Future of
Russian
Middle Class
Daria Ivanova
St. Petersburg
Project goals
• To describe and define Russian
middle class in general figures
• To identify existing and forecast
most pr...
Middle class – Definition
The middle class is a class of people in the middle of a societal hierarchy. It is the broad gro...
Russian Middle Class definition & criteria
for the purpose of this project:
•

•

Own apartment / rented, acquired
using m...
Cost of middle class living in Russia: 52 kEUR per year
(average family; parents & 1 child)

Apartment, mortgage or
rent
C...
Middle Class Expenses Breakdown
100 %
90 %
80 %

7,2 %

5,7 %

7,2 %

9,2 %
5,0 %

18,8 %
18,7 %

70 %
60 %

12,0 %

50 %
...
Family status
120
100
11

12

13

17

66

62

Moscow

80

St. Petersburg

60
40

No answer
Widowed
Divorced
Single
Couple,...
Living conditions
120
100
80

2
10
7

3
10
5

60
40

74

77

Apartment from
government
Private apartment
Private house

20...
Lifestyle
Finland
City population
Working hours

Russia

Helsinki
Helsinki – 1 mln

Moscow & St. Petersburg
Moscow – about...
Traffic – the time killer – getting worse

Desire

Reality
Lifestyle
Urbanization

Moscow 2013
Megatrends of today – shaping the future

'new entrants'
- middle class
is growing in
absolute
number

hectic pace
of life...
Mega trends of today – this is what middle class says:

We believe in
We pay for
European
service and
We want best
quality...
Middle Class is growing
25
20

20
15

14

10
5
0
2012

2018

Middle class, mln., est
Cyber space
100
80

73 73

77 78

60

51 49
32

40

23

20

•
•
•
•
•

marketing
distance working
online shopping
travel
V...
Hectic pace of life & increasing demand for services
Today - Tomorrow
10

Service spenditure in the budget, 2012

18

Serv...
Mistrust in Russian service providers

Middle class seems to appreciate foreign knowledge and know-how what comes to
pharm...
Integration of Russian middle class into world community
Europeanizing and Globalizing
Future trends
•
•
•
•
•
•

rational consumption: sustainable instead of ‘bling-bling’
increased online shopping: local and...
Trends might lead to following by 2018:
Ageing and yet active
Russian middle class

Demand for private
caretaking

Traffic...
Trends might lead to following by 2018:
Disappointment with life
quality

Emigration

Middle class in Russia
wants to inte...
Trends might lead to following by 2018:
Efficiency gains at
production sites

Shrink labor market
Demand for vocational
tr...
Future opportunities for Finnish companies

wellbeing &
healthcare

leisure &
travel

food &
diet

education
• health resorts & sanatoriums
• check-up and diagnostics centers
• mothers-to-be & mothers with babies
• family centers
•...
• tailor-made tours (hunting,
fishing, golf, tennis, sailing,
skating)Green card for new
golfers
• honeymooners' weekends
...
wellbeing &
healthcare

leisure &
travel

food &
diet

education
• short-term educational programs
for children
• further ...
wellbeing &
healthcare

food &
diet
• baby food, bio-products
for children and for
mothers-to-be, super
food
• traffic sna...
Thank you for your attention
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Future of Russian Middle Class

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Transcript of "Future of Russian Middle Class"

