Make info about your products or services available
for Russian speaking consumer audience of around 300 million people.
The
4th World's Most Widely Spoken Language
Today 290 million people (consumers) speak
Russian. Russian is the 4th World's Most Widely Spoken Language
(http://www2.ignatius.edu/faculty/turner/languages.htm)
and the most geographically widespread language of Eurasia.
As regards modern times, Russian is the 4th
language in the frequency of use in the world today, which enables one to say
that Russian is an international and a go-between language for ethnic
communities.
Russian is the first language of approximately 150 million
people and has long served as a lingua franca for millions more in other countries.
Russian is spoken in: Bulgaria, Canada, China, Czech Republic, Finland, Germany,
Greece, India, Israel, Mongolia, Poland, Romania, Russia, Slovakia, Uruguay,
United States, etc..
If we add the secondary speaker populations to the primary
speaker populations, we get the following list:
(number of speakers in parentheses)
1.Mandarin Chinese (1.12 billion)
2.English (480 million)
3.Spanish (320 million)
4.Russian (285 million)
[George Weber's
article "Top Languages: The World's 10 Most Influential Languages" in Language
Today]
Vast
Consumer Market
Russia is the
fastest growing retail sales market in the world, with the potential to again
double in size. Russia is ranked 2nd most attractive retail market in Global
Retail Development Index. Hence, Russia has emerged as a big retail
opportunity.
As most Eastern European countries slide on
the Index, Russia holds its second place position. The country's economic
attractiveness is clear: its retail market increased 19 percent and its GDP of
$740 billion grew nearly 6 percent. As a result, the steady stream of new
foreign retailers continues. Retailers continue to be attracted by not only the
size of the Russian market, which is home to 143 million people and an
estimated $280 billion in annual consumer spending, but also by its potential
growth.
Russia's
size of population creates enormous demand potential for all kinds of goods
and services. Insufficient domestic supplies means the gap is largely met
by imports.
The emergence of the consumer market in Russia has brought with it foreign investment, either directly in manufacturing and
distribution, or through product sales. The region is increasingly becoming a
focus of attention from many of the world's leading players.
Russia's re-entry
into the world economic system has opened up an enormous and largely
unexploited market for western goods and services. Russia possesses a
well-educated work force and vast natural resources; given these conditions,
business opportunities in the region can only increase over time. A large
number of US companies have already established business relationships with Russia, and western European firms are even more actively investing in the region.
What's attracting international companies
is the surprising strength of the Russian consumer, not just in Moscow but also, increasingly, in other cities catching up with the capital's breakneck
economic development. Russia's gross domestic product grew by 6.4% last year
and has averaged 7% growth over the past five years. Dollar income per capita
has risen by nearly 29% per annum over the same period, faster even than in China.
Rising disposable income and a growing
middle class have caused an explosion in all types of consumption. Last year,
sales of new foreign cars reached 600,000, a 57% increase and a sixfold rise
since 2001. Mobile-phone ownership has mushroomed from 3 million in 2000 to 80
million today. No less than a fifth of all households own a computer, four
times the figure in 2001. "The most striking thing is the overall growth
of consumer potential. It's shown by literally all measures," says
Alexander Demidov, managing director of GfK Rus market research in Moscow.
At latest count, Russia was home to an
estimated 88,000 millionaires, according to a study carried out by Merrill
Lynch & Co. (MER ) and Capgemini. And it's not only the millionaires who
are buying cars at the Rolf dealership chain, Russia's largest foreign-car
importer and distributor, says President Matt Donnelly. He estimates that 8
million Russians earn at least $2,000 a month, and 3.5 million earn double
that. "It doesn't sound like a lot, but they have masses to spend,"
he adds.
That's because some 70% of Russians' income
is disposable, vs. around 40% for a typical Western consumer. "We have 13%
flat income tax, subsidized housing and utilities, and 10% savings. The rest of
it is pretty much out there being spent," says Natalia Zagvozdina, a
consumer-goods analyst at Moscow investment bank Renaissance Capital.
No one should underestimate the consuming
potential of Russia's wider public, either. Multinational food and drinks
companies, the biggest consumer-goods investors in Russia, have already
discovered that mass-market opportunity. "As soon as people step out of
poverty, they become potential Nestlé customers," says Bernard
Meunier, country manager for the Swiss food giant, which has pumped $500
million into Russia to date. Nestlé's most recent foray, a $120 million
instant-coffee factory that opened in Krasnodar, in southern Russia, last November, was its first international greenfield investment for two decades. Why there?
