade (buying in foreign online shops) was 19.1 blnroubles that is 42% higher than the previous year. This data visualizes the trends of internet industry development and its influence on international economic activity. Electronic commerce includes two basic directions: business-to-customer and business-to-business. If the first one is electronic retail trade, the second one includes all levels of informational and managerial cooperation between companies (as a rule, commercial organizations). In the latter case, we talk about electronic wholesale trade. In the sector business-to-customer there operate electronic shops, catalogues of goods, shopping streets, pre- and after sales services are presented, buyers communities are formed. In the sector business-to-business, contracts are executed and/or performed via electronic methods on a bilateral basis or within a specialized electronic platform[6]. In tge Presidential address to the Federal Assembly for 2016, V.V. Putin has ststed one of the projects that can be creation of large private companies in the sphere of electronic trade so russian goods are supplied via the Internet into all countries of the world [7]. In the beginning of 2016 this proposal was supported by Ruslan Bagdasarov who offered to create a platform which provides finance and juridicial services helping russian companies to

5 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), invite funds and establish contacts with foreign markets and which perform important functions - from common trade to support of new business project of young russian companies with innovations or original ideas that will be supplied to the world market[8]. The man objective of this project is that any item of goods of a russian manufacturer be protected in accordance with the western legislation. The first trade online platform with 100% of russian investments is to start operations in China in June 2016 and it will be positioned as ideal solution for manufacturers of goods of national consumption who tend to enter the chinese market. The idea of its creation is related to the fact that yearly growth rates of cross-border trading is 30% in average but the trade turnover between China and Russia should reach 200 bln dollars by This platform will deal both with wholesale trading for distributors orders and other corporate clients in China and retail trading to individuals from the warehouse in Shanghai, providing related services to manufacturers - for example, transporting and logistic services and translation of required documentation and information about goods. Experience of creating this type of companies does exist. Thus, well-known chinese public company working in the industry of internet commerce Alibaba Group which controls several structures including - Alibaba.com (Alibaba China, Alibaba International) - the company core asset, a trading platform for companies; - AliExpress.com an online shop dealing with retail trade and small wholesale trade (with an oportunity of free delivery via China Post Air Mail, the speciality of the service is that the seller receives money only after goods delivery); Taobao.com an online retail market, online shop and online auction (all offered goods can be purchased via AliExpress); Alipay a platform for online electronic payments[9]. Main types of activities are trade operations between companies B2B, retail online trading. The participants use the unified software for all structures to manage the enterprise and databases of goods and enterprises sorted by region and industries[10]. On August 24, 2014, the company annonced its official report[11] according to which it received $ 2.54 bln of revenue for two quarters of 2014 (50.81% at an annual rate and 9.41% comparedly to the first quarter), $ 1.99 bln of net profit (+ 182% at an annual rate), the number of active buyers has increased up to 279 mln (50.81% at an annual rate and 9.41% comparedly to the previous quarter) [12].

6 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), CONCLUSION The objective of economic cooperation between Russia and China is to reach maximum national interests but, against the background of economic globalization, the traditional national interests have flexible peculiarities. But when a country uses goods of international trade and international investments, its interests of a sovereign state shaould also be limited by international rules, international practice and the selection of other countries policy direction15, this requires the rules to be created by the international society. In October 2017, there was proposed the Strategy of electronic commerce development till the year 2025 in Russia, according to which the share of electronic commerce in the overall volume of trade is planned to be up to 20% by The proposed strategy is aimed onto creation of additional market mechanisms that provide growth and development of electronic trade in Russia, efficient usage of its resources and potential including by: removal of excessive bans and elimination of legal conflicts for electronic trade that work in traditional trade; provision of efficient legal regulation of electronic transactions, improvement of pay systems in electronic transactions, provision of legal protection for the participants of electronic trade; provision of balanced conditions for activity of russian and foreign online shops that sell goods directly to individuals in Russia; improvement of cybersecurity in the area of electronic trade on the internal market and in cross-border trade. 4. REFERENCES [1]Gubareva A.V., Gulemin A.N. Security thread for personal data: modern problems // Law and society. No Pp [2]URL: [3]Citation on: Belykh V.S. Legal regulation of entrepreneurial activity in Russia: monograph. - M.: ТК Wellbe, Publisher Prospect, Page 322. [4] Laws and bills in legislation related to the Internet for the period January 2015 November 2015 // URL: iblock/227/2015_12_raec_monitoring_legislation.pdf. [5]URL:

7 K. E. Kovalenko et al. J Fundam Appl Sci. 2018, 10(6S), [6]Belykh V.S. Legal regulation of entrepreneurial activity in Russia: monograph. - M.: ТК Wellbe, Publisher Prospect, Page 322. [7]URL: [8]URL: [9]URL: [10]Alibaba will start an international version of the service competiting with ebay, Lenta.ru, November 21, [11]URL: and-full-fiscal-year-2015-results. [12]Mirolyubov Vladimir. Alibaba Group reported in for the second quarter of 2014 // E-pepper.ru ( ). [13]Tan Chu Chan. Strategic transformations of chinese-russian trading economic development at a background of the economic rise in China and Russia // Academic journal of russian research No5. How to cite this article: A. V. Gubareva, K.E. Kovalenko, M.N. Semyakin, S.P. Stepkin. Current trends of internet commerce development in Russia. J. Fundam. Appl. Sci., 2018, 10(6S),