  1. 1. Future of Russian Middle Class Daria Ivanova St. Petersburg
  2. 2. Project goals • To describe and define Russian middle class in general figures • To identify existing and forecast most pronounced trends that will be shaping Russian middle class lifestyle in the future • To summarize results in a report and disseminate findings via signal session or seminar.
  3. 3. Middle class – Definition The middle class is a class of people in the middle of a societal hierarchy. It is the broad group of people in contemporary society who fall socio-economically between the working class and upper class. The common measures of what constitutes middle class vary significantly among cultures – Wikipedia. Russian middle class are the people who have managed to adapt their material life standards according to conditions of modern market economy after collapse of Soviet Union.
  4. 4. Russian Middle Class definition & criteria for the purpose of this project: • • Own apartment / rented, acquired using mortgage lending or inherited Min 1 car in the family Significant expenses are used for services – education, insurance, entertainment Savings exist • Vacation abroad 1-2 times per year. • • m i d d l e c l a s s 5 mio residents of St Petersburg 12 mio residents of Moscow Share of middle class 15-20%
  5. 5. Cost of middle class living in Russia: 52 kEUR per year (average family; parents & 1 child) Apartment, mortgage or rent Children exp 13500 9750 Food 7500 Services 6250 Savings 3750 Entertainment 3750 Vacation Euro per year 3750 Car cost (fuel, ins, service) 3750 0 Information source: Finpro expert estimation 2000 4000 6000 8000 10000 12000 14000 16000
  6. 6. Middle Class Expenses Breakdown 100 % 90 % 80 % 7,2 % 5,7 % 7,2 % 9,2 % 5,0 % 18,8 % 18,7 % 70 % 60 % 12,0 % 50 % 7,2 % 40 % 30 % 6,4 % Entertainment – going out to cinema, theater, restaurant, cafe Child – toys, activities, education, baby-sitter Services, fitness, healthcare, education, telephone 17,0 % Vacation 14,4 % 7,2 % 11,0 % Food Transport (1 car per family, insurance, gas, repairs) 20 % 26,0 % 27,0 % Russian middle class 10 % Savings Flat, mortgage or rent Average Finn 0% Information source: Statistics Finland. Finpro expert estimation
  7. 7. Family status 120 100 11 12 13 17 66 62 Moscow 80 St. Petersburg 60 40 No answer Widowed Divorced Single Couple, unmarried Married 20 0 Information source: Synovate Comcon. Wealthy Consumer Lifestyle
  8. 8. Living conditions 120 100 80 2 10 7 3 10 5 60 40 74 77 Apartment from government Private apartment Private house 20 7 5 Moscow 0 Room in the apartment Rented appartment St. Petersburg Information source: Synovate Comcon. Wealthy Consumer Lifestyle
  9. 9. Lifestyle Finland City population Working hours Russia Helsinki Helsinki – 1 mln Moscow & St. Petersburg Moscow – about 10 mln 8 a.m. – 4 p.m. St. Petersburg – about 5 mln 9 a.m. – 6 p.m. Approximate time of 7 a.m. 6.30 a.m. leaving home Approximate time of About 5 p.m. After 8 p.m. returning home Vacation 30 days of annual leave converts to 28 days of annual leave 5 working weeks of vacation. 4 working weeks of vacation (as Sat & In average 10 public holidays Sun are included). annually. In average 12 public holidays per year Sick leave 2 months with retention of salary First day of sick leave with retention of salary (thereafter max 800 EUR monthly compensation from public fund) Payment for 80% by insurance (KELA), 20% by Usually 100% by patient pharmaceuticals patient Information source: Synovate Comcon. Wealthy Consumer Lifestyle
  10. 10. Traffic – the time killer – getting worse Desire Reality
  11. 11. Lifestyle
  12. 12. Urbanization Moscow 2013
  13. 13. Megatrends of today – shaping the future 'new entrants' - middle class is growing in absolute number hectic pace of life & congestion demand for services time spent in cyber space mistrust in Russian service providers integration of middle class into world community
  14. 14. Mega trends of today – this is what middle class says: We believe in We pay for European service and We want best quality in quality must value for our education, be good – no cash funds food, medical waiting time and care tolerated We utilize all possible We have online access to all services for opportunities purchasing, now contacting and fun
  15. 15. Middle Class is growing 25 20 20 15 14 10 5 0 2012 2018 Middle class, mln., est
  16. 16. Cyber space 100 80 73 73 77 78 60 51 49 32 40 23 20 • • • • • marketing distance working online shopping travel VKontakte.ru 0 Moscow St. Petersburg Middle class online shopping Information source: Synovate Comcon. Wealthy Consumer Lifestyle
  17. 17. Hectic pace of life & increasing demand for services Today - Tomorrow 10 Service spenditure in the budget, 2012 18 Service spenditure in the budget, 2018
  18. 18. Mistrust in Russian service providers Middle class seems to appreciate foreign knowledge and know-how what comes to pharmaceuticals & medical care, education & innovation . Parents invest in education and recreation of children abroad. Medicine of foreign origin are perceived efficient.
  19. 19. Integration of Russian middle class into world community Europeanizing and Globalizing
  20. 20. Future trends • • • • • • rational consumption: sustainable instead of ‘bling-bling’ increased online shopping: local and global products and services investing and purchasing real estate in Russia and abroad desire for natural, healthy and clean food in Russia – respect for bestbefore-dates, nutrition for mothers-to-be careful attention to health, sports activities, using services of beauty parlors use of private medical services,
  21. 21. Trends might lead to following by 2018: Ageing and yet active Russian middle class Demand for private caretaking Traffic congestion of megacities Remote work Increase in spending High level of debt
  22. 22. Trends might lead to following by 2018: Disappointment with life quality Emigration Middle class in Russia wants to interact with middle class Desired schools, home address and services Changes in educational system More private schools and universities
  23. 23. Trends might lead to following by 2018: Efficiency gains at production sites Shrink labor market Demand for vocational training Eco-awareness has risen Less waste and consumers avoid heavy-packaging and throw-away-items More traveling for more people, time limits Express weekend trips
  24. 24. Future opportunities for Finnish companies wellbeing & healthcare leisure & travel food & diet education
  25. 25. • health resorts & sanatoriums • check-up and diagnostics centers • mothers-to-be & mothers with babies • family centers • Nordic walking wellbeing & healthcare leisure & travel food & diet education
  26. 26. • tailor-made tours (hunting, fishing, golf, tennis, sailing, skating)Green card for new golfers • honeymooners' weekends • anniversary travel (photos) • wine tastings • mother & baby weekends wellbeing & healthcare leisure & travel food & diet education
  27. 27. wellbeing & healthcare leisure & travel food & diet education • short-term educational programs for children • further education for adults • learn English in Finland (Finglish for Russians!) • 100 words of English during weekend
  28. 28. wellbeing & healthcare food & diet • baby food, bio-products for children and for mothers-to-be, super food • traffic snacks & survival kits • quick gourmet leisure & travel education
  29. 29. Thank you for your attention
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