Transcript Population

Russia —
A Market Overview
Country Overview
COUNTRY OVERVIEW
Geography

Largest Country by Area
– 17,098,242 sq km
– 1.8 times larger than U.S.
– Spans 9 time zones

Natural Resources and Land Use
– Vast natural resources including oil, natural gas, coal, strategic
minerals, rare earth elements and timber
– 7.17% of land is arable (43,460 sq km of land is irrigated [as of 2008[)
COUNTRY OVERVIEW
Population



9th Largest Country by Population
– Nigeria (8th) – Japan (10th)
– 138 million inhabitants
Median Age
– total: 38.7 years (36.9 years in U.S.)
– male: 35.5 years (35.6 years in U.S.)
– female: 41.9 years (38.2 years in U.S.)
Population Centers
– 12 cities over 1 million population
– European West: Moscow (11.5 million); St. Petersburg (4.8);
Yekaterinburg (1.4); Nizhniy Novgorod (1.3); Samara (1.2)
– Asian Central: Novosibirsk (1.4); Omsk (1.1); Krasnoyarsk (.9)
– Asian East: Vladivostok (.6); Irkutsk (.6); Khabarovsk (.6); Yakutsk (.2);
Yuzno-Sakhalinsk (.2)

Population Growth Rate
– -0.47% (Ranks 222nd out of 230)
COUNTRY OVERVIEW
Economy
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
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7th Largest Economy
– $2.223 trillion GDP
– Germany (6th), UK (8th)
Projected Growth (Source: IMF)
– 4.3% - 2011
– 4.1% - 2012
Unemployment Projections (Source: IMF)
– 7.3% - 2011
– 7.1% - 2012
GDP Per Capita (Source: CIA World Fact Book)
– $15,900 (2010 est.)
– Highest of BRIC Countries (Brazil, $10,800 – China, $7,600 – India, $3,500)
COUNTRY OVERVIEW
Economy

Positive Trends
– Per Capita Growth of 84% by 2015
– (Source: Business Monitor Int.)
– Affluent, urban population strong
base for consumer goods
– World Trade Organization Membership
• Fully Membership by 2012
• Lower Tariffs
– Average legally binding tariff ceiling
» 7.8% after WTO
» 10% currently (Source: WTO)
• Trade Policies Subject to Multinational Overview
COUNTRY OVERVIEW
Governance/Concerns

World Bank 2010 Ease of Doing Business Index
– Rank 123 of 183 (116 in 2009)
– China (79), Brazil (127), India (134)

Transparency International 2010 Corruption Perceptions Index
– Russia 154 of 178
– Brazil (69), China (78), India (87)
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Intellectual Property Protections
– Trade Mark and Domain Name Squatters
Music Instrument
Market Overview
MUSIC INSTRUMENT MARKET OVERVIEW
General Trends
HS Code “Chapter 92”
MUSIC INSTRUMENT MARKET OVERVIEW
Market Share and Growth
Statistics on Russian Imports of Musical Instruments (HS: 92)
2005
World
(U.S. Dollars)
United States
(U.S. Dollars)
World Change
y-o-y
U.S. Change
y-o-y
U.S. Market
Share
2006
2007
2008
2009
2010
16,898,800 34,714,356 54,938,751 86,483,893 56,874,771 74,919,822
803,059
1,249,425
1,113,735
1,542,657
1,266,855
2,081,268
3%
105%
58%
57%
-34%
32%
230%
56%
-11%
39%
-18%
64%
4.75%
3.60%
2.03%
1.78%
2.23%
2.78%
HS Code “Chapter 92”
MUSIC INSTRUMENT MARKET OVERVIEW
Year to Date August 2011
Russian Imports of Musical Instruments and Parts
Year-do-Date August 2011
Rank
1
2
3
4
5
6
7
8
9
10
Partner Country
China
U.S. Dollars % Share
2011
2011
% Change
2011/2010
28,723,672
52.81
13.12
Germany
6,795,720
12.49
116.77
Indonesia
6,632,735
12.20
97.78
Japan
3,419,894
6.29
41.12
Czech Republic
1,825,124
3.36
69.76
Taiwan
1,668,711
3.07
57.17
United States
1,380,204
2.54
14.50
Italy
1,273,687
2.34
71.08
Austria
663,437
1.22
259.92
Korea South
283,440
0.52
- 37.34
HS Code “Chapter 92”
MUSIC INSTRUMENT MARKET OVERVIEW
Parts
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Most robust growth
Substantial growth
in 2010
Significant growth in
Parts in 2010
Statistics on Russian Imports of Parts for Musical Instruments (HS: 9209)
Partner
Country
2005
2006
2007
2008
2009
2010
United States
212,294
333,078
605,703
657,320
832,231
1,119,501
Rest of World
1,363,718
2,108,795
3,397,243
4,182,794
3,528,402
5,644,189
World
1,576,012
2,441,873
4,002,946
4,840,114
4,360,633
6,763,690
HS Code “Chapter 92”
MUSIC INSTRUMENT MARKET OVERVIEW
Summary


