Brands from Korea, Turkey and the UAE are coming to Russia
Analysts have calculated that since the beginning of 2023, 16 new foreign brands of consumer goods have appeared in Russia. This is not bad news, because after 2019, their number, on the contrary, decreased annually. However, shopping centers have not returned to the traffic numbers of pre-pandemic 2019, although they are trying with all their might to restore their business. Competitors — representatives of «live» shopping centers and e-commerce — discussed their position in the current conditions.
Patient — shopping center — more alive than dead. Recently, two main indicators have been growing in shopping centers – attendance (traffic) and average bill. According to the vice-president of the Union of Shopping Centers Pavel Lyulin, “shopping centers have more or less come to life, this year attendance is 11% more than last year (+3% in Russia).
– Our business had three successive shocks: Covid restrictions, a mass exodus of Western brands, then mobilization, – Lyulin said. – Yes, there was a drop in traffic during these periods, but now there is some recovery in traffic.
The return of the shopping center to life, as the expert explained, was influenced to a greater extent by the fact that many brands beloved by Russians did not leave, but remained on the Russian market with various tricks.
— In fact, 42% of Western brands first suspended their activities, looked around, and then “tricked their ears”: either sold to someone, the same Turks, Chinese, or arranged a transfer to a Russian company, – Lyulin explained. – They rebranded, changed the sign and name. And they stayed, selling the same goods. Or they have become multi-brand stores.
In addition, new brands are coming – both foreign and Russian.
— Therefore, we look at our reality with cautious optimism, – the businessman summarized.
According to the head of the new brands department at the Union of Shopping Centers, Natalia Kermedchieva, the key countries from where new brands come to us are – these are Korea, Türkiye and the UAE. In general, the coming and going of brands – the process is natural. Over the past ten years alone, at least 50 foreign brands have changed in Russia — someone came, someone left.
If we talk about e-commerce, then Russians who buy something on marketplaces see that they can still buy an item from any foreign brand there. According to the chairman of the Expert Council of the Center for Electronic Commerce, Yulianna Gordon, over the past year and a half, from marketplaces (according to various expert estimates) from 200 to 400 brands in different segments have left, however – “This is official information.” In fact, the products of these supposedly “gone brands” present on online trading platforms.
— Do you know that (such and such) a foreign film is currently showing in Russian cinemas? It’s the same with goods on marketplaces. How they got there is another question, – says Gordon. – And it’s not at all a fact that it’s counterfeit, it’s a real product!
Well-known electronic trading platforms have been making enormous efforts to globalize their activities over the past year and a half.
Therefore, there is no need to talk about any strong washout of individual brands from marketplaces. This affected some narrow segments, for example, certain categories of products for animals (tablets, dietary supplements).
In recent years, there has been a lot of talk about how marketplaces can completely replace “live trading,” but it turns out that it is too early to bury shopping centers. Experts have named a figure: only approximately 15% of the population in the Russian Federation buys goods online! For comparison, in the USA this figure is much higher – about 40%.
A representative of e-commerce said that now there is a trend all over the world – hybrid model of a shopping center with a marketplace. A marketplace is made on the basis of well-known shopping centers (which have their own name).
But offline business representative Pavel Lyulin argued with a competitor:
– This direction began to develop about five years ago, but many shopping centers abandoned it, since buyers must “come with their feet,” – he said. – If it is not needed as a location in this area, then why does it pay rent?
Over the past few years, shopping centers have been thinking about how to transform themselves in order to survive in the current conditions. As experts have admitted, there is no universal solution, but there are some options. For example, it is necessary to increase the share of areas “for entertainment and food.” Such work, in principle, has already been carried out in recent years. Now in some shopping centers 13-15% of the space is given over to catering. And part of the space devoted to clothing trade will inevitably decrease.
The most important factor – correct location. For example, one shopping center in Moscow has huge traffic – 80 thousand people a day, and all because it has the right location. Either a lot of people live nearby, or they pass through it to get to the metro, etc. Somewhere they came up with the idea of creating a hub of different marketplaces in a shopping center, so that people would come and try on clothes there, and then at the same time go to the shopping center stores, restaurants, cinemas… Another way to lure visitors – collaboration: we are talking about joint projects of social networks or TV channels with shopping centers – fan meetings, star performances, etc.
The average shopping cart of one well-known marketplace contains products from a variety of segments: contact lenses, shower gel, dog food and 20 more items. The average bill there is 1,700 rubles.
In shopping centers, the average bill is growing, now it is 6,000-6,500 rubles, however, according to the expert, “this is most likely due to inflation.”
In general, shopping center business representatives are optimistic.
— Just as cinemas did not kill theaters, online trading will not kill shopping centers, they will just become different, – said Pavel Lyulin. «Get out somewhere» – this is the main motivation of people, so offline shopping centers will never die.