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Russian Consumers and the New Economic Reality

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Companies that align their strategies with budget-conscious households will find many opportunities in Russia.

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Russian Consumers and the New Economic Reality

  1. 1. MAY 2018 Russian Consumer Sentiment 2018 Russian Consumers and the New Economic Reality
  2. 2. 1 Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Exhibit 1: Russians’ budgets squeezed by inflation outpacing income growth 11% 13% 5% Inflation, % year—on—year Source: Russian Statistics Agency 1. Converted from RUB into USD using 2016 average exchange rate for comparability. 6,000 4,000 2,000 0 4,655 2013 4,986 +7% +10% 2016 5,519 2015 +1% 5,470 2014 CAGR 2013- 2016 10% 6%+7% +10% +1% Average per capita annual income (USD1)
  3. 3. 2 Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Text Unhealthy categories -10% 20% 60% 40% -20% 20% 0% 10% 30%-20% 0% Restaurants & outside food Household goods Alcohol Confectionary Soft drinks Frozen goods Bread & pastry Utilities Personal services Drugs & vitamins Medical services Dairy products & eggs Fruits & vegetables Education & self-development Entertainment Purchase of auto Travel & tourism increased spending in last 2-3 years Baby food Fish & seafood Telephone & internet Medical insurance plan to increase spending next year Meat Baby goods TobaccoReady-to-eat food Charity Decreased and plan to increase Decreased and plan to continue decreasing Increased and plan to continue increasing Increased and plan to decrease GroceryServices Non-food Exhibit 2: Consumers plan to cut back on “unhealthy” products but spend more on fresh foods and education Source: Russian consumer sentiment, 2017
  4. 4. 3 Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Exhibit 3: High-priced medicine means 33% go without 23 11 33 25 24 36 12 25 Don't buy medications Buy cheaper alternatives or generics 9 4 Never (0%)Rarely (0-10%)Sometimes (10-30%)Often (30-75%)Almost always (>75%) Source: Russian consumer sentiment, 2017 How often do you avoid buying prescribed medicines because they are too expensive? 33% 61%
  5. 5. 4 Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Exhibit 4: Consumers save on travel in several ways 46 44 42 33 33 32 31 19 9 -28 -31 -29 -35 -40 -43 -43 -59 -71... chosen more expensive travel destinations ... traveled abroad more often ... traveled within Russia more often ... traveled more on short-distance ... chosen more often car or train instead of airline ... planned and booked more journeys by myself (w/o travel agents) ... chosen cheaper travel destinations ... decreased frequency of travel ... started planning in advance to save money Source: Russian consumer sentiment, 2017 Note: Disagree = disagree and strongly disagree; agree = agree and strongly agree Please indicate if you agree or disagree with the following statements: I have... Agree Disagree % of respondents
  6. 6. 5 Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Exhibit 5: Russian consumers have become more positive about buying a car 12 19 -6 -5Next year Last 2 to 3 years Source: Russian consumer sentiment, 2017 % of respondents % of respondents who… decreased/ plan to decrease spendingsincreased/ plan to increase spendings
  7. 7. bcg.com

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