Russia offers consumer products companies the strongest opportunities for growth in Europe.
Consumer products companies are in the process of resetting their perspectives on Russia. Although 2010 was an "OK" year for businesses, Russia remains the most prosperous of the BRIC (Brazil, Russia, India and China) countries and is poised as the engine of growth for Europe.
Russia is a tough market but a good one and consumer products companies see the country as full of opportunity. There are several critical success factors for which companies must aim. Yet, it's a difficult market to explain to stakeholders.
Some companies are worried by the perceived unpredictability of government intervention. Additionally, human resource challenges remain. In 2010, businesses reported an "OK" year for consumer products.
However, Russian consumers are becoming more like their European neighbors. Businesses can expect the premium sector to grow in the coming years, yet it will be balanced by more affordable goods. Consumer products companies need to understand the middle class profile.
The Russian gross domestic product (GDP) is increasing and so is the national economy.
- Inflation is rising, but still remains low
- Bank credit grew in single digits in 2010 and consumer credit rose at the end of the year
- Oil price is strong, but the rouble is going through an unusual weak period
Mastering these and other challenges to growth in Russia is the key to success for consumer product companies.