Russian consumers are accustomed to poverty, but choose Russian

“The post-turbulence” – so defined the consumer market of Russia in 2016 analysts of Fashion Consulting Group. Behind this concept there is a habit of declining living standards and “blurring the boundaries of perception of quality”, but also searching for the economical brands with a clear modern positioning and buying habits to online purchases. The buyer uses what is called “saving model of consumption”.

Macroeconomic impact on the Russian retail depends on the oil price, in 2016 it was positive, same as the policy of “import substitution.” But the salary of Russians in dollars decreased by 1.6% (in January-November, 2016 it averaged around $540 or 36’195 rubles). This is not surprising, because 24% of Russian companies cut staff, 18% of companies cut wages, and 10% other benefits.

According to Fashion Consulting Group, the income of the population in 2016 has decreased, despite the fact that official statistics shows increase +2.2% to 2015. Over 20 million Russians live below the poverty line (every 6th citizen against every 7th in 2015 is extremely poor). The quantity of poors in Russia is 30% now, 40% of the population find money to buy any clothes with difficulty, and 85% feel the same for household appliances.

This is evident when looking at the Russian market of clothes. The volume of the clothing market in 2016 amounted to $34.3 billion (+10.2%), while the share of cheap clothing increased from 60% to 65%. At the same time, the number of shops of global networks increased, while the number of Russian chain stores decreased. 38% of people are now looking for discounts and sales, they carefully study and compare bids.

Anush Gasparyan, commercial Director of Fashion Consulting Group, in her speech at the Russian retail forum (Russian Fashion Retail Forum, RFRF) considered one of the options for the modern consumer satisfaction is a multi-brand store with a wide range of products, with the ability to choose and compare the price.

Another important change in the market is a tripartite promotion of domestic goods. First of all, it is the will of Russians to buy “Made in Russia”, secondly, it is the introduction of “Russian themes” by Russian fashion designers, and thirdly, the willingness of multi-brand networks to represent Russian brands.

Sources:

Fashion Consulting Group [1]