Apparel Online India Magazine May 1st Issue 2018 | Page 18

EMERGING MARKET
Evolving and Growing Russia…
Big opportunity for exporters
World’s largest nation geographically (spanning 11 time zones, being the 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.
C
onsidered 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.
Euro Monitor International in its
recent report claims that despite
a 3-year uninterrupted decline in
consumers’ real disposable income
in Russia, their economic optimism
and confidence marginally increased
in 2017. This became possible due to
the stabilisation of national currency
exchange rates and inflation
slowdown.
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.) store in Moscow’s
Metropolis Mall, so did Superdry
and luxury brand Aquazzura as
well as US denim brand Wrangler
(which opened a 979 sq. ft. 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 For deep penetration in
Russia, ʻRussian Retail
Weekʼ can be a good
opportunity. It is going
to be held from 6th
to 10th June, 2018 at
Moscow.
“Majorly my father worked
through a trusted buying
house as Russia has a language
barrier and not many people
are trusted in this field. We
supplied mostly maxi dresses
as they were always in big
demand in Russia. We were
provided with techpacks to
prepare the sampling for the
order. Earlier Russia was not
much focused on compliance,
but after the implementation
of US and European global
norms policy on compliance
and safety, Russians too have
started following it.” “From last five years, we
are working directly with
Russian wholesalers and have
not faced any major issue,
be it language, payment
or anything else. The only
difficulty is that we need to
be extra careful about custom
formalities, and for that
we took help of concerned
agencies. Tops and camisoles
are products we are exporting
there and mainly cotton twill
and viscose fabric for the
same. From last two years,
orders are comparatively
less from Russia.”
– Yogeeta Prabhakar, MD,
Prabhakar Overseas Group, Noida
18 Apparel Online India | MAY 1-15, 2018 | www.apparelresources.com
– Rahul Pareek, Proprietor,
Spring Exports, Jaipur
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
“I have no experience with
the Russian market. All
the business that we do in
Russia is through European
importers. My experience has
been that it is a very price-
sensitive market and ECGC
cover or bank guarantee is
essential. Russia is very trendy
and brand-conscious market,
but not high on quality levels.”
– Mandira Malik, Something Else,
Delhi-based buying agent