Professional Documents
Culture Documents
Consumer 2013-2015
Mikhail Pershin
Head of Russian Retail Practice, Accenture
To be covered
2. Consumer:
expectations &
preferences
1. Factors influencing
retail in Russia
Retail in
Russia
3. Retail in Russia:
channels dynamic
4. Retail in Russia:
segments dynamic
Legislation
Competition
Consumer
preferences
Macroeconomic stability
The Russian economy has been stagnating
Level of populations purchasing power is stabilizing
due to lower unemployment rates
Retail market has experienced a rapid growth
phase, and is now entering a phase of stagnation
Russian market is No.1-2 in Europe for most
producers
Unemployment, %
-2%
6.3%
Q1 2012
5.8%
5.4%
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
14,988
13,802
11,925
8,878
5.1%
13,249
10,816
5.1%
17,434
+5%
10,619
5.3%
14% 13%
9,996
9%
8,335
5%
9%
7% 6% 6% 7%
6%
6%
5%
4%
4%
3%
3%
2009
I Q IV Q I Q IV Q I Q IV Q I Q IV Q I Q IV Q I Q
2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013
GDP
Source: Federal Statistics agency, Ministry of Finance, Accenture Analysis
2008
2010
5%
2011
GDP
2013F
2012
Retail turnover
Inflation
-8%
Copyright 2013 Accenture All rights reserved.
21.4
22.6
23.8
19.1
16.5
+26%
13.9
47%
45%
47%
48%
45%
55%
2006
2007
Food
53%
2008
52%
51%
2009
2010
52%
2011
53%
54%
55%
2011
2012
2013
2014
5%
6.1%
5.2%
5.2%
16%
12%
56%
Non-food
MED forecast
Fact
49%
45%
55%
44%
48%
10.9
8.7
14.6
46%
25.2
Russia
509.5
France
418.2
Germany
410.1
UK
377.6
Italy
253.1
Finland
Norway
sq. m. per
1,000 people
1,260
sq. m. per
1,000 people
1250
/sq. m.
6,246
population
9.5 M
income
$/year
25 739
Russia
sq. m. per
1,000 people
660
/sq. m.
4,771
/sq. m.
,7832
population
4.9 M
population
142.8 M
income
$/year
31,459
income $/year
9,899
Luxembourg
sq. m. per
1,000 people
1,430
/sq. m.
7,406
population
0.5 M
income
$/year
40,000
Sweden
sq. m. per
,1000 people
1,210
/sq. m.
6,411
population
9.5 M
income
$/year
26,242
Switzerland
sq. m. per
1,000 people
9%
10%
9%
5,000
1,510
/sq. m.
6,936
4,000
population
7.9 M
3,000
income
$/year
30,060
2,000
8%
7%
6%
6%
4,504
4,807
5,207
5,319
4%
2%
1,000
2009
2010
Sales productivity
Productivity count based on the retail turnover by total amount of retail space
In current prices, 1 euro = 42 RUR
2011
2012
Inflation
30,245 RUR
43.5 K RUR
493 RUR
67%
Source: Romir, FOM, Federal Statistics Agency, National Bureau of Credit Histories, GFK
0-19
Up to 45,000
27,000 - 45,000
19,000 - 27,000
-1.2%
14,000 - 19,000
53,252
53,279
53,414
54,020
54,874
40-69
70 and more
14,210
14,219
14,380
14,181
13,733
8.4%
10.5%
10.5%
17.0%
17.3%
16.6%
17.0%
15.5%
15.7%
15.4%
15.5%
12.1%
11.9%
+0.4%
45,303
45,361
45,423
45,202
44,769
20-39
+3.0%
10,000 - 14,000
7,000 - 10,000
-3.4%
2010
2012
2011
2013
2014
15.1%
15.9%
Income
gains
compared
with 2011
amounted
to 10%
15.6%
16.2%
13.4%
5,000 - 7,000
8.1%
7.0%
6.7%
Below 5,000
7.3%
5.9%
5.4%
2011
2012
1 H 2013
10
30,245
26,629
17,290
18,638
2008
2009
20,952
23,369
2010
2011
2012
1 half
2013
9,632
+27%
11,721
10,754
10,478
1,922
1,619
1,588
1,736
1,534
1,252
3,931
3,861
3,923
3,842
3,866
1,046
1,098
1,204
1,337
1,495
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Saving accounts
Securitites
Cash
181
249
270
Q1 2012
Q2 2012
Q3 2012
332
Q4 2012
Consumer loans
316
227
Q1 2013
Q2 2013
Mortgage loans
11
32.1%
100
32.0%
100
35.0%
100
33.6%
10.8%
10.1%
6.2%
