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Consumer Profile

Russia is experiencing a sharp ageing of its population. The median age has increased from 38 in 2010 to 40.2 in 2022 (Data Reportal) while 18% of the population is under 15 years and 16% is over 65 years of age (World Bank, 2021). The population decreased by -0.22% in 2022 (CIA). Households average 2.6 people, 26% of households are made up of people living alone and 51% are households with two or three members, 20% are composed by four to five members and only 4% are made up of more than six people (UN, latest data available). Regarding the ratio of men to women, women are 53.6% of the total population. 75.2% of the population lives in urban areas (Data Reportal, 2022). The population is highly concentrated in the western part of the country which extends from the Baltic Sea, south of the Caspian Sea, as well as east of the border with Kazakhtan. Elsewhere there are isolated and sparsely populated lands, especially in the south. The main cities are Moscow, Saint Petersburg and Novosibirsk. In Russia, 95% of adults aged 25-64 have completed upper secondary education, much higher than the OECD average of 79%. This is truer of women than men, as 94% of men have successfully completed high-school compared with 96% of women. Of the active population, 26.3% are skilled professionals, 15.2% work in sales and services, 13.7% are skilled workers, 13.1% craftsmen and builders, 13% operators and machine assemblers, 7.6% have an intermediary occupation, 5.8% are managers, 2.8% are clerks and 2.5% are farmers (ILO, 2020, latest available data).

Purchasing Power

The PPP GDP per capita in Russia is USD 32,803.4 according to the latest World Bank data. In 2021, the average nominal salary was measured at approximately RUB 56,500 per month, marking an increase compared to the previous year (Statista). Inflation has reduced the purchasing power of the Russians. In the Russian Federation, the average household net adjusted disposable income per capita is lower than the OECD average of USD 30,490, and the average is largely driven by the high disposable income of the rich. For several years, Russia has experienced a net decrease in consumption, and the COVID-19 crisis, followed by the war in Ukraine, have exacerbated the trend. Income inequalities are high, the Gini index is 36 but it is decreasing (World Bank). Men in Russia were paid an average salary of 67,100 RUB per month in 2021, nearly 18,500 RUB more than the female wage (Statista). The republics of Dagestan, Kabardino-Balkaria, Chechnya, Kalmykia and Karachayevo-Cherkesiya are the regions with the lowest wages, while the regions with the highest wages are Yamalo-Nenets, Chukotka, Moscow, Nenets, and Magadan.

Consumer Behaviour

Russia is increasingly becoming a consumer society. The main purchase factors are the brand, quality and the longevity of the product. Russian consumers continue to be price conscious, they are also looking for high quality, new, and healthy products. According to a GfK survey, in 2019, 46% of Russians said they were looking for a way to save money and use special offers for this purpose, 54% of Russians say they are looking for stores with low prices. The Covid-19 crisis and the war in Ukraine accelerated this trend. Promotions usually attract Russian consumers with the majority population visiting several outlets to make the best deals. Traditional stores (brand stores, supermarkets, distributors, direct resellers, etc.) are where the most purchases are made. About half of consumers prefer foreign products over local products, however, goods produced in Russia attract more and more people. Russian consumers are generally loyal to brands. In addition, convenience is becoming one of the key priorities for consumers, which has stimulated the development of e-commerce (delivery services) and negatively affected sales in large-format shopping facilities. In the retail food market, the discounter format is increasing.

The Federation is in constant development with regard to online commerce. With its 129.8 million active users on the Internet (Data Reportal, 2022), it occupies the sixth place among the countries with the highest number of users globally (Statista). E-commerce accounted for just 1.4% of Russia's economy in 2019, according to research firm Data Insight. However, since the pandemic, online grocery shopping has become very popular. In 2021, the sector reached RUB 329 billion in turnover (Statista). E-commerce penetration in Russia has increased from 6% of total retail sales in 2019 to about 9% in 2021 (Intellinews).

The principal emerging trend is the consumption of healthier products. Half of the population is willing to pay more for products that improve their health and quality of life, such as fresh produce, fruits and vegetables, education, medicines or travel. According to Nielsen, more than 84% stated that they recently changed their eating habits, The organic market is also growing. According to GfK research, every fourth Russian is interested in farm products and every fifth – in products marked ‘bio’, ‘eco’ or ‘organic’. In 2020, domestic organic production was valued at EUR 35 million, increasing by nearly nine times since 2012 (Statista). The second-hand market is not as developed as in Europe, and only used by specific segments of the population. Most of the exchanges on collaborative platforms concern goods traded between individuals and car sharing (carpooling). The Covid-19 pandemic has stimulated demand for second-hand shoes and clothes in Russia, as shown by research conducted by Russian consulting agency Fashion Research Group. This segment accounts for 6% of Russian fashion market sales.

Consumer Recourse to Credit

When it comes to payments in Russia,  cash is the most used. However, payment cards are developing. With card payments, 87.9% are made by debit cards and 12.1% by credit cards. Household debt compared to GDP is relatively low (16.22%) but increasing. However, the debt compared to disposable income is quite high. In 2018, most loans were mortgages. Consumer credit is used to meet current needs and to buy cars in most cases. Macroeconomic conditions suggest that consumer credit will continue to grow in Russia.

Growing Sectors

Fresh produce, organic products, local products, travel, alcohol, education services, medicines and vitamins.

