The emergence of Internet commerce was expected to bring the markets closer towards perfect competition. On the demand side, using search engines consumers can process information on products at online and off-line shops. On the supply side, a dramatic decrease in fixed costs of setting up a shop enhances entry and exit of firms in online markets. The present study aims to explore the relationship between market structure and pricing strategies of firms provided regional heterogeneity within markets. In the present project, we propose to exploit large differences between local markets and the vast size of Russia to obtain better instrumental variables and appealing results on the relationship between entry, pricing strategies, competition mode in online markets.