6.5%
5.9%
6.2%
6.0%
6.4%
18.5%
18.3%
17.3%
14.9%
15.9%
15.0%
17.5%
11.3%
11.4%
11.3%
11.1%
2010
2011
1
2012
1
2013
9.1%
8.3%
6.0%
6.4%
17.1%
Transport
Household equipment
Utilities
12
-6.61%
80
70
72.13%
70.15%
66.03%
72.46% 69.90%
73.67%
65.55%
80
60
70.39%
71.59%
64.00%
66.86%
60
50
50
I analyze the
price first
40
30
20
20
10
10
0
Q2 2008 Q4 2008
2009
Q4 2010
I wont waste my
time looking for the
lowest price
40
30
2007
69.59% 66.67%
70
Q3 2011 Q2 2012
Q2 2008
Q4 2008
2009
Q4 2010
Q3 2011
Q2 2012
73.7% of consumers consider price as the most important thing in making decision to buy a good,
with strong upward trend (growth rate of those who agreed is 12.4%)
66% of consumers are ready to spend additional time on searching for the best price and comparing
price in different places in order to make the best deal. This trend is declining, which can be
explained by the expansion of discounters and convenience stores.
13
41%
68%
28%
32%
28%
4%
54%
50%
37%
38%
Agree
8%
* Response to the statement : I am willing to accept
lower levels of customer service, if it ensures I get
the lowest price
13%
* Response to the statement : I am willing to accept
lower levels of product ,if it ensures I get the lowest
price
14
Online
In-Store
Mobile Device
51%
81%
Product
Assortment
49%
45%
Promotions
63%
Expect it to be the
same across channels
83%
Expect it to be the
same or more than In-Store
Price
53% of consumers would like to earn and use their loyalty rewards In-store, Online or on a Mobile Device
45% of consumers would like to have an account that is completely connected between purchases and
loyalty points both Online and In-Store
43% of consumers would like to have one account to use In-Store, Online, and on Mobile Devices, to
make check outs easy and fast
Source: Accenture Seamless Retail Research 2013
15
98%
89%
-3%
100
80
83% 79%
72%
73%
73%
62%
70%
65%
82%
79%
69%
60
27%
40
21%
18%
11%
20
2%
1%
Russia
Ukraine
0
2005
2007
Q2 2008 Q4 2008
2009
Austria
Czech
Republic
Poland
Bulgaria
Private labels
National brands
Russian consumers have to constantly weigh their choice of brand versus private label. As we
see from the graph above, consumer preference for well-known brands is highly related to the
economic conditions (lower during an economic downturn). Currently, the consumer would rather
choose a well-known brand, and his/her intentions have become stronger during the last period
60% of respondents have already decided on the brand to buy before they come to the store
Despite strong adherence to well-known brands, Russians are ready to buy retailers private
labels as we can see from the growth of private labels turnover of 29.6% in 2012, compared to
2011.
Source: GFK, AC Nielsen Households Research Panel
16
Word-of-mouth information
from people I know
Online information from sources like
expert review sites
Corporate web site
(company, brand or product website)
In store information from sales people
or displays
86
73
72
70
64
60
TV or radio ad
56
Word-of-mouth from
family and friends
Off line catalogues, leaflets
23
21
42
54
55
44
Search engines
34
34
29
17
78%
The consumer constantly monitors the company and its promises, and cares more about relations to his\her needs*
Promised one thing but delivered another
83%
76%
74%
63%
58%
47%
47%
29%
18
Hypermarkets
131
14
Supermarkets
39
Searching for
necessities?
