MOSCOW: Russian consumers are increasingly focused on price and quality, with value for money a key driver of purchase as the days of ostentatious luxury buying are left behind, a new study has said.
The Russian Consumer Report 2014 from Landor Associates, the brand consultancy, surveyed 2,000 consumers about buyer behaviour in a total of 11 areas, including online retail and brand loyalty. It found that the stereotypical New Russian – someone who had got rich quickly in the 1990s and liked to spend money on 'bling' – was a thing of the past and that the modern Russian consumer was a more complex figure.
Only 17.5% of respondents preferred premium or luxury goods, with the great majority (70%) now seeking out value for money purchases.
In addition, they tended to prefer domestically manufactured brands over imported ones – although at the same time most (84%) found Russian services inferior to those in Europe.
"Respondents have demonstrated that Russia remains a land of contrast and contradiction, where brand-building is now more important than ever," Emma Beckmann, Landor's country director for Russia, told the Moscow Times
Her comments were echoed by Ben Aris, editor of bne.eu, a business e-magazine that assisted Landor in preparing the survey. "The report basically shows that the middle class has become the main focus of retail and that the whole Novy Russki thing is now officially dead," he declared.
The largest part of Russian salaries goes on food, with more than three quarters of respondents saying they spent "a lot" or "quite a lot" on groceries every month. But they were prepared to opt for better quality as 43% indicated a preference for premium products, and 76% were willing to pay more for quality.
And around one third said they were ready to try new brands, a trend that was especially evident in the FMCG sector. Less than one third felt any loyalty to a soft drink brand while only one quarter expressed similar sentiments about snack brands.
Brand loyalty was higher in other categories, such as electronic goods, cosmetics, health and beauty, which, Landor noted, were largely dominated by Western brands.
Spending on children ranked third for Russian families, after food and rent, with almost half of respondents saying they preferred to buy premium products for their children, and just 14% turning to low-cost goods.
Data sourced from Moscow Times; additional content by Warc staff