Pi Attitude Zone: Flexibility

Russian Consumers And Western Brands

Russian consumers have ambivalent, inconsistent and fluctuating attitudes to Western branded goods.

After the fall of the Soviet Union, ushering in the Yeltsin era, Russians’ appetite for goods from the West, especially America, took off sharply.  Young Muscovites were suddenly avid for US-branded designer jeans, and the newly-opened McDonalds became the coolest (thought certainly not the cheapest) place to eat.  Big multinationals piled in to Moscow and other cities to offer their wares.

Then came the rouble crash and financial collapse of 1998, and weeping yuppies were to be seen hurling their imported cellphones against office-building walls.  Abruptly, Russian brands were seen as more cool, partly because they were more affordable, but partly because they were more, well, Russian.  A jeans brand called Yudashkin became an overnight sensation.

In the Putin era, the issue has become more complicated.  Putin himself now famously sounds off with anti-American and anti-Western invective.  This is largely to shore up his sagging domestic popularity, but the message evidently resonates with significant numbers of Russians.

Nonetheless, ten years ago the Top Ten TV advertiser list in Russia was already dominated by international names like Procter & Gamble, Nestlé, Unilever, Mars, l’Oréal, Henkel and Wrigley.  Even now, despite their president’s nationalist protestations and anti-Western rants, Russian consumers’ ten favorite brands include Western icons like Colgate, Lipton, Fairy and Domestos.

Now a new batch of international companies are shrugging off Putin’s “Yankee go home” diatribes, and are piling in to offer Russians new ways to add Western brands to their repertoire.  Apple launched there not long ago, and Amazon has now planted its flag alongside eBay’s on Russian soil.

The British retailer Marks & Spencer has built up a chain of 38 outlets in Russia. "There's a strong appetite for western brands [here]," says Jan Heere, M&S international director.

Market observers say that Russian consumers no longer necessarily evince the ostentatious "bling" culture that peaked after the collapse of communism.  Though image and prestige still play their part, Russians' brand choices these days seem to be more value-driven than before.

And international companies are keen to challenge domestic Russian brands in providing that kind of value.

Zone: Flexibility Country: Asia / Pacific Product – Consumer Products