Transcript Folie 1

Russia
PROMOTION CHRISTOPHE NAVARRE
HEC ULg
Charles de Pontevès – September 10th
AGENDA
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HISTORICAL MILESTONES
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RUSSIA TODAY
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Geography
Demographics
Social Mutation
Values Mutation
THE 5 KEY FACETS OF RUSSIAN LUXURY CONSUMERS
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Historical Milestones: Imperial Russia
1547 Ivan the Terrible – First “Tsar of all Russia”
-Conquered wide new territories
-Beginning of the Russian Empire
1703 Peter the Great modernizes Russia
- Opens Russia to European culture
- Founded Saint-Petersburg, which becomes the capital
- World’s 3rd largest empire, from Poland to Alaska
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Historical Milestones: Soviet Russia
Feb 1917 - 1921
1924 - 1953
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Historical Milestones: Soviet Russia
1953-64
1964-82
1985-91
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1991-2008, the difficult re-birth of Russia
2000-2008
1991-99
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But in 2008, the end of the “Russian miracle”
• March 2008 : Despite his excellent ratings, Vladimir Putin must step down as PM and
accepts to share power with Dmitry Medvedev (the Russian Constitution forbids three
consecutive terms).
• August 2008 : War with Georgia
• Nov-Dec 2008 : Commodity dependent Russian economy is severely hit by global crisis,
ending 10 years of rapid growth and consumers’ lavish spending.
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Putin-Medvedev:
Real tandem or underground competition?
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Russia Today
• The biggest country in the world (Russia is 70 times bigger than UK): 17 M km²
• 9 Time Zones (Moscow + 2 hours vs. Paris)
• 143 M Inhabitants (-2 M in 10 years), at least 12 M in Moscow (the only “growing” city)
Russian language and culture are strong unity factors in a multi-ethnic country.
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Russia Today - a large country with big Metropoles
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Moscow
11,800,992
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Saint Petersburg
4,900,520
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Novosibirsk
1,397,191
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Yekaterinburg
1,332,264
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Nizhny Novgorod
1,272,527
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Samara
1 164 900
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Kazan
1 143 600
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Omsk
1,129,120
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Chelyabinsk
1,093,699
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Rostov-on-Don
1,048,991
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Ufa
1,024,842
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Volgograd
1,021,200
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Perm
985,794
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Krasnoyarsk
947,801
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Voronezh
843,496
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Saratov
830,953
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Tolyatti
720,346
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Krasnodar
710,686
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Izhevsk
611,043
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Yaroslavl
606,336
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Russia Today : Imbalanced demographics
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Very low Birthrate
High Mortality
Ageing Society (seems to stabilize lately)
Strong movements from Rural to Urban population
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Russia Today : Economy
• GDP per Capita $16,000 (45% of France or UK)
• Stable Rouble (1€ = 40 RUR), 4% GDP growth, but high inflation (9%) and huge capital outflow
• After 1998 Crisis => return to growth but very relian on oil prices
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Russia Today
• New Growth levers needed…strong competencies and opportunities
• Good global level of general education
• Heritage of Soviet Union
• 13% of State Budget
• More then 50% of adult population with tertiary education (OECD average x 2)
• Literacy rate 99%
Photos d‘universites
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Russia Today
• From a “now society” to an “investment in the future” society
• New priorities:
• Philanthropic Projects
• Culture
• Education
• Real Estate
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Social mutation: emergence of the middle class
 A wealthier Russian society due to a continuous growth (except for 2009)
Growth rate
2000 + 10%,
2001 + 5%,
2002 + 4.7%,
2004 + 7.2%,
2005 + 6.4%,
2006 + 6.7%,
2007 + 8.1%,
2008 + 5.6%,
2009 - 7.9%,
2010 + 4%
(source: IMF)
The Putin and Medvedev years (2000s) saw
the return of growth and a feeling of stability.
Party on a McLaren Mercedes
yacht during the Millionaire Fair Russia 2010
 Hence the emergence of an urban middle class which is the most dynamic
within the Russian society
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Social mutation: emergence of the middle class
 The middle class represents ¾ of the population of the 15 most important cities in
Russia
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Social mutation: emergence of the middle class
 Upper Middle Class + Upper Class = a potential of 12 million people who are
younger, open-minded and western lifestyle oriented
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Values mutation:
emergence of new consumption aspirations
 An evolving system of values: from materialistic to human values
Recent data from the FOM Institute, the public opinion database, on Russians’
preferred values convey a clear return to so-called “bourgeois” values:
Family value preferred by 62% of respondents,
Love
(46%),
Friendship
(40%)
VS.
