Findings from a consumer survey fielded in Russia paint a picture of a complex, highly nuanced consumer marketplace - one in which consumers spend more on food than they do on rent or utilities, and more than half the population is uneasy about purchasing clothes online, according to the inaugural Russian Consumer Report 2014 conducted by Landor Associates.
The study found that Russian consumers prefer to buy Russian goods, but that domestic companies are failing to deliver on their expectations. Almost half (45%) believe that Russian brands understand what's right for Russians better than Western brands do. But, while Russians generally feel that native brands are better placed to meet many of their needs, international brands continue to outperform them on key metrics such as innovation, prestige, style, and quality.
"The stereotypes of Russians - such as being 'ravenous for Rolex' - which were formed during the 1990s have long since receded," said Emma Beckmann, country director for Landor's Moscow office. "Today, the Russian consumer is a far more complex proposition. Our respondents demonstrated that Russia remains a land of contrast and contradiction, where brand building is now more important than ever."
Russian companies clearly do understand marketing, but the idea of a brand - and by extension loyalty to a brand - remains relatively new, with some 34% of Russians saying they try out new brands most, or all of the time, and are not brand loyal. This doesn't mean that brand loyalty doesn't exist, of course: it's just higher in some categories than others, with electronic goods, cosmetics, and health and beauty-particularly with Western products-proving 'sticky' for over half of Russians.
There's more testing, trying, and switching with fast-moving consumer goods; less than a third of consumers claim loyalty to a soft drink brand, and only a quarter stay with the same snack brands. When asked which categories Russians were most likely to choose other labels for, groceries, clothing, health and beauty, cleaning, snacks, and soft drinks came out on top.
Among the survey's other findings:
- When purchasing food, Russians prefer high-quality products to processed foods; 76% of respondents say they are willing to pay more for quality, while 90% say they prefer to purchase domestic food and dairy products.
- 37% of Russians make an online purchase at least once a month, but Internet spending is still lagging behind Western nations, with only 45% of Russians preferring to buy at physical stores.
- Russian customer service has long been the butt of many a joke, yet 54% of Russians think service is improving overall - although it still lags behind Western standards, as 84% think customer service is worse than in Western Europe, and 37% consider Russian service "much worse".
- Russians also have an aversion to the words "cheap" and "budget" when shopping. Consumers' reaction to questions concerning how comfortable they felt buying a budget brand was overwhelmingly negative, with fewer than 20% giving low-cost brands a "yes" in most cases. Products for children, cosmetics and shoes performed particularly poorly in this respect.
- Contrary to the perceptions that Russians love premium and luxury brands, only 17.5% of respondents have a preference for them.