What do we know about Russian consumers?
Russia has a consumer base of around 143 million people. It is the second most prosperous BRIC nation (Brazil, Russia, India and China), after China. 74% of the population is urbanized.
In general the Russians are poor. The Russian middle class is limited yet but is an untapped opportunity especially for consumer product corporations. Russian consumers are price sensitive. They are open to foreign companies if their products are comparable with local price points.
Despite a strong middle-class, there is marked income inequality in Russia. Russia houses 111 billionaires, who own about 19% or 1/5th of Russia’s household income. The latest Gini Index in 2012 was 42, with 0 representing perfect equality and 100 for complete inequality.
What do people import in Russia?
- Pharmaceutical products
- Semi finished metal products
- Meat, fruits and nuts
Who are Russia’s top export partners?
What is Russia’s top cargo port?
Port of Saint Petersburg is Russia’s busiest container port.
Which are Russia’s busiest cargo airports?
- Domodedovo International Airport
- Sheremetyevo International Airport
- Pulkovo Airport
- Vladivostok International Airport
What are the customs and tariff regulations in Russia?
- Russia’s import duties and taxes vary depending on the type of the importer, such as an individual or a commercial establishment.
- Duties and tariffs of the Eurasian Economic Union (EAEU) Common Customs Tariff are applicable with rates varying between 0% and 100%, averaging at 7.8%.
- Imports to Russia are also subject to VAT
- Additionally, excise duties are applicable on alcoholic beverages and tobacco products.
- Restrictions and bans apply on the import of the following personal-use goods:
- Service and civilian weapons
- Hazardous waste
- Undercover surveillance and intelligence gathering equipment
- Narcotic drugs and psychotropic substances
- Human organs, tissues, blood and components
- Ozone depleting substances
What is the distribution structure in Russia?
With the push towards market economy, well organized distribution channels similar to those in Western countries exist in Russia. Hypermarkets and supermarket chains exist in large cities like Moscow and St. Petersburg.
Specialized retail stores for hardware, furniture and home appliances are common in urban areas. Discount shops, local stores abound in residential areas selling groceries, food and other household items. Stalls and open air markets in designated areas of cities and towns, selling food items, gadgets, CDs etc. are commonplace.
Direct and distance selling formats are adopted by several cosmetics, health and wellness products companies
Bringing a local partner will help you in understanding Russia’s distribution strategy in doing exports and business system significantly.