On Tuesday 6th March 2018, the BCFA held a breakfast seminar at the stunning Milliken Showroom in Clerkenwell. The seminar focused on the topic of Exporting to Russia with guest speaker Natasha Kimberley, Director of Kimberley Expertise. Some of the topics covered included the Russian market in general and the best ways for businesses to approach the Russian market as well as some top tips.
Facts and Figures
Russia has a population of around 190 million, with the capital city Moscow having 20 million. 85% of business takes places in Moscow, or via Moscow, 12% takes place in St Petersburg and the rest around the country. The core of the commercial Russian market is residential rather than contract, however, the quality of the residential will deliver at a higher level in the market than the contract projects, there are plenty of palaces and villas. Since the financial crisis 3 years ago, Russia has made good recovery, and since November 2017, the market has been increasing. With English being an extremely popular language, Russia is a modern country for UK businesses to pursue business. This is an efficient and modern economy.
Relationships and Payment
Clients like to operate on a on a very personal level, a stable relationship with clients is essential for a successful business to continue to develop; it is all about being “human” and understanding customers. Russian customer service is excellent with high expectations from their suppliers. Customers are ambitious, they don’t just do business to make money, they do it to help build a business. Therefore, it is key to work at those client relationships as they will last for many years.
Unlike most countries, the Russians are also very efficient when it comes to payment and expect to pre-pay 100%. They also don’t like to wait around, they want things yesterday! At the very least they expect things to do be done immediately, so the faster you can respond the more successful you will be.
In Russia, brand is important; people must know the name and who you are associated with. It is recommended that you go out to visit the country and meet clients to build the brand recognition and make it personal. It’s also important to remember that in some places, if you work with one distributor you are unable to work with another, so make sure you do research before you go to avoid dispute.
Natasha recommended 3 ways to attack the Russian market; first ensure you have a distributor, move on to an agent in Russia and then set up a showroom. Showrooms are vital as it enables you to continue growing. This market is enormous. You want to provide a space for designers to come and have a look around and see your products in person. A business needs to be sufficiently independent to build a brand identity and in a competitive market it is vital that you stand out. Your showroom should feature just your own items, and not your competitors, sharing with complimentary products can also work - a one stop approach can be highly successful. The best location for a showroom is the Moscow Ring Road (parking nearby is imperative) and where there are other complimentary businesses, similar to the UK’s version of Chelsea Harbour.
A key tip that Natalie recommended and has proven to be effective, was that businesses should always supply paper catalogues and brochures, this market does not respond to web sites. This should be a key focus for your investment to support the physical presence of your products by having something clients can take away and refer to.
Another key piece of advice is to support and work closely with your agent. Make the effort to go to Russia and join them for appointments with customers. This will give you the chance to experience the market, as well as visit customers on a personal level which creates brand loyalty. It is recommended to go out and visit 1-2 times a year spending at least 4-5 days.
How to get there and where to go
In terms of getting your VISA, it is recommended that you get a visitor VISA, unless you are beginning to visit quite regularly then it is suggested that you apply for the business visa. If you are on a visitor Visa though you must not carry samples or you will be stopped. These should be sent separately in advance of your trip.
The UK government has no funding for UK companies looking to export to Russia at present. They can be helpful in terms of getting a company into the country, the Moscow Department of International Trade office can also help with contacts but there is no official support. However, depending what region your office is situated in, you might find there are other forms of funding available via a different source.
Holidays in Russia
Holidays in Russia are taken very seriously, so it is key to note that you shouldn’t expect anything to happen during these times. It is recommended that during January you should avoid doing business for the first two weeks as Russians work until 31st December as their Christmas is celebrated on the 7th January so many holidays are taken during this month. Other key holidays to note are:
- International Women’s Day, which is a public holiday on the 8th March - this is actually huge in Russia every woman will receive flowers and it is recommended that you send special messages and treats to your female clients and partners.
- Men’s day (not a public holiday) on the 23rd February
Like the UK, July/August is a very slow time of business in Russia, on the 31st May all schools and universities break up for a 3-month holiday opening 1st September. Therefore, businesses tend to slow down the last two months of the holiday. The best time to do business would be from September, as everyone is back at work.
Despite their lack of interest in websites, Russians are very active on social media; Facebook, Instagram and Twitter. You will find businesses there “retweet” or “re-share” a lot of visual content on their social media platforms. If you want volume, feature loads of images for people to remember your brand name. The best way to advertise your products is through social media, where you can get better value for your money. There are not many magazines in Russia where advertising is effective or recommended. Printed leaflets, catalogues and books as stated are also an effective way to advertise your product, as these can be picked up from showrooms.
The overall feel of the market seems open and efficient with a definite interest in British manufactured and designed product. It is essential that you scope the market before entering as there is a lot of competition. Your visit can help you identify where you can potentially locate your showroom, attend some of the shows in Russia and meet potential customers.
The current news and media stories may make this market seem like a scary prospect, but the everyday Russians are just like you and I and probably speak better English!
For more information on the Russian Market, contact Natasha on email@example.com
For information and contacts at the Moscow DIT office contact Sue on firstname.lastname@example.org