Varvara Vasciuk, from our UK MSS practice, writes about we can learn about customers in Russia from the various successes and failures of Western organisations’ attempts to enter the Russian market.
“Russia is a riddle wrapped in a mystery inside an enigma” (Sir Winston Churchill) – which is a challenge for consumer goods brands looking to conquer this attractive market. Western brands are welcome in Russia, but as competition intensifies, understanding consumers is becoming increasingly important. I thought that understanding consumption preferences of Russian women would be a good start.
Russia re-appeared on the maps of western consumer goods manufacturers after the collapse of Soviet Union in 1991, and has established itself as a desirable market over the past decade, when the real disposable incomes of 140mn population rose by 10% annually before the recent economic crisis (now followed by a strong recovery with 2-3.5% GDP growth in 2009). It is not only the growth and the size of the market (Russian retail market is considered the biggest in Europe, and Russia was only recently replaced by China as a leading market for luxury goods) that makes Russia attractive, but also the strong demand for high-quality imported goods.
Foreign brands are perceived as a guarantee of quality and the access to them was unattainable for many Russians in the Soviet Union era, so ever since 1991 the demand for imported goods has been so strong that many western brands succeeded in concurring the market even despite making what may seem as classical marketing mistakes: using product names that mean nothing to a Russian consumer (Coldrex, Clearasil, Head-and-Shoulders, Wash-and-Go etc.), billboards containing only brand and category name in categories that were unknown in Russia (e.g. some whiskey adverts), or translating slogans directly from English and turning them into completely meaningless phrases (e.g. Johnny Walker’s “We are walking” campaign).
After a decade of successful market entry campaigns, now most large western brands have strong presence in Russia (e.g. Procter & Gamble, H.J. Heinz, Avon, PepsiCo, Quelle, L’Oreal, SABMiller etc.). As the market approaches its maturity and the competition grows, simply putting high-quality product on a supermarket shelf is no longer enough. A deeper understanding of Russian consumer is required to sustain the success, and this is where western companies face challenges.
Understanding the consumption preferences of Russian women would be a good start for uncovering the mystery of Russian consumers. After all, Russian women are in most families the decision makers when buying food (market worth $203bn) and household goods; they spend over $9bn a year on cosmetics, $41bn on clothes and over $4.5bn on jewellery. So, what do Russian women want?
Of course, the answer will depend on who they are, you will say. Their income, psychological type, lifestyle and education will be important to understand what they want. However, I can think of three features that are common for most Russian women independent of the segment:
- A combination of loyalty to Russian traditions and love for everything foreign: Modern Russian women still love spending time in their dachas (country-homes) and traditional Russian baths – but it is mainly Martini they will drink there, quite likely with a bite of Russian “pirogi”. Foreign means class and good quality, so a lot of foreign category and brand names are not translated into Russian but pronounced in English, often made unrecognisable by the accent. The two main cosmetic store chains are called Il De Beaute and L’etual, written in Cyrillic. Russian consumer goods companies are well aware that a product with a foreign name has better chances in the Russian market, and position their brands as foreign: TJ Collection, Vitek, Carlo Pazolini.
- Aspirational view of life: Russian women like to see life in its best colours. “Real women” adverts like the western advert for Dove will not work in Russia, as Russian women find them repulsive and reminding them of their own shortcomings. Extreme sexual content is also not welcome (Russian women were disgusted by the western version of Herbal Essences advert comparing the hair washing experience to sexual pleasure).
- The “show off” factor: Russian women like flaunting their wealth and status, and they use western brands for a clear demonstration of their taste and financial well-being. In Russian tradition being practical with money has never been perceived as an admirable quality. Many Russian women will spend money on expensive clothes, cosmetics and drinks, even if they can barely afford to pay their flat rent. No wonder, Russia is a perfect market for luxury goods.
With this brief look at what is inside the Russian doll, there are three lessons for western brands trying to win the hearts of Russian women:
- Keep the western brand western, and do not try to “russify” it or make a connection to Russian traditions
- Make her believe her life is perfect and your product is an integral part of that perfect life
- Let your product make her feel superior.
This is a bit of the enigma uncovered – but if you really want to create a winning strategy in the Russian market, a deeper understanding of specific segments is required.