Analyzing
price?
155
18
39
Searching for
discounts?
Just browsing?
35
Discounters
28
Open markets
15
BTC
34
1H 2012
17
Do not
want to buy much?
Like the
atmosphere?
46
1H 2013
66% of consumers are ready to spend time on searching for better price and price comparison, in order
to get the best deal from their favorite brand
The importance of store atmosphere, compared to discounts, has declined in 2012 by 1.3%
Average value per purchase in 1H of 2013, compared to 1H of 2012, has declined by 1.3%
57% of consumers feel frustration, if they cannot find everything they want in their standard search
channels
Source: Romir, AC Nielsen Consumer Habits, GFK changes in consumer behavior, Accenture Consumer Pulse
19
Cheaper?
Healthier?
Closer?
Only 1/3 of consumers buying on markets, choose them because of the cheaper price, the remaining 2/3
of consumers value mostly the non-price factors (location, broad product range and freshness of food
products)
60% of consumers in Russia declare they prefer to buy "green" or bio goods, even if their price is higher
The consumer cares about where food is produced. Almost 80% of consumers prefer "local" meat and
diary produce
71% of consumers like to buy produce of subsistence agriculture
Source: Romir, AMI VETRA-Marketing, AC Nielsen Consumer Behavior, MarketingBuro, GfK
20
Habit?
Good
price?
100%
40%
28%
48%
17%
15%
14%
Convenience?
7%
Broad
choice?
11%
53%
58%
68%
41%
Restaurant, caf
Retail
21
Retail in Russia:
channels dynamic
Discounters
7,548
Speciality Stores
Discounters
+16.5%
Convenient
+15.3%
Non-store retail*
+14.2%
Hypermarkets
Supermarkets
+14%*
2,263
Non-store Retail
Convenience Store
+17%
2,081
1,482
3,371
906
2,098
897
474
606
735
441
536
383
50
1,128
117
27
2009
Source: * Forecast by Kantar Retail
90
310
172
2012
36
86
199
2018
* The compound annual growth rate of 20% of the market of all the major players in the
retail market
*E-commerce, sales by catalog, etc.
23
22.90%
Modern trade
BTC
13.80%
Traditional trade
15.67%
Supermarket
16.30%
7.69%
9.30%
Discounter
2.97%
0.87%
Hypermarket
4
Drogery
5.20%
Open markets
6.10%
16.70%
DIY
3.00%
1.20%
-1.37%
-4.63%
Average
frequency
Electronics
0
0
500
1,000
1,500
2,000
-1.17%
Average value
per purchase
# SKU
Channel share
Average value
per purchase,
RUR
Hypermarkets have become the most fast-growing channel in 1H 2013, due to rising penetration rate and
average usage frequency
Modern retail is losing its share in the 1H of 2013, which is connected to rising popularity of open food
markets average usage frequency, and the greater variety of food offered there
In 1H of 2013, average usage frequency of hypermarkets has increased with slightly decreasing average
value per purchase
Source: Romir
24
+18%
1,559
1,723
1,383
1,216
965
0.135
0.10
0.119
0.05
750
2008
2012
2013
2014
2015
2016
6,863
6,239
5,615
4,991
4,367
3,743
2011
2012
2013
2014
2015
2016
France
Poland
0.062
0.017
Russia
0.029
0.00
2011
Germany
2011
2012
2016
25
76.5 mln.*
405
125
95
+24%
280
225
2011
2012
Services (tickets and digital products)
Material goods
22 mln.
Consumers in
Russian e-commerce
+5 mln.