Money
Career
Work
(38%),
(28%),
(16%).
The successful
international Patek
Philippe campaign on
the theme of Father-toSon transmission
among wealthy Russian
males.
Under Yeltsin, Money was the social value.
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Values mutation:
emergence of new consumption aspirations
 An evolving system of values: from materialistic to human values
 An evolving system of values: from individualism to patriotism
Religious both stated and public is back
 President Medvedev, shown
accompanied by his wife at church; an
image which went round the world
Holy Russia Exhibition
in Paris
 Orthodox church-going is on the increase
in Russia
 The Holy Russia exhibition opened by
Medvedev in Paris.
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Values mutation:
emergence of new consumption aspirations
 An evolving system of values: from materialistic to human values
 An evolving system of values: from individualism to patriotism
A patriotic preference for Russian brands if the quality’s right
“Even if Russians are becoming patriotic again and prefer local
products, especially staples, if they’re poorer quality or don’t work as
well as foreign products, they’ll have no qualms at buying the import
if they can afford it” - GFG
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Values mutation:
emergence of new consumption aspirations
 An evolving system of values: from materialistic to human values
 An evolving system of values: from individualism to patriotism
 An evolving system of values: from social to cultural distinction
UNDERSTANDING RUSSIAN ATTRACTION TO ART AND CULTURE
• Cultural roots
• Deregulation in the consumption of works of art…
…. and liberalization of forms of expression
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Values mutation:
emergence of new consumption aspirations
This explain the emergence of news aspirations in luxury
consumption = the unique model is over
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Values mutation:
emergence of new consumption aspirations
This explain the emergence of news aspirations in luxury
consumption = the unique model is over
NOW
MULTIPLE LEVERS
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The 5 Key Facets of Russian Luxury Consumers
1. Lack of Aristocratic Heritage
As a result, the class has a desire for ennoblement, expressed in highly
elitist behaviors copied from countries where a real aristocracy does
exist:
• Belonging to members-only clubs, with very complex codes,
• International schools for the children,
• Purchasing certificates of nobility,
• Consumption of unique, bespoke products
• Consumption cultural goods (Art),
• Charity business.
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The 5 Key Facets of Russian Luxury Consumers
2. Patriotic Luxury
Expressed by:
• Re-launching brands of Russian origin, and valuing the latter,
• Launching specifically Russian models for imported brands,
• Using local celebs,
• Rekindling interest in your own country (trips in Russia).
Rolls Royce re-launches the
car of the last czar of
Russia, Czar Nicholas II, the
Silver Ghost at 5.5 millions
Euros.
The Raketa (rocket) brand of Russian
watches, re-launched in Russia. The watch
was created in honor of Yuri Gagarin (1st
cosmonaut in 1961). Originally, watches
for extreme conditions, today a line of
watches and accessories, to which Natalia
Vodianova will contribute.
Oleg Menchikov, theater
performer and Russian actor
elected most elegant actor of
his country, represents the
Longines watch in Russia. A
highly aspirational figure
embodying the Russian Man
with all the paradoxes of the
Russian soul (romantic and
harsh, serious and frivolous,
tragic and comic).
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The 5 Key Facets of Russian Luxury Consumers
3. Western Style Snobbery
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The 5 Key Facets of Russian Luxury Consumers
4. Defiance towards Luxury Goods
As a result, the brands that well-off consumers and upper middle classes love are
indeed those belonging to the stable of big prestige brands (Chanel, Gucci,
Dior,Hennessy,Rolex…).
New Brands entering the game has to prove before being adopted
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The 5 Key Facets of Russian Luxury Consumers
5. Looking for learning about Luxury
This would be conveyed by:
 Introductory courses (wine-tasting, perfumes)
 In-situ demonstrations (restaurants)
 Websites with tips and advice for consumers
 Discovery voyages to sites of production.
In TSUM, Dior created the Perfume
Ceremony for one week: defining the
archetypal perfume for its clients,
make-up sessions, shows, and
champagne
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Business in Russia
This Is Russia2.flv
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