Region-Media - Advertising agency for Russia's regions
Region-Media Advertising agency
for Russia's regions

Consumer behavior in Russia: highlights on consumer segments, brand perception, advertising, and channels


Russia's sizeable population (143 million) helped attract foreign commercial attention when the country began opening its markets in the 1990s. Despite the sheer size of the market, consumer behavior and trends throughout the 1990s, together with other factors, diminished the hopes of many aspiring market entrants while inspiring others able to tap niche markets and segments. Consumer trends in Russia continue to change as consumer power and purchasing activities expand. This report provides highlights of some important consumer trends and developments, including Russian consumer segments, attitudes toward brands (Russian and foreign), perceptions on advertising, and use of distribution channels. Careful consideration of such information may be useful to companies in evaluating market prospects and planning a market entry strategy for Russia.


Consumer goods manufacturers, distributors and advertisers have recently started showing increasing interest in the structure of the Russian consumer market and segmentation based on consumption habits and styles rather than traditional demographic gender-and-age and income characteristics. Moscow Representation currently places great emphasis on retail and consumer behaviour recently conducted a study that revealed seven primary consumption styles in the Russian consumer market. In the 18 months (particularly between August 2001 through August 2002), practically all of these consumption styles underwent radical changes. As suggested by the analysis, the largest segments may not hold the strongest potential for foreign firms entering the market. The group of consumers called Innovators deserves to be the focus of a supplier's attention. The share of these consumers in Russia in 2001 was rather small - only 8% - but relatively large in Moscow, making up 18%. These are the people whose consumer potential is significantly higher than the average. They exhibit an explicitly innovative consumer behavior. Nearly half of the group is under 30 years old. In addition, half of the group is comprised of business people and white-collar employees. One-third of them live in megalopolises. Innovators prefer to spend their free time involved in sports activities and active leisure, and eat out in restaurants featuring exotic cuisine. Interestingly enough, the year 2002 saw a drastic increase (from 8% to 15% for Russia) of the share of this type of consumer in the market.

The second largest group of consumers in Russia is in the cluster called Spontaneous (19% of consumers in Russia and 23% of consumers is Moscow). In contrast to the previous cluster, primarily men dominate it. Their consumer potential is average, while their consumer behavior has a tendency toward innovations. The time factor is essential, and they often buy goods impulsively. This group features a large share of employees with a secondary education, and it contains 1.5 times as many unmarried people as the sample's average level. The cluster called Ambitious is a little smaller: it comprised 11% of consumers in Russia (9% of consumers in Moscow) in 2001, although in 2002 for Russia their share grew up to 15%. Their consumer behavior is strongly inclined to innovations, although their consumer potential is much more moderate than the above groups. These consumers rely on advertising when looking for a product. A large share of these consumers live in regional administrative centers, such as regional capitals and major industrial cities.

Self-realized is the name of the next cluster (12% consumers in Russia and 8% in Moscow). Their consumer behavior is as traditional as that of the Traditionalists (below), but their consumer potential is high. These are mainly mature-age people. The women's share is slightly greater. This cluster has the largest share of people disturbed or annoyed by advertising. These consumers value reliability and quality of goods. They pay great attention to health care.

The largest group of consumers belongs to the cluster called Settled (25% of consumers in Russia and 21% in Moscow). Their consumer potential is average or above-average. Their consumer behavior is rather traditional: novel products do not interest them too much, and their consumer preferences are already distributed among brands. Women dominate this cluster. Age and education corresponds to the sample's average level. Sixteen percent of consumers in Russia and 20% in Moscow belong to the cluster called Traditionalists. Their consumer potential is comparatively low, as consumer behavior is strongly traditional. Half of the group is comprised of retired individuals. The majority of these consumers are regular customers of retail outlets that have survived since the Soviet times. The last and smallest cluster, called Thrifty, accounts for 8% of consumers in Russia and 1% of consumers in Moscow. Their consumer potential is the lowest of all. Their consumer behavior is closer to being traditional. Half of them are above 50 years old, and their education level is lower than the sample's average. For the most part the cluster consists of village and small town residents. For them the most significant argument for or against buying a product is the price factor, and they can go through many retail outlets in search of the smallest discount. Another characteristic is that they often buy goods spontaneously. In 2002 this weakest of all groups gained another 3% and now makes up to 11% across Russia, at the same time their consumer potential decreased even more.


Looking at traditional attitudes to local brands in the aggregate two major driving forces are noticeable in prompting a customer to choose a Russian brand: price and perceived image (including stereotypes). First, local brands can be considerably cheaper than their foreign counterparts. Second, consumers feed their patriotic feelings when buying Russian brands - original or perceived. Local products are also believed to be healthier than international in that they are usually made of domestic ingredients, which are presumed to be healthy and habitual for local consumers, in part because they contain fewer or no preservatives. The following two tendencies can be used to characterize the general attitude towards Russian (or perceived to be Russian) brands: 1. local brand loyalty is increasing as 2. the quality of domestic goods is improving. As a result, local manufacturers win the good quality for money perception battle. However, many lose ground in marketing as it is common for Russian firms to restrict resources dedicated to creativity, advertising and market research. As a result, consumers may not accept a domestic brand name, or a certain package design. Nonetheless, there are an increasing number of Russian companies developing and using successful marketing approaches, even as product and packaging quality are improving.


