Purchasing power

Ideology no longer determines social status. But the post-communist society is characterized by a wide disparity in wealth.

A village, Middle Russia.

The purchasing power of consumers is concentrated into the hands of the minority of the population. 2-3 % of the population, often men and women between 18 and 35, benefit from a high purchasing power. Up to 20 % of all Russian households can be considered as “middle-class”, with a relatively high purchasing power. They are business people and white-collar employees, often living in big cities. They are mostly represented in Moscow and St. Petersburg. Wages in these cities are much higher and there are also more available working places. The Russians call Moscow “ a state in the state”.

Consumption behaviors in Russia

After years of shortage, the Russian consumer is eager to shop. The average Russian consumer spends 90-95 % of his earnings and does not do savings. Spendings on consumer goods, leisure activities can often go to extremes. The average Russian consumer is mainly looking for foreign goods.

The "New Russians" prefer spending their free-time on sport activities and eating out at restaurants. For most people, not only quality but also price is important. The rest of the population is very price-sensitive.

People with a limited purchasing power are mainly mature-age people with a slight dominance of women. These customers express interest into reliability and quality of goods, especially in the healthcare sector.

The attitude towards Russian brands are that they offer good value for the money. Local products are considered healthier partly because they contains less chimical additives. The Russian consumer is systematically confronted to forgery. He is appearance oriented and demanding.

Marketing products in Russia

Companies seeking to do business in Russia should not create one nation-wide plan, but several business plans should be developed in order to reflect the unique aspects and demands of different regions or cities.

Local brand loyalty is increasing, as well as the quality of domestic products. The packaging of products has improved and many Russian leading brands are close in competition to international brands. In order for a foreign company to compete, local or national brands can be created and positionned. The three most important factors influencing consumer selection of products are aggressive advertising, promotion and a minor decrease in prices.

A company entering the Russian market must be aware of the popular person-to-person marketing. This is mainly due to the fact that distribution and logistic costs are high and this way of marketing is therefore less costly. Russian consumers appreciate however big mall centres to do their shopping.

Customer preferences regarding advertising have step-by-step changed. Commercial should be humorous, interesting, bright, and beautiful and combine image and product qualities.

Other useful sections of the website

 

Business and trade in Russia

Economic sectors

 

To go further

gfk.ru - GFK Russia