Few Australian exporters immediately think of Russia as a prospective market for their products or services. Once aware of the rapid transformation now taking place in the Russian economy, however, many do see opportunities for new business — particularly at the luxury end of the market.

Austrade in Moscow and Vladivostok can help you assess opportunities for your product or service in Russia and provide advice on how to do business in this rapidly emerging, prosperous market.

Market overview

As the world’s largest energy exporter, Russia has experienced a massive injection of new wealth — and Russians, who for generations had little access to western products, have become amongst the world’s most avid consumers of imported goods. They are looking for new, good quality products — and Australia is for many a highly desirable source.

One of the most significant features of the Russian economy is the extent to which strong domestic demand is driving the economy. According to the latest statistics from the Economist Intelligence Unit, imports into Russia will rise by 19% this year and by at least 18% in 2008. This rapid expansion is supported by very strong economic growth and disposable income that is projected to grow by 13% p.a. over the next five years. 

Sales in Russia’s retail sector are generally rising by 30% p.a., while food sales are soaring at a rate of 45% p.a. There are very few other markets in the world that offer the same prospects. Improving access to consumer credit is also helping to fuel demand, and domestic credit rose by over 46% during calendar 2006.

Opportunities exist across the full range of consumer products, most especially in the food, beverage and wine sectors.

Food and Beverage sector

See detailed profile of Australia's capabilities in the Food and Beverage.

Wine sector

See detailed profile of Australia's capabilities in the Wine.

There are many other consumer product sectors of interest. Here is one such example in another sector of the consumer market.  Please contact us also for advice of opportunities in your market sector.

Cosmetics and personal care products

This market continues to enjoy very dynamic development.  It has been experiencing double digit growth for at least the last five years. Analysts believe this will continue to do so for some years to come.

Rapidly rising disposable incomes and a growing trend towards natural cosmetics and skin-care products will continue to stimulate this growth. There is also an accelerating shift from mass-market cosmetics to higher-quality products and premium brands. Russian consumers love luxury and the premium sector of the market has great potential — and viewed as being far from maturity. The emerging middle class is also a growing market and consumers in this market sector are prepared to spend a significant percentage of their incomes on imported lines, particularly perfumes and colour cosmetics, which have particular aspirational appeal.

Austrade in Moscow is always seeking Australian suppliers of natural cosmetics, perfume and make-up products. These are sectors that are currently enjoying the highest demand in the cosmetics area. Other products of potential appeal include depilatories and men’s grooming products, hair care and sun care products.

Overall Australian products, whilst not yet widely known, are nevertheless perceived as healthy, natural and safe — and of good quality. Increasing tourism between Russia and Australia is also raising awareness of Australian consumer products — and opportunities are beginning to open in number of sectors. However, it must be noted that the Russian market is extremely brand conscious. Costs are high and potential suppliers should be prepared to invest in certification requirements and marketing support for their distributor.

In terms of distribution, the Russian retail network is also undergoing rapid development, and specialist chains are expanding into all regions of Russia. The largest concentrations of higher-income consumers, however, are in Moscow and St Petersburg — and marketing efforts generally focus first on these centres.

Nevertheless if you are targeting China, Japan or Korea, we also recommend that you contact Austrade in Vladivostok, for an assessment of marketability in the Russian Far East. Operating in the same time zone as the east coast of Australia and with good regional transhipment links, the Russian Far East is also of increasing appeal.

Austrade’s in-market specialists have extensive networks of contacts in the consumer products sector, and can help you to develop a market entry strategy that is right for you.