Exporting to Russia
The structure of fashion distribution channels for exporting to Russia
(Source UBIFRANCE, Mission Economique Moscow Fashion Day May 2011)
For several years, the Russian market has been experiencing positive growth. This market is dominated by rapidly progressing imports; Russian production only represents 15% of market share.
Female ready-to-wear represents 65% of the clothing market in Russia. In 2009, the turnover for this segment was valued at 25 billion USD and showed a 5% progression. Between 2003 and 2008, the segment experienced an intense development phase with annual peaks in growth reaching 24%. 63% of turnover is generated in 11 large cities (27% in Moscow, 14% in Saint-Petersburg and 10% in Yekaterinburg)
Russia's three main suppliers are Italy, Germany and France.
Since the crisis of 2009, imports have declined. In 2010, a decrease of 14% year-on-year was recorded over the first 9 months of the year and represented 133 billion EUR. 2011 should see stimulated growth in imports.
Whilst making the most of the crises to spread their networks, particularly in the regions, Russian mono-brand chains are have been developing intensively over the last few years.
Other consequences of the crisis:
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The entry level segment has grown and now represents 40% of the market. Demand for average-level products (Zara/Mango/H&M...) represents 25%, 20% for high-end/premium products. This last category is the most dynamic due to an upturn in buying power and growing consumer interest in better quality products.
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Luxury items represent 15% of demand.
Download the UBIFRANCE study on the female ready-to-wear market in Russia
Method for recovering outstanding, or almost outstanding, balances for those exporting to Russia
In Russia, those who export generally try to manage their logistics by outsourcing it and transferring the risk to the importer (sale, export, IE Works, leaves factory) and by eliminating the risk involved with recovering outstanding, or almost outstanding, balances by requesting for an instalment of the order when placing an order and the balance prior to merchandise or sales items being dispatched.
Another possibility: sale from the factory with credit notes as a way of settling balances that are about to become payable.
If these ways of operating are not possible, we take excellent ideas for those who wish to export to Russia from Marianne Dickstein's excellent book (Practical guide to Debt Recovery in Belgium and abroad).
‘In the Russian Federation, trade disputes fall under the remit of arbitration courts that are a type of trade court, but have nothing in common with arbitration courts in terms of trade practice. Russian legislation does not contain any specific extra-judicial procedures for debt recovery.In compliance with the Russian Civil Code, the creditor can make a request for payment just after the end of the payment term, after which the debtor has to repay his debt'.
The simplified procedure of recovery or overdue debt recovery of outstanding balances is governed by the Russian Federation arbitration code but it is not obligatory before ordinary judicial proceedings begin. The creditor's request may be part of a simplified procedure if at least one of the following conditions is met:
a)
The creditor's rights are indisputable which requires supply chain management adapted to supply logistical documents that prove the validity, liquidity and enforceability of the outstanding balance.
b) The debtor acknowledges the creditor's payable amount which requires a logistics chain whereby transport documents are correctly initialled by the final Russian addressee'.
c) The amount of the request is low (460 Euros).'
In Russia, the legal requirement period is three years.