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Expert Speaks
Kontakt ( InterSearch Group Russia ) is a consulting company providing services of Executive Search and Management Selection . The company was founded in 1990 and is among the first agencies working in the area of HR consulting in Russia . In apparel sector , the company works with more than 250 clients , who source from China , Bangladesh , Uzbekistan and some local manufacturers . Speaking to Apparel Online , Mariya Kelina , Senior Consultant – Retail & FMCG , Kontakt ( InterSearch Group Russia ) shares her perspective on the Russian retail sector … Here are the excerpts !
Nipun Nawaz , CEO , Nahid Trade International
AO : Growth potential and market trends ...
Mariya : Russian market has good potential for growth . After the crisis in 2015 ( due to the growth of exchange rates ), the market has started to grow again and according to various sources , the growth rate is somewhere between 2-7 % at present .
Some general trends of the Russian retail market are as follows :
• Off-price segment is growing .
• In terms of production , there is emphasis to reduce the manufacturing cost by using local factories while also sourcing from new destinations ( instead of traditional ones ) that are more costeffective .
• There is emergence of start-ups and private labels .
• In fashion section , there is a lot of scope in categories such as inner and outerwear .
• Many fashion brands are planning to open representative offices in Russia .
AO : Products for the future …
Mariya : Innerwear , outerwear , shoes and kids ’ fashion items in middle and middle plus segment with good price / quality correlation are very promising . People here are even ready to pay more , provided what they buy lasts long .
AO : Factors to consider while working with Russian stores / importers / brands ...
Mariya : The most important criteria are pricing and business terms as most brands have a tendency to shift to fast-fashion retail scheme . Also , it is important to stress on quality / price factor as Russian buyers are very particular about value for money .
AO : Major cities for apparel market .
Mariya : Moscow and Saint Petersburg are very interesting as these two have a substantial number of students besides the general people . These two cities also have higher disposable income and purchasing power . Apart from these , Rostov-on-Don , Yekaterinburg , Omsk , Tomsk , Krasnoyarsk and Vladivostok also have vibrant markets .
AO : Relevance of smaller markets ..
Mariya : Smaller markets are very relevant as we do not have big malls in all cities and trade centres . For example , in a city with a population of less than 5,00,000 , there are not so many fashion brands and not even street retail , so people count on the small markets .
M . Neaz A Bhuiyan , Director , Chittagong Fashion Group
Director of Chittagong Fashion Group , M . Neaz A Bhuiyan to AO .
Nipun Nawaz , CEO of Nahid Trade International , a buying house that caters to many global clients , is still a little sceptical on Russia . “ There are no two ways ; the Russian market is really huge but the buyers there are also difficult to handle and sometimes even create problems pertaining to payment . Vendors thus need to be careful while executing orders for Russian clients ,” cautions Nipun , whose fears don ’ t seem to be unfounded considering the strong influence that the dreaded mafia have had in all businesses till the accession of Russia to the WTO in August 2012 .
Things are now changing for the good after the Russian authorities have initiated various steps to ensure business ease and transparency .
16 Apparel Online Bangladesh | MARCH 2018 | www . apparelresources . com