26
2%
5%
11%
3%
4% 3%
27%
less than 1 year
10%
44%
5%
1 year to 2 years
2 years to 3 years
3 years to 4 years
27%
7%
Children products
Cosmetics and Fragrances
10%
Do not remember
Food
13%
Other products
40%
57%
32%
Once in month
28%
Once in week
Daily
Source: FOM, PWC, Data Insight
Auto Parts
Home and furniture
4 years to 5 years
20%
26%
3%
World
2%
13%
Russia
Answer to question: how long ago you started buying products and services through the internet?
27
Russia
USA
18%
48%
52%
82%
Plans to double their performance in Russia
Market volume
~$13 billion
Market volume
~$184 billion
433
290 297
600
115
Ulmart
2011
493
286
187
231
168
68
150
127 134
34
147
71
188 211
94
28
10
22
6
6
5
5
5
7
electronic money
bank transfer in the bank
payment terminal
internet banking
bank card upon receiving
SMS
virtual bank card online
59
3
5
3
3
2
1
2
3
Oct 2012
March-April 2013
courier services
43
33
post
38
21
20
customer pick up
postomats
7
3
Oct 2012
March-April 2013
29
Retail in Russia:
segments dynamic
Specialized retailers*
Fashion
Drogery
15.8%
13.0%
15,9%
15,1%
4,6%
12,0%
12,0%
9,5%
12,0%
18,8%
2011
15,8%
12,7%
11,8%
11,5%
15,8%
13,8%
19,9%
14,1%
9,4%
10,1%
11,1%
7,2%
13,0%
12,8%
2010
12.0%
2012
31
Billion
RUR
45
0.10
42
0.09
40
34
35
0.08
0.07
30
23
25
0.06
22
20
20
15
15
19
0.04
14
0.03
10
5
0.05
11%
12%
11%
13%
13%
14%
15%
2006
2007
2008
2009
2010
2011
2012
14%
0.02
0.01
0.00
2013
Decline in the
share by 1%
Growth rate, %
32
66
2013
42
2012
+60%
26
2011
25%
DIY-supermarkets
13%
62%
DIY-hypermarkets
32
45
66
-21%
72
33
35
21
Leroy Merlin
OBI
Castorama
Central
5
10
Severo-Zapadny
16
8
7
Privolzhsky
10
14
13
Yuzhny
8
8
Sibirsky
7
7
7
Dalnevostochny
0
0
11
Urals
Leroy Merlin
OBI
Castorama
34
76.0
53.5
13.4
32.6 11.4
1H 2010
1H 2011
#, bln
10.5
1H 2012
10.4
7.3
5.1
2.9
1.1 14.2
1H 2013
33.1
20.3
14.3
0.1
18.4
2.6
0.8
2.8
1H 2011
#, bln
1H 2012
Sales, bln RUR
12.5
1H 2013
Average price, 000 RUR
35
2011
+158%
2012
+50%
35
+14%
29
+71%
23
16
15
18
14
12
7
Centobuv
Gloria
Jeans
+36%
Sportmaster Inditex
odji
(Ostin)
(Zara,
(OGGI)
Bershka,
Stradivarius,
etc.)
InCity
2010
2011
52
2012
51
2013F
36
0.10
33
0.09
30
0.08
26
25
0.07
23
21
20
0.06
19
18
15
10
10
5
8
6
0.05
15
15
13
11
11
8
7
10
9
4
9
9
10
4
11
10
14
14
10
0.04
0.03
0.02
5
4
0.01
0
0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Growth rate ($), %
Growth rate (RUR), %
Cosmetics & perfume market turnover, $ bln
37
40
25
30
20
20
10
0
-10
2005
2006
-20
2007
2008
11
4
-22
-30
2009
2010
2011
2012 2013F
Growth, %
Dalnevostoc
hny region
+19%
Yuzhny
region
+22%
8
7
6
5
4
3
2
1
0
Sibirsky
region
+18%
38
Summary
Three main facts to remember
39
Thank you
Mikhail Pershin,
Head of Russian Retail Practice, Accenture
mikhail.pershin@accenture.com
www.accenture.com
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