Apparel Online India Magazine May 1st Issue 2018 | Page 21

EMERGING MARKET
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. As per the report, cross-border
internet retailing continued to drive
internet retailing in Russia in 2017.
This retail boom has opened the
floodgates for apparel exporters
from around the globe. In the
backdrop of rising fabric prices and
the fact that local manufacturers
cannot produce enough to cater to
the burgeoning demands, Russia
has been traditionally dependent on
overseas players to feed its domestic
requirement. China, in particular,
has played a significant role in
fulfilling its mass market (segment)
demand.
Market dynamics
The Russian apparel market stood
at US $ 43.2 billion (in 2016) and is
expected to touch an astounding
US $ 105 billion by 2025 (at 8 per
ESSENTIALS
“We worked in
Russia for 4 years
but stopped
working about
two-and-a-half
years ago as ruble
devaluated and
price was very
hard to match.
Otherwise, there
was no major
issue while
directly working
with Russian
importers. We
worked on LC,
and payments
were safe. Now
as we have done
some changes
in our product
line and reduced
price also,
Russia is a good
market and we
are hopeful to
get orders from
there.”
– Ashish Shah, Partner,
Oggo Exports,
Mumbai
India's Apparel Exports to Russia
90
- 70%
- 60%
70
- 50%
60
50 - 40%
40 - 30%
30
- 20%
20
- 10%
10
0
Jan - Dec ’16
Knitted Garments Woven Garments Total Exports
37.34 26.44 65.78
Jan - Dec ’17 38.85 45.65 84.5
% Change 4.03% 60.25% 28.45%
-
0%
80
cent CAGR growth according to
Statista) with almost 80-85 per cent
of the apparel market occupied by
foreign producers. 65 per cent of
Russian clothing market consists
of low-cost imports from Asian
countries, 15-20 per cent of the
market is for Russian products and
15 per cent branded clothing are
by Russian and foreign companies.
In woven, women’s dresses and
suits are in huge demand while
jerseys, pullovers and cardigans
are the much sought-after items
in the knit category. At present,
ladieswear accounts for around
63 per cent of the market, while
childrenswear takes up 21 per
cent, leaving menswear with just
16 per cent – an indication of its
apparent shrinkage, lately. The
athleisure trend remained a key
driver of growth in apparel in 2017.
Russian consumers increased their
preference for combinations, which
offer comfort, athletic fabrics and
materials with a casual look.
World Cup adds to the
euphoria
The 21st FIFA World Cup scheduled
to take place in Russia from 14 June
to 15 July 2018, being played out
across 11 cities, has now added a
new dimension to the retail market.
Considering the overwhelming inflow
of foreign and mainland tourists to
enjoy the quadrennial extravaganza,
the Russian Government has decided
to introduce tax-free shopping
for overseas visitors for the first
time. This scheme is anticipated to
have significant uptake among the
country’s ever-growing number of
overseas visitors besides giving a
huge boost to the overall economy
and the much needed thrust that
the retail sector has been waiting
for. With demand all set to soar
and supply opportunities already
in the horizon, not only retailers
but also apparel exporters from
all prominent manufacturing
destinations are gearing up to lap up
this big-big opportunity.
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