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Retail Industry: The Last Buzz word in Russia

Mar 21, 2006

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Russia finds organized retailing as a major growth area only next to, the communication and construction sectors. Although modern retail formats are gaining momentum but they still have a long way to go to achieve comparable levels with markets of other developed countries. Major retailers in Russia are using advanced retail tools as seen in mature retail markets. It is therefore felt that the country possesses enormous opportunities for existing and new players.
 
Already in retail food sales market Russia is the fastest growing in the world, with a potential to double in size by 2008. It ranks as second most attractive retail market in Global Retail Development Index 2005 making it a source of immense retail opportunity.
 
Compared with countries of Central Europe and the Far East namely China, Russia has shown significantly higher growth of modern trade outlets in the past two years due to a boom in its retail market. During these two years the number of modern trade outlets in Russia grew by 76.5% while in Central Europe it remained below 20%, almost zero in Czech Republic and 17% in Croatia.
 
Within this scenario, RNCOS, a bespoke market research organization has recently published a market research report namely “Organized Retail Sector in Russia (2005-2008)” after conducting a thorough investigation of the Russian retail sector. The analysts came to a view that the discounter segment had a high growth potential owing to the fairly modest average income in the country particularly, region wise. It was found that few people owned a car while the rest went for frequent shopping ‘round the corner’. Unlike many European countries Russia had no regulations limiting retail-operating hours – only the employees’ working hours were limited.
 
The analysts further find that the retailers are free to set operating hours at their own discretion. However, the employees working over and above the standard working hours are entitled to additional compensation under the Russian labor legislation. The major retailers in the large cities have 24x7 working hours. There are also local hypermarket retailers which operate their stores on a similar basis.
 
The real estate property purchased and owned by foreigners or Russian companies having a foreign investor have no barriers, so much so that no stamp duty is levied on their purchase in the Russian federation. With the Internet users in Russia reaching a count of 26 million by 2010 the most Internet friendly cities are Moscow, St. Petersburg, Novosibirsk, Vladivostok, Yekaterinburg, Nizhhy, Irkutsk and Rostov-on-Don. The high degree of Internet usage is found in regions with greater urbanization where there is a mass of potential users.
 
The market research report, “Organized Retail Sector in Russia (2005-2008)” includes an extensively conducted comparative study of various business houses dealing with retail stores.
 
For more information visit: http://www.rncos.com/Report/CP14.htm


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