Significant Growth
– Parts and Instruments
– Approaching and Possibly Surpassing Pre-Crisis Levels
– Quality Products Appreciated (Germany #2 importer)
U.S. Growth Diversifying
– Higher Percentage of Exports for Instruments
– Fast Growth in Non-Parts in 2010 & y-t-d 2011
Tariffs and
Certifications
TARIFFS AND CERTIFICATIONS
Summary
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
Value Added Tax - VAT
– 18% uniform rate
– 10% rate on certain foodstuffs, pharmaceuticals and children's
clothes
– Some products, e.g., certain financial services and medical
equipment, are exempt from VAT
Import Duties
– 5 – 30%
– Applied to CIF (Cost, Insurance + Freight)
Customs Union
– Kazakhstan and Belarus
– Duty Free Trade
TARIFFS AND CERTIFICATIONS
Select Import Duties

Pianos – 15%
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Stringed Instruments (guitars, violins) – 5%
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Wind Instruments (trumpets, clarinets) – 5%
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Percussion Instruments – 5%
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Electric Instruments (guitars, synthesizers) – 15%
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Parts for Musical Instruments - 5%
TARIFFS AND CERTIFICATIONS
Certifications

Certificate of Conformity
– Applies to Electronic Instruments and Equipment
– GOST R (former name)
– Local Certification Companies
Selling in the
Russian Market
SELLING IN THE RUSSIAN MARKET
Distribution Channels

Four Basic Channels
– Agents
– Distributors
– Representative/Branch Office
– Foreign Subsidiaries
SELLING IN THE RUSSIAN MARKET
Distribution Challenges

Territory
– Ensure Coverage of Russia’s Vast Territory

Customs
– Choose a Partner with Customs Experience

Logistics
– Many Underdeveloped Logistics Systems

Payment
– Uneven Access to Credit

Intellectual Property
– Take Responsibility
SELLING IN THE RUSSIAN MARKET
Major Distributors

Key distributors
– Mir Muziki (http://www.mirm.ru/)
– Muztorg (http://www.muztorg.ru/)
– Muzikalniy Arsenal (http://www.arsenalmusic.ru/)
– Asia Music Trade (http://www.asiamusic.ru/)
Commercial Service
Solutions
COMMERCIAL SERVICE SOLUTIONS
Counseling and Research
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
Counseling
– Goal to Increase U.S. Exports
– Provide Answers to Questions
– Find Local Resources
Research
– Market Research Reports
– Country Commercial Guide
• www.Export.gov
• http://export.gov/mrktresearch/index.asp
– Customized Research
COMMERCIAL SERVICE SOLUTIONS
Buyer Matchmaking
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

Gold Key Service
– Appointments (typically four per day) with prescreened Russian
firms
– Background and contact information on potential partners
– Customized market briefing with U.S. Commercial Service staff
– Available market research on the relevant industry sector
– Debriefing with U.S. Commercial staff to discuss results and plan
follow-up action
Preliminary Market Assessment
– Conducted Prior to Gold Key
– Determines Potential for your Product
Pricing
 Small/Medium Companies - $700 ($400 – preliminary)
 Large Company - $2,300 ($1,100)
COMMERCIAL SERVICE SOLUTIONS
Risk Assessment
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
International Company Profile (ICP)
– Determines Suitability of Overseas Partners
– Factual Report Containing:
• Management details
• Business activities
• Product/service lines
• Financial condition
• Credit-worthiness
• Trading experience
• Market coverage
• Business connections in the target country
Pricing
 Small/Medium Companies - $600
 Large Company - $900
COMMERCIAL SERVICE SOLUTIONS
Sales/Client Presentations

Single Company Promotion (SCP)
– Product Demonstration or Reception
– Private Location
– Assistance With Invitation List
– Delivery of Invitations
– Follow-up
– Catering and Location Assistance

Pricing
 Based on Time and Actual Costs
Contact us today.
Ken Walsh, Commercial Officer
[email protected]
+7-495-728-5369
Oksana Prokofieva, Commercial Specialist
[email protected]
+7-495-728-5405