Russia - Selling and buying
Reaching the consumers
He attaches great importance to brands and the quality of a product, as well as its life span for people with a modest income. The price is often only secondary but Russians are nevertheless attracted to "bargains".
The emerging middle class includes 25 million inhabitants and generates 80% of demand in the country. They appreciate the western way of life. Russian customer is educated and sophisticated.
Whereas distribution systems were practically inexistent at the fall of the USSR, the almost total privatization and liberalization of the sector have led to a rapid market transformation. Supermarket chains began to develop in the 1990s and the present structure integrates the components of the western model. There are well organised distribution channels especially in Moscow and St Petersburg. They are developing rapidly in other regions. Geographical coverage is still a big challenge in Russian market.
As regards chains, the market is dominated by supermarkets which represent more than half of sales.
Hypermarkets have appeared recently (opening of the first Auchan in 2002), and are already reaching 10% of total turnover; they have strong potential. They target a relatively well-off clientele.
The share of discount stores is also about 20%, but the market seems to be more saturated.
Finally, local shops represent from 10% to 15% of chain sales.
Market access procedures
It has signed a partnership and cooperation agreement with the European Union which aims to create a common economic area. It generally enjoys most favored nation status (MFN) and benefits from the generalized system of preferences (GSP) in its relations with the United States.
The agri-food sector is particularly protected with quotas on certain products and very strict phytosanitary standards.
Exporters often say the heavy and unpredictable Russian Customs procedures are a big obstacle.
The procedures and conditions to import merchandises in Russia have changed 2010 with the entry in force of the Customs Union (CU) between Russia, Belarus and Kazakhstan.
All importation must to present a freight declaration. This declaration shall be accompanied by the following documents:
-Commercial invoices and packing list
-Import licences (if applicable)
-Certificates of conformity
-Certificates of origin (if applicable)
-Sanitary certificates (if applicable)
Foreign good circuling in the Customs Union (CU) (Russia, Kazakhstan Belarus) area are customs cleared at the CU's border. After that, good are free to circulate in the CU area without additional customs controls.
In the case of temporary entry, goods could be full or partially exempt of customs duties and import VAT for a period up to two years.
For more information, please visit the Customs Union website.
Organizing goods transport
It represents 7% of global traffic.
There are no motorways and the infrastructure is inadequate for goods transport (19% of all goods traffic). Nevertheless, projects are underway to open up the country towards the West.
Russia has 41 large ports of which only 11 are equipped with infrastructures for import-export; the biggest one is St Petersburg (42 million tons). The country is open to the sea on 3 sides: the Baltic sea, the Black sea and the Pacific Ocean. The government has an ambitious modernization project and wants to increase the capacities of port terminals.
Domestic air freight is not widespread.