Consumers Associations

Rospotrebnadzor , Federal Service for Rights and Consumers
Centrosoyuz , Central Union of Consumer Societies
Potrebiteley , Consumers Union of Russia

Population in Figures

Total Population:

143,449,286

Urban Population:

74.9%

Rural Population:

25.1%

Density of Population:

9 Inhab./km²

Men (in %)

46.4%

Women (in %)

53.6%

Natural increase:

-0.43%

Medium Age:

37.0

Ethnic Origins:

Ethnic Russians represent 80.9% of the total population (of which 84.93% belong to European ethnic groups) while minorities make up 19% of the population. Among the largest minorities are the Tatars, Ukrainians, Bashkirs, Chuvash and Chechens, who account for about 8.4% of the total population. The remaining 10.6% of the population are either Indo-European, Turkish or Baltic-Finnic peoples. (Federal State Statistics Service)

Population of main cities

Source: Citypopulation.de, Latest available data.

Age of the Population

Source: World Bank, Latest data available.

Household Composition

Source: The United Nations Statistics Division, Latest data available.

Consumption Expenditure

Media in Which to Advertise

Television

Television is the main popular media in Russia (74% of the population), especially in the provinces, and is still the leading media in Russia in terms of ad revenue (40.7% of the market), but it is the least popular media among youngsters. There are a few channels with a nationwide outreach and a multitude of regional channels, Two of the three main federal channels are controlled by the government. Dozhd, the only independent TV channel, came under increasing pressure in 2014 because of its critical reporting on corruption and human right abuses.

Main Televisions
CTC (STS) - Commonwealth of TV Companies
NTV- Ch. 4
ORT- Russian Public TV
REN TV / NVS
Rossia- RTR (VGTRK) / Russian State TV & Radio
Russia 1
Russia Today

Press

Consumers can be reached all over the country, and specific populations can be targeted thanks to specialised publications. Bilingual publications in Moscow and St Petersburg can inform businessmen and foreign diplomats. There are more than 400 daily newspapers. The most popular ones support Kremlin policy. The consumption of printed media is decreasing, especially among the youngsters. Newspapers advertising spending represented 2.2% of the total market in 2015 (3.8% in magazines).

Main Newspapers
Moskovsky komsomolets
KP
Metro
Sovetskiy Sport
Arguments and Facts
Extra M

Mail

This market represented approximately 6% of advertising turnover. Like other sectors, it is in constant progress and has an estimated growth of more than 50% per year. Its main advantage lies in its relatively low cost as well as its countrywide impact on all income levels.

In Transportation Venues

Billboards are widespread, particularly in large cities and outskirts, along motorways and in the metro. Its impact is strong but very localised. The extensive use of the Moscow Metro makes this marketing option attractive. Outdoor and transport advertising expenditure represented 10.6% of the total market in 2015.

Market Leaders:
St Petersburg official website
Moscow Metro

Radio

Radio advertising is an interesting alternative to television; its cost is much lower and it has a relatively wide audience. There are hundreds of radio stations, around 40 in Moscow alone. Radio advertising expenditure represented 4.7% of the total market in 2015.

Main Radios
Russkoe Radio
Avto Radio
Nashe Radio - Moscow
Europa Plus
Dinamit FM
Radio Mayak
Hit FM 107.4
Shanson

Web

Advertising on the Internet is still comparatively uncommon, but it is growing fast. Turnover has doubled approximately every year and in the third quarter of 2017 Internet advertising has overtaken TV for the first time. Total Internet advertising revenue is set to reach USD 3.66 billion in 2020. Currently, it reaches the urban population (middle class and above), but its impact is increasing due to the growing number of Internet users (almost 110 million in 2017). While still less tightly controlled than tradicional media, the government is triying to restrict online freedoms.

Market Leaders:
Yandex
Begun - context-sensitive advertising

Main Advertising Agencies

News Outdoor, a subsidiary of NewsCorp (only available in Russian)
ADV Group

Main Principles of Advertising Regulations

Beverages/Alcohol

In accordance with the law of 13 March 2006, advertising for alcoholic drinks must mention the harmful nature of these products. The law sets out that it is prohibited to make drinking alcohol seem like an essential part of social life, as well as to target minors (especially by using them as actors in advertisements). Other regulations concern the places authorized for this sort of adverts (for example, they are prohibited in schools, on the front and back pages of newspapers, in cinemas, in public transport, etc.).

Cigarettes

The legislation on tobacco advertising is similar to alcohol, in compliance with article 23 of the aforementioned law. All forms of domestic and cross-border tobacco advertising, promotion and sponsorship are prohibited, with extremely limited exceptions. The law restricts, but does not prohibit, promotional features that may appear on tobacco product packaging. Internet tobacco product sales are allowed with some restrictions.

Pharmaceuticals/Drugs

It is prohibited to give concrete examples of people who are satisfied with a certain pharmaceutical product or medicine; to encourage people in good health to take a medicine (with the exception of preventive medicines); to question the need to consult a doctor; to emphasize the effectiveness of a product or the absence of side effects; and to conceal the pharmaceutical nature of a product. Some of these provisions also apply to medical services. Nevertheless, pharmaceutical companies are one of the major categories of advertisers in Russia. Medication advertisements occupy about 20% of all advertising time on TV and radio. Digital advertising is currently gaining popularity with pharmaceuticasl companies.

Other Rules

The Advertising Law is the most important piece of federal legislation for the advertising industry in Russia. As a general rule, advertising must be "bona fide and authentic". The law mentioned above contains particular provisions concerning the different means of communication and defines measures for the protection of minors. Online behavioural advertising is not regulated by the Advertising Law, but the Russian Constitution guarantees privacy of correspondence and other communications.
As the media war between Russia and the United States escalates, Russia has threatened to ban publicity on Google if it lowers RT or Sputnik's search rankings.

Use of Foreign Languages in Advertisement

The use of foreign words in an advertisement is prohibited if it risks changing the meaning of the information given.

Organizations Regulating Advertising

Federal AntiMonopoly Service (FAS)