With an average of 250 cups per person per year, Russia consumes more instant
coffee than any other country.
Analysts calculate that there's still
plenty of potential for growth in fields such as tourism and financial services
as well as consumer durables like automobiles, furniture, and electronics.
Appliances giant Whirlpool Corp. is planning to make washing machines in Russia, in partnership with Turkey's Vestel Group. American Express Co. (AXP ) launched its first
ruble credit cards in December, working in partnership with Russian Standard
Bank. "This is a market for the future, and we think it's got real
opportunity," says American Express Executive Vice-President Gary L.
Crittenden.
There are still openings for relative
latecomers to the market, too. "The results are far better than even our
most optimistic forecasts," says Leszek Krecielewski, country manager for Ada (Mich.) direct-sales giant Amway Corp., which began selling cosmetics and detergents
in Russia last March. Sales reached $110 million in nine months, above
forecasts of $100 million for the first year, and were a big chunk of Amway's
$600 million in European sales. The company projects Russian sales will rise to
$200 million this year.
Will the consumer boom last? Russia's economy remains closely tied to global oil prices and could face an upset if
prices plunge. Then again, persistently high oil prices mean economists are
raising their forecasts of Russians' future income and consumption. Goldman,
Sachs & Co. (GS ) predicts Russia will be the world's eighth-largest
economy by 2025, with per capita income of $45,000.
Experts say Russians are natural born
consumers who want to simply spend every dollar that they have.
The consumer market is one of the most
attractive sectors of the Russian economy for investors. This can be seen in
the results of a marketing study called "The Top 100 Emerging Companies of the
Russian Consumer Market," which was conducted by an independent research
company called Interactive Research Group (IRG) with the support of Deloitte
& Touche, Societe Generale and Altium Capital.
"Consumer demand in Russia is on the rise as real incomes increase, most significantly in Moscow and St. Petersburg.
This is evident not only in the quantity, but also the quality of goods and
services demanded by Russians," said Evgeniy Gavrilenkov, Chief Economist
of Troika Dialog investment bank, "It is increasingly common for consumers
to pay premiums for well known brand names and product quality guarantees.”
MARIA VAKATOVA: I think that Russians in
general are born innovators and splurgers. They like to spend the money and they
are greedy for life in general, and they like to feel life to its full completeness.
And if there is something new on the market, if something new appears this good
or this service definitely finds its consumer.
EMMA GRIFFITHS: Some examples - DVD
players, stereos and kitchen appliances are, in shopping parlance, walking out
the door. Moscow is one of the world's biggest markets for mobile phones. And
this year Russians have spent nearly $30-billion on cars. Those on the average
income of just $400 a month are spending, too. They buy clothes and household
items and treats for the pantry.
Some money is saved - stuffed under the
mattress. But Maria Vakatova says the spending urge is strong in the Russian
soul.
MARIA VAKATOVA: The first impulse of a
Russian person when he gets his salary is to spend money and to buy something.
And the first impulse of a westerner - how to save money. According to the same
research, which is done in London, young people aged 21 years old, they already
have their deposit accounts and their pension accounts. They start thinking
what awaits them in the future when they become old when they're 21. And for a
Russian person it's a little bit odd, I think.
EMMA GRIFFITHS: That may have something to
do with the country's turbulent history. Russians still don't trust their
banks, and political stability is a newfound phenomenon. For them it's a case
of shop now, because tomorrow may be too late.
Retail trade benefits significantly from
the growing income of Russians, as well as from Russia's political stability
and economic recovery of the past few years.
Over the next four to five years, Russian
retail trade is expected to grow intensively, stimulated by macroeconomic
factors (GDP growth and increases in consumer income and spending), structural
changes in the market, and steady increases in retail company efficiencies.
Chain retailers with modern store formats stand to increase their respective
market shares significantly.
This transitional period of dynamic growth
in Russia's retail sector provides foreign companies with a unique opportunity
to tap into a rapidly evolving market.
Expand your business, make your marketing
materials available for Russian speaking consumer audience of 300 million
people.
By Vadzim Yaskevich, Phd
English to Russian translator
http://www.proz.com/profile/626296
Best Quality at Reasonable Rates
Accuracy and quality guaranteed by the 16-year experience.
Feel free to contact me for further details: vadzimyaskevich@tut.by
