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Russian DIY market building a fantastic future


Globally, DIY is a fiercely competitive market – especially in Western Europe. Russia, as ever, tends to see things a little differently. The average Russian spends over ten times less per year on do-it-yourself products than the average German.
Despite this, pre-conceived notions of a small, struggling sector should be put to bed. Russia’s DIY market is one of the largest in the world. And, while it may be smaller than some European nations’, there is still healthy activity in the sector as the home improvement industry experiences a 15-year high.
Russian retail information agency InfoLine reported in 2013 that Russia was home to the world’s sixth largest DIY market. 
Retail sales of DIY equipment and home improvement supplies totals $17.3 billion, according to a report by the Moscow Times. This figure features sales of a whole host of products including tools, paints, wall coverings and other home improvement essentials.
Despite some critics sensing a decline in the Russian DIY market, others aren’t so pessimistic. Ralf Rahmede, head of the European Federation of DIY Manufacturers, believes the industry has the potential for significant growth in the next decade.
“I think the Russian market has the yearly potential for double digit growth for the next 10 to 15 years, which means it will reach a level of around €100 spending per capita per year for DIY activities,” Mr Rahmede told WorldBuild365 in April 2016. Current DIY spending per capita in Russia stands at around €24. 
Mr Rahmede is matched in his enthusiams by Alexei Fedorov, one of Russia B2B power tool retail chain 220 Volt’s Managing Partners. Mr Fedorov told Russian news site Retail.ru that many DIY retailers are seeing their sales numbers rise.
Part of this increase, according to Mr Fedorov, is due to a growing number of Russians taking vacations at home. Playing into this is recent legislature preventing members of Russia’s civil service from vacationing overseas. Instead of heading abroad, many DIY enthusiasts have spent their summer holidays refurbishing apartments or decorating country cottages – all activities that require an abundance of DIY products. 
Price consciousness is very much a trend affecting the market in a positive fashion. The average basket value amongst DIY retailers stood at 7,500 roubles in 2015, which was a minor increase over 2014’s previous total of 7,000 roubles. A taste for lesser known brands, whose products work just as well as those from larger manufacturers, implies that Russian consumers are buying cheaper DIY products in larger volumes. As such, sales figures have increased.
Changing consumer habits are at the forefront of a shakeup in how Russians buy DIY goods. A growing proliferation of hypermarkets has led to an industry-wide move away from traditional open air markets. Now, consumers prefer to shop for their goods in services in large “big box” stores, which reflect supermarkets in their layout and the multitude of products on sale.
Indeed, the presence of hypermarkets has offered further options for shoppers. A number of Russia’s leading supermarket chains, including Auchan and Lenta, carry their own extensive ranges of DIY goods at affordable prices. 
Major DIY specialists have had to respond in order to keep their dominant market share. Chains such as Castorama and OBI have strategically opened stores in the immediate proximity to hypermarkets. This mirrors similar practices in nations, such as the United Kingdom, with well-established home improvement industries where warehouse-like stores are located close to supermarkets.
While an optimistic outlook can be taken, that is not to say the market isn’t without its fair share of challenges. One aspect affecting the market’s growth is Russia’s sheer size. A wide ranging network of DIY logistics suppliers means much of the necessary distribution activity is the responsibility of individual companies (with the exception of Russia’s leading chains). 
The number of available stores also inhibits growth, but as demand for DIY products increases, so too will the number of specialist retailers. A strong, integrated logistics network is something the industry will need to invest heavily in. 
But the key message here is that Russia’s DIY market is robust and will remain so. “I think the DIY market, both in big box format and in online activities will have a fantastic future for the coming decades,” Mr Rahmede enthused in a WorldBuild365 interview. And, as consumer confidence grows, so too will Russia’s home improvement industry. 


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Tanya Aleksankina

International Sales Manager - Interiors sectors


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