Apparel Online Bangladesh Magazine Magazine March 2018 | Page 14

COVER STORY
Russia Calling…

Retail boom, economic upturn, bring focus back on Russia

Apparel exporters see new opportunities
W
orld’s largest nation
geographically (spanning 11
time zones), 6th largest economy,
boasting a population of 144 million
with per capita GDP of US $ 8,840
(in 2016), sharing close historic
and economic ties with prominent
European and Asian countries, Russia
is strongly emerging as a potent
market for retailers, manufacturers
and exporters, looking to capitalise on
its rising popularity.
After more than a decade of
rollercoaster ride – during its boom
in the early 2000s, the value of the
Russian clothing market soared from
US $ 5 billion (¤ 4 billion) in 2004
to US $ 46.6 billion (¤ 37.4 billion)
in 2005 to drop again substantially
to US $ 31.15 billion (¤ 25 billion) in
2015 (in the backdrop of economic
sanctions following the annexation
of Crimea). However, it rose again to
touch US $ 43.2 billion in 2016 and is
still now showing signs of picking up
following apparent rebounding of the
Russian economy.
Considered once the fastest growing
economy among the top five growing
nations, as per World Bank, Russian
economy is expected to grow at a rate
of 1.7 per cent in 2018 and 1.8 per
cent in 2019. Although the growth is
small, but considering higher exports
and stronger domestic demands, the
economy is expected to consolidate in
the coming years. The international
lender further maintained that the
upcoming 2018 Football World Cup will
give a boost to the country’s economy
following increased spending by the
local and foreign consumers. The
fluctuating inflation is also expected
to stabilize at around 4 per cent in
2018-19, it underlined.
The Retail Boom
The optimism is there for everybody
to see with a host of retailers and
brands flocking the Russian market…
If LK Bennett opened a (1,500 sq. ft.)
Maksym Sukhanov–General Director,
Maximum Sourcing, Vietnam
BGMEA President Siddiqur Rahman
store in Moscow’s Metropolis Mall,
so did Superdry and luxury brand
Aquazzura as well as US denim brand
Wrangler (which opened a 979 square
feet Moscow store and is planning
a total of 50 stores in the country
by 2020). The Swedish apparel
retailing behemoth H&M has also
opened 21 new stores in Russia within
a span of 12 months (till 30 November
2017), increasing its Russian chain to
134 branches now.
Apart from Moscow and
St. Petersburg, the retailers are also
now actively looking at expanding in
the tier-II cities such as Yekaterinburg,
Nizhny Novgorod, Samara and many
more. According to experts, this is
not only a strong indication of the
new-found market vibrancy but also
points at the increasing disposable
income among people outside the
thriving metropolis of Moscow and St.
Petersburg, who the retailers want
to rope in to increase their customer
base in the country. The flourishing
economy has understandably given
rise to an expanding middle and upper
class which are not only restricted to
the big cities, but are also creating a
huge consumer-centric market.
If brands such as Benetton, Zara,
H&M, Colin’s, Mexx and Matinique,
14 Apparel Online Bangladesh | MARCH 2018 | www.apparelresources.com
Russia’s online
market is
also rapidly
growing due to
an urbanised
technologically-
equipped
population.
According to
Euromonitor,
in 2017, the
percentage of
population using
the internet
continued to
increase with
internet retailing
expected to
pick pace thanks
to the growing
penetration
of internet
users, higher
income levels
and stronger
purchasing
power and
cross-border
sales.
Chris Walker – Marketing Manager – Thai Son SP
Sewing Factory, Vietnam
lead the mass market segment,
retailers like Aftco, Amasioni, Artigli,
Bugatti, Climona and Future along
with many more are occupying
the middle market. Armani, Ferre,
Crea, Versace, Chanel, Christian
Dior, Jimmy Choo, Tiffany, Bvlgari
and Ermenegildo Zegna are some
of the major names that share the
upmarket niche segment. Together all
these brands are actively developing
all possible segments of the apparel
retail business simultaneously.
As per leading professional
consulting firm CBRE, a number of
global retailers are actively entering
and expanding their chains both in
Moscow and nearby areas including
names like Victoria’s Secret,
Superdry, Charlotte Olympia, etc.
Apart from these, many retailers
have made their debut in Russia in
2015 such as Tsumori Chisato, MCS,
Malo, Nelva and Henry Cotton’s.
e-commerce boost
Russia’s online market is also
rapidly growing due to an urbanised
technologically-equipped population.
According to Euromonitor, in 2017,
the percentage of population using
the internet continued to increase
with internet retailing expected