With a population 144 million strong, Russia remains key consumer market in Europe, and although it’s currently challenged by a turbulent economic environment and weak real income growth, there are still untapped opportunities for retailers and manufacturers to explore. To help our clients navigate the country’s shifting fast-moving consumer goods (FMCG) landscape, we recently hosted Nielsen’s fourth-annual CEO Breakfast in Moscow. Forty-one general managers from multinational corporations and local giants gathered to hear insights on the Russian and global markets directly from our leaders.
Alexander Kotsuba, General Manager, Nielsen Russia, opened the event by highlighting Nielsen’s unique capabilities in helping our clients understand their consumers and markets. Patrick Dodd, Nielsen President of Global Markets, then took the stage to share some insights on key shifts that are occuring in the global population, technology and infrastructure development, which are important factors shaping the business context for clients operating worldwide. For instance, urbanization and population trends has led to premiumization opportunities in Africa, while in Japan and across Europe, including Russia, we’re seeing a rise of an economically confident aging population, a trend that companies can capitalize on.
“The key takeaway from exploring the future business environment is clear—your customers are not going to be your customers tomorrow. And sources of growth that you see today will not be there to support you tomorrow,” said Pat. “That’s the reason why looking at big drivers of change and understanding their impact on each other, as well as the business context, is crucial.”
Konstantin Loktev, Director of Analytics and Consulting, Nielsen Russia, continued where Pat left off. He expanded on the transformations that will occur within Russia’s consumer and retailer markets within the coming five to 10 years that could open the door to new opportunities for retailers and manufacturers.
“We see three silver linings in the current economic situation in Russia. First, governmental investments in infrastructure development, as well as increased funding for public sector employees, will inspire more economic growth and consumption within the country. Second, the number of single households that, on average, consume more than larger families per capita is growing, opening new opportunities for retailers and manufacturers. Finally, Russia is big and diverse, and exploring the full potential of its regions can lead to stronger business performance,” Konstantin explained.
Closing out the event, Prashant Singh, E-commerce and Marketing Effectiveness Leader for Growth Markets, commented on the CAPE concept of approaching online growth in FMCG. CAPE stands for convenience, assortment, price and experience—four key components of e-commerce that retailers and manufacturers can use to navigate the shifting landscape in Russia and beyond. Prashant noted: “It’s hard to predict when the market will ‘boom’ in terms of online FMCG sales, although we know this is a hot question these days. What we observed in different countries is that ease of payment, accurate and quick delivery, and overall trust to the channel are the first thing to be fixed. Once they are in place, the pace of online growth accelerates greatly.”
Overall, the event provided our clients with new perspectives to enrich their business planning and embrace new market trends.