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!
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 per cent 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
• 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 public. 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 many fashion brands and not even street retail, so people count on the small markets.