The Russian market situation


The growth rate of Russia is the highest among European Countries. Sales are concentrated in household appliances deemed essential, such as refrigerators, washing machines, irons, vacuum cleaners and domestic conditioners, while the appliances such as the dishwasher are luxury goods, reserved to the wealthiest population only.

Benno Scharf

With a surface of over 17 million square kilometres (57 times the Italian one), Russia is the widest Country in the world. The population is not, however, proportional to the territory; in 2012 it was estimated to amount to 142 million inhabitants, with a clearly negative trend, being births inferior to deaths and to emigration.
As renowned, only one fourth of the national surface is part of Europe, while the remaining three quarters are in Asia. The population ratio is however inverse: the European Russia counts 78% of the total population, the Asian part only 22%.
The economy of the Country, impoverished by the Communist seventy years, has had, and still has, a sensible growth, to the extent that today the per head income is about the half of the Italian one. This has led to the formation of a rich class on one hand, with a quite large average class on the other. Nevertheless, about 12% of the population still lives under the so called poverty threshold.
Houses are just less than 40 millions, while only two cities stand out by size from the others: Moscow, which exceeds 10 million inhabitants, and Saint Petersburg, which almost reaches 5 millions.
These two urban areas represent anyway the strongest concentration of the market of durable goods. Even if they count together slightly more than 10% of the Russian population, in the case of white goods their incidence reaches 25% of the total market.

Market and diffusion
The Russian market has the typical characteristics of developing nations’. Sales are concentrated on the household appliances deemed essential, such as refrigerators, washing machines, irons, vacuum cleaners and domestic conditioners, while the appliances such as the dishwasher are luxury goods, reserved to the wealthiest population.
The market of the mentioned appliances is anyway strongly rising, with yearly development rates that are included between 5% of refrigerators and 11% of conditioners.
In the ambit of cookers it is worth observing that Russia is notoriously the biggest world gas producer; for this reason, thanks then also to the low cost of its supply, in Russian houses the gas cooker neatly prevails, while the electrical or mixed type does not reach one third of the total.
The greatest majority of the Country’s houses have small sizes and in particular cookers and bathrooms are often tiny. A situation that has oriented consumers to prefer small-size appliances; they often do not purchase a determinate refrigerator or washing machine because the overall dimensions are judged excessive compared to the existing spaces. The preference is then oriented to the least cumbersome model, even better if at low cost.
Built-in types have scarce diffusion: for refrigerators, it is 6% in sales, while you reach 50% only for dishwashers. This because the modern kitchen equipped with built-in household appliances is still scarcely diffused in the mass; on the contrary, the few consumers that can afford it wish also the dishwasher.
Generally speaking, in almost all houses there is the refrigerator, the washing machine and the iron. To this initial base they have added various small appliances over the last few years. Therefore, they estimate that in 2012 they sold about 3 million appliances for the preparation of food, from hobs to toasters, from fryers to mixers and similar. Besides, in the same year, they sold a good 9 million appliances for the body care: electrical shavers, hair-dryers, etc …and almost 3 million electrical heaters for the environment or water.

The Russian market is mostly (about 80%) satisfied by the national production. Leader for some products is the Italian Group Indesit, whose global share exceeds 20%; besides it, the Swedish Electrolux and the German BSH. All these three important Groups operate with local production plants.
The most diffused national brand is Eldorado. It is the main specialized shop chain that, besides operating in various hundreds of  big surfaces all over the world, outsources to subcontractors a complete range of white goods and consumer electronics, then all offered to the public with its own trademark and at competitive prices.
Other important national brands, especially operating in refrigeration, are Birusa and Atlant.
The import covers the remaining 20% of consumption; it comes, first of all, from Italy and to a lesser extent from Poland and Germany.

The Russian market of white goods currently shows the highest growth rates among European Countries’. Even if the general crisis seems to have affected the development of this Country only modestly, judged second only to few others. Therefore, it is common opinion that the growing trend in course can continue for at least some years.

Sales and diffusion rate of the main household appliances in Russia in 2012
[table id=6 /] Sources: Rosscom, Statistics of Russia, Sector press