SPOTLIGHT ON RUSSIA
and Indian markets. The transnational operator AmRest (whose brands include Pizza Hut, Applebee’s, Burger King, Starbucks and La Tagliatella) is opening many new facilities in 2013.
The company YUM! Restaurants International Russia & CIS recently disclosed its current trading performance, plus its expansion plans. Over the past two years, comparable sales of YUM! brands in Russia and the Commonwealth of Independent States grew by 60 per cent. By comparison, the total revenue of YUM! brands in 2012 grew by only 8 per cent. Out of all the countries in which YUM! trades, Russia experienced the highest growth. It plans, by 2015, to open 460 restaurants in Russia and increase revenue up to $1billion a year. YUM! is not the only one. The chain of Irish- themed licensed premises, Harat’s Pub (Russian operator with headquarters in Irkutsk), operates in 12 Russian cities, and contracts have been signed with partners in another four. A Centre of Regional Franchising is being established in Bashkiria, which will promote local brands in other regions of the country.
Emerging sector: Retail In 2012, 30 foreign brands came to Russia, 11 from the clothing and shoe sector. Last year, the second-tier retailers followed the major players. Managing director of the consulting company Esper Group, Daria Yadernaya, explains: “First, the major companies – H&M, Zara and others – were spending money on researching the Russian market, then tested it and smoothed out the bumps, and now it is stable and is not so scary, more information is known about it and it is more transparent. It is possible to take the fi rst steps, which could be smaller or more cautious.” Among the newcomers to the
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Franchising in Russia. Facts and fi gures (source, EMTG Analytic, 2011 and 2012)
Franchisors: 607 Corporate units: Franchise units
Total employed staff in franchising Local Franchisors Foreign franchisors
National franchise concepts abroad
market, notes Ms Yadernaya, are the brands Scotch & Soda, Mohito, Takko Fashion, OVS and the affordable line of the Michael Kors brand (Michael by Michael Kors). British department store Debenhams has decided to try its luck again, having entered the Russian market before in 2006.
Moscow and St Petersburg remain major destinations for the launch of new international brands in this market. Many brands, however, have begun to consider smaller cities as well. Analysts at Magazin Magazinov provide the example of the brand Mango, which is considering cities with a population of no more
12,998 22,014
283,443 66% 34% 15
than 100,000 people for new openings. In the next few years, the Russian retail sector expects to see more foreign players enter. According to property consultants Knight Frank, 15 new international brands, in different sectors of the consumer market, have announced their desire to expand into Russia in 2014. Seven of them sell clothing: Bimba & Lola, Jack Wolfskin, Eurelia, Collezioni Fashion, Ferre (the second line of Gianfranco Ferre), Nissa, and Pink Woman. Three chains of accessory stores are planned to open: Meli Melo Paris, Funky Fish, Stella’s Accessories, as well as the footwear chain Humanic. n
The Russian franchise market is an opportunity well worth exploring by UK franchisors with ambitious international growth plans. If you would like more information on franchising in Russia or the Russian franchise exhibition, BUYBRAND, please contact Tracy Shah, Director, Venture Marketing Group on 020 8394 5262.
BUYBRAND is a Russian Information and Analytic web-portal dedicated to franchising). The company is part of Venture Marketing Group’s International Partners Programme and will be working with VMG to promote and develop international franchising.
www.buybrand.ru
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