Doing business in Russia – not that bad after all
Russia is the best sales growth market in Europe and climbs on the international ranking of where you should do business in 2013.
While markets in Western Europe are flat, Russia retains good sales potential in the years to come. Not the worst place to invest if you are in the consumer sales or production business. Western companies sell on average 6-12 times more per capita in Russia than they do in China or India. In other words; Russia’s middle class have booming wallets and is Europe’s largest market with 142 million people.
It is the CEEMEA Business Group that has compiled a list of very good reasons to invest in Russia. Their report, made in association with Baker & McKenzie and Ernst & Young, is made to counter standard western media views that doing business in Russia is good for those who want to lose their money, or get killed by the mafia when visiting Moscow.
“More rubbish is written and spoken about Russia than any other country on planet earth,” the report reads.
Take a look at the following figures and imagine the years to come: Russia is the second-largest car market in Europe with 2,7 million cars sold in 2011, just behind Germany with 3,1 million. It is by far the largest mobile phone market in Europe with a saturation of 230 million phones compared with 100 million in Germany. Within the coming 10-12 years, Russia will be the largest consumer product market in Europe and it is one of the very few markets in the world where companies in some sectors can double the business in only five year.
Bank credits is another area where the Russian statistics shows a positive trend compared with other countries. While the Eurozone had a growth in bank lending of just 1-2 percent, the Russian market had a 40 percent growth in credits to consumers in late summer this year and a 20 percent growth to corporations, according to the CEEMEA report.
Wealth doubled in a year
Another report supports the trend. The Credit Suisse Wealth Report published earlier in October says the wealth of Russian households has doubled within a year, while the average in the rest of the world is a decline of 5 percent.
The wealth inequality in Russia is the highest in the world. Worldwide there is one billionaire for every $194 billion in household wealth; Russia has one billionaire for every $15 billion, the report from Credit Suisse reads.
Climbs on World Bank index
Today, the International Finance Corporation and the World Bank issued their annual report ranking business climate in 180 countries.
The report “Doing Business 2013” still has Russia way down the list, but the country has moved up eight positions, to 112th place from 120th place since last year.