Luxury in Russia: The Comeback

15 December 2016

Contactlab and Exane BNP Paribas released the third report exploring luxury goods markets in new economies: Luxury in… Russia: The Comeback, following the previous June report Luxury in…Korea and February report Luxury in…India.

After the significant 2015 market slump (ca -25% vs 2014) due to Ruble strong devaluation, the Luxury market in Russia seems to recover in 2016 (up 5-10%) due to:

  • Continuous Russian clients shopping shift from abroad to domestic
  • Increase in tourist shopping given the favorable 10-20% price differential with Asian countries. New tax Free Bill should further promote tourist shopping in Russia


Russian clients shopping abroad is also recovering in 2016 (overall up 3%), with a significant positive trend starting in July and overall positive outlook for 2017.

Physical Russia

Almost totality of brands in the Panel (33 Brands analysed) have monobrand stores in Russia, while Balenciaga, Coach, Tory Burch and Ray-Ban rely on Multibrand networks

  • Premium brands Swatch (65 monobrand stores ) and Armani (47) standing out for their widespread presence
  • Most brands have stores in Moscow, St. Petersburg and Ekaterininburg; only Zegna and Premium brands Swatch/Armani/Hugo Boss in second tier cities; only Swatch present also in minor cities
  • Dolce&Gabbana, Valentino and Loro Piana with physical store presence higher than Mega-Brands Louis Vuitton and Prada

Most Panel brands with presence in Luxury Department Stores TSUM in Moscow, and DLT in St. Petersburg, half panel also with stores inside GUM Dept Store and in Bravikha Luxury Village (Moscow outskirts).

Even during the 2014/2015 economic crisis, many luxury brands continued to invest in the Russian market opening new locations.

Digital Russia

Ecommerce penetration in luxury goods still trailing in Russia, estimated at ca. 2-2.5% over retail sales for monobrands, less than the 6-7% WW average.

The lower Ecommerce penetration in Russia is probably due to the weak supply side more than to the demand side: in fact only 10 brands out of 33 ship online to Russia, while 19 have a significant presence on the Online store of TSUM Department Store.

Burberry overall leader on the Digital Competitive Map Russia, in particular for cross-channel services ( eg in-store availability, exchange in store) and personal services ( eg style advisory).

Dolce&Gabbana leading on the Strategic Reach axis, particularly advanced forlocalization on Socials and Ecommerce payments (Qiwi wallet)

Overall Russia digital localization potential already quite high…

  • 19 Brands out of 33 featuring dedicated Russian websites. Strangely Megabrands Gucci and Prada still relying on worldwide websites
  • Most Brands (30) with Russia country selection for Newsletters, 17 in Russian language

…but local content hardly found

  • Louis Vuitton and Swatch rare examples with local content on newsletters
  • Only Dolce&Gabbana and Burberry with International Social Media in Russian(Facebook and/or Twitter), no monobrand on Instagram in Russian, only Dolce&Gabbana and Swatch with official accounts on local social VK

Only Cartier, Burberry, Louis Vuitton, Tiffany and Zegna offer an effective Customer Service and Style Advisory in Russian via Email and phone.

Only Cartier, Armani and Dior offer the Book an Appointment option on websites.

Fendi digital strategy in Russia significantly accelerated in the second half of 2016: introduced website and newsletter in Russian, added in store availability on website, Ecommerce soon?

However many major brands still lagging in their digital strategy for Russia

  • Prada and Gucci still relying on worldwide websites
  • Hermès, Prada,Gucci and Chanel not offering a specific Customer Service to Russian clients
  • No Ecommerce yet for Louis Vuitton, Hermès, Prada, Gucci, Chanel and Cartier

Overall brand positioning in Russia

Armani with a strong presence both online and offline

  • Number three on the Digital Competitive Map Russia
  • Number two for Retail Presence in Russia, with 47 monobrand stores in 18 cities

Italian brands Ermenegildo Zegna, Dolce&Gabbana, Valentino and Loro Piana have strong roots in Russia and appear highly committed

  • Inside top 10 on the Digital Competitive Map Russia
  • Physical store presence higher than Mega-Brands Louis Vuitton and Prada
15 December 2016
Author Marco Pozzi Senior Advisor
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