How have foreign companies reacted to the changing market environment? Many decided to launch Russian brands, by creating 'national' brands, which gained popularity among Russian consumers almost as fast as local brands. What do these new brands have that their imported counterparts don't? These brands have a vivid Russian image and can be positioned as Russian national quality brands. Through this new strategy foreign manufacturers are able to compete with local producers using the same set of tools.

Meanwhile, as incomes began to grow, consumers started to turn back to international brands, keeping the same positive attitude towards local brands intact. The following changes in attitudes towards local, as opposed to international, brands took place in the last year:

  1. Incomes keep growing;
  2. Surviving stage (post-financial crisis) is over;
  3. Consumers again have an opportunity to keep their savings in the banks and insurance companies and to return to their pre-crisis purchasing habits. It's also worth noting that promotion and advertising activity of international brands has increased. Aggressive advertising plus promotion policy and a slight decrease in prices are currently the three most important factors shaping consumer choice.


In the past few years national entrepreneurs began to reconsider their advertising strategy. They realized that old methods cannot be applied to Russia's changing consumer environment. Consumers are weary of strict product-oriented advertising and dislike rough emphasis on product characteristics only. They find such ads boring and ordinary. Consumer preferences in advertising have gradually changed in favor of the following criteria: interesting, involving, humorous. They now want to see a performance, something intriguing, spirited, absolutely new and eye-catching. Although consumer preferences in advertising have changed, some traditional approaches have remained. Among them:

  1. Showing product features through a beautiful nature scene (Aqua Minerale, Goesser, etc.);
  2. Adverting through an advertising series. This last technique is widely used not only in TV commercials, but also on billboard advertisements (Nescafe, Rossia, Bochkaryov).

To sum up: an ideal commercial in today's Russia should be: humorous, bright, beautiful, based on unexpected or intriguing plot, featuring elements of acting, and should combine image and product qualities. It's becoming common to show the product and brand benefits subtly, accompanied by a typical atmosphere, mood, and finally - a consumption style sketch. Appetizing elements (ingredients, flavor, product outlook, etc.) are also likely to be a part of a visual message.

Some examples: Twix (chocolate and snack bars), Sprite (soft drink), Stimorol (chewing gum), Dirol (chewing gum), Nescafe (instant coffee), Lipton (instant tea), Panadol (medication), Tolstyak (beer), Bochkariov (beer), Gallina Blanca (instant soups and flavoring), Maggi (flavoring and soups).


In looking at household spending habits for Russia's urban population, Russia's fast moving consumer goods (FMCG) sector — including food, cosmetics/toiletries, household supplies, and other types of consumer goods - illustrates the role of primary retail channels in Russia: grocery stores, produce markets, and supermarkets. Priority is given to a small, multipurpose grocery stores - 37% of spending on an average produce cart goes through this channel. Wholesale produce markets or Farmer's Markets come in second - 24%. And finally, large-scale grocery stores or supermarkets - 12%, take the third place. This last group takes up the greatest share in the following three regions: Moscow city, the North-West Region, and the Urals. St-Petersburg is characterized by a rapid growth of discount supermarket chains. The highest share of small retail stores is observed in the Urals, Siberia, and the Far East. Farmer's markets play a very important role in Moscow, the Central Federal District, as well as Southern Russia and Lower Volga. If we take a look at where consumers prefer to shop for different types (or groups) of FMCG, this is what we see. Different types of products can be broken down into corresponding household spending channels. For example, on meat and meat products the highest share of household spending (44%) is traditionally spent in farmer's markets. Small retail outlets and supermarket channels come in second and third respectively. It's worth noting, that farmers' market channels take on the highest weight for this group of products in Southern and Central Federal Districts (61% and 51% respectively). In St-Petersburg a significant share of household spending on milk and dairy products is liquidated through discount stores (10%). This tendency is true for Moscow as well. For household detergents and appliances the most common distribution channel is a traditional household store. It is reasonable to expect that sooner or later Russia will see a rise of specialized household chains, similar to Ukraine's. Personal hygiene is a hard category to attribute to a certain expenditure channel. In Moscow, for example, consumers prefer to buy shampoos, soaps, toothpaste etc, either on consumer goods markets or in supermarkets. Some prefer to shop in perfume stores and household stores, as well as multipurpose produce stores.

To summarize retail development trends: large-format stores will continue to become increasingly popular; the main shopping scene for Russians (outside of Moscow and other major cities) is still in a small grocery or convenience stores or other specialized stores (reason: convenient location), as well as consumer goods markets (reason: low prices for main categories of products). All these taken into consideration, it is not surprising that we are witnessing a rise of new consumer channel, namely — medium-size discount supermarkets, such as Piaterochka, Kopeika, and Aldi in Moscow.


Given the growing number of regions beyond Moscow considered to have relatively high business development potential — including St-Petersburg, Rostov, Krasnodar, Nizhny Novgorod, Tatarstan, Bashkortostan, Samara, Yekaterinburg, Krasnoyarsk, and Irkutsk — a final but important note related to consumer behavior in Russia for any company considering market entry is that significant differences and variations can exist from region to region, in addition to potentially vast differences between the center(s) and Russia's provinces. It may come as a surprise, but some businesses report finding that the real differences between neighboring regions in Russia may in fact be greater, than between neighboring European countries. Companies considering whether or not to enter the Russian market in several regions should consider preparing not just one nation-wide plan, but several business plans or a multifaceted plan to reflect the unique aspects and demands of different regions. Russia's current experience shows that those who come to the regions first and use local resources effectively are most likely to become leaders in their field.