The importance of Brand & Corporate Purpose has grown over the last decade. Companies have understood the importance of Purpose as a growth driver...
With the addition of two new Partners in Russia, Sevendots extends its network of experienced consultants to a market with high potential growth and interesting opportunities.
Elsbeth Schipper worked for many years in different international market research organizations, where she consulted large global clients on different branding issues.
Sonia Michon-Floc’hlay is a Cosmetic and Luxury industry professional, who covered International Management and Marketing & Sales positions within different multi-national companies. Both settled in Moscow in the course of the last year. Thanks to their strong complementary skills and great drive, they are developing a solid understanding of the Russian market.
One of the areas that they will focus on, is the Luxury segment. This segment has been incredibly buoyant in Russia, developing at a fast pace with the liberalization of the economy. As a consequence of the lack of Russian Luxury Brands, Western Brands have filled the gap and became the most common way of displaying one’s social status within a very short amount of time. Given the remembrance of soviet times, where everyone had to buy the same items, Russian people have had the need to differentiate themselves through material items that have strong heritage and values, as well as a clear Luxury positioning.
Nevertheless, Russians are proud of their local Brands, that they perceive to be part of their cultural heritage. Successful strategies of Western brands in FMCG have been to introduce Russian variants to gain local relevancy. This is now starting to become a practice in the Luxury world too.
Private yachts, property, cars and jewelry are the main Luxury symbols for Russians today, followed closely by exclusive holidays and clothes. Russians have also developed a high level of expectations: services and shops available around the clock, timeless quality, personalization and exclusivity, being part of an exclusive VIP club or event or enjoying VIP services have become important elements of success. Russians are now moving from using Luxury for status to a way of life and an indulging experience. Authenticity and credibility are key. This includes as well cultural events, which are deeply rooted in the Russian mindset and heritage.
The Russian Luxury market has been growing high double-digit numbers in average in the last 10 years. Despite a recent slowdown, it is still one of the world’s fastest growing markets, with an average of +13% in the last 6 years and a total of 5,3 bln USD (McKinsey research 2011). Russians will continue to move towards seeking more experience, exceptional treatment and more emotional bonding; providing further opportunities for Luxury Brands to grow, despite many challenges like high rents or the lack of experienced personnel.
With 85% of the Luxury business coming from Moscow and St Petersburg (McKinsey Research 2011), there is also room for expansion to the next tiers cities in the future. A good business in perspective!