Moscow rated No1 among Russia’s cities most attractive for retailers
19.11.2015 468 views
JLL issued Destination Russia, a report timed to the MAPIC international exhibition taking place in France
The study is based on the analysis of presence of over 250 domestic and international brands in major cities of Russia and discusses the retail business growth potential in those markets, the availability of modern retail formats in each city and the level of retailers’ demand. Besides Russian cities were rated by the presence of domestic and foreign brands.
Among the findings are the following:
• Moscow, St. Petersburg and Yekaterinburg top the list of Russian cities by the presence of retailers.
• The absolute leader among the Russian cities in terms of the number of luxury brands is Moscow, by a wide margin followed by St. Petersburg, Yekaterinburg, Nizhny Novgorod, Samara and Rostov-on-Don.
• As few as eight of all the analyzed brands have 100% market coverage in key Russian cities.
• Only adidas and Yves Rocher out of the international brands analyzed in the report have 100% coverage of the market in major Russian cities.
• Italy is the leader among the countries of origin of foreign brands represented in Russia, mainly due to the development of retailers offering top-range luxury goods.
Moscow is the leader among Russian cities in terms of retailers’ presence. It is no surprise that the Russian capital is the most attractive for retailers, because the city is characterized by relatively high-level incomes, population growth, a large number of modern high-quality shopping centers and dynamic street retail.
It should be noted that Moscow is also ranked No.3 among key European cities with the highest presence of international retailers. The capital city is a top spot on the map of Russia for retailers planning to enter the country market. After their debut in Moscow, retailers usually tend to continue expansion to a selected range of the regions.
Among the regional cities the highest retailers’ presence is demonstrated by St Petersburg, Yekaterinburg, Krasnodar, Novosibirsk and Rostov-on-Don, which are within the top-5. St. Petersburg is the second most popular market for retailers in the country: 80% of the analyzed brands are present there.
About 65% of brands work in Yekaterinburg, and half of all surveyed retailers work in Krasnodar, Novosibirsk and Rostov-on-Don. At the bottom of the top-10 cities in terms of retailers’ presence in Russia are Samara, Ufa, Kazan, Nizhny Novgorod and Tyumen.
"Unlike Europe, a “mall model” prevails in the Russian retail market and the lion’s share of retailers’ revenues is generated at their outlets in shopping malls. Therefore, opening of new shopping centers will be the key driver of the inflow of new retailers in a given region - says Maria Shpakova, Retail Market Analyst at JLL. - The most energetic activity of shopping center developers was seen in cities with a large population and a high level of income. Consequently, the most significant indicators of the retailers’ presence are registered in such regions, rather than anywhere else.”