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<h2><strong>The current situation on the Russian market for household goods opens up a number of opportunities for foreign manufacturers and suppliers</strong></h2><p><br>Over the past three years, the Russian home goods market has gone through several stages of transformation. First, the coronavirus pandemic led to customers moving online, then international sanctions only affected the segment that had begun to recover. At the same time, the period of fundamental transformation is an excellent chance for new participants to gain a foothold in the Russian market.</p><p>&nbsp;</p><h3><strong>Key indicators and forecasts</strong></h3><p><br>According to Big Time Retail estimates, the volume of the Russian household goods market at the end of 2022 amounted to about 300 billion rubles. Experts' forecasts for 2023 are somewhat different. Big Time Retail experts expect a drop in its capacity in monetary terms by about 10% (to 270 billion rubles) and by 20–25% in units. Specialists from the research agency M.A. Research expects a slight increase (up to 5%) in revenue by the end of 2023 and a continuation of the market decline in physical terms.</p><p>&nbsp;</p><p>The consensus of experts in assessing the decline in market volume in physical terms is explained by the departure of the largest retailers (IKEA) and brands (Zara Home, H&amp;M) and the lack of a suitable alternative. IKEA accounted for up to 20% of the Russian home goods market, so the cessation of work of this company in Russia affected the segment.</p><p>&nbsp;</p><p>Buyer activity is gradually recovering. According to Rosstat, already in the first quarter of 2023, consumption of non-food products increased by 4.7% compared to the end of 2022. The main driver of this process was household goods from the affordable and mid-price segments. Another important factor is the seasonality of demand for household goods, which grows in the spring (with the beginning of the summer season) and in the fall (with the beginning of the business season and the school year).</p><p>&nbsp;</p><p>Another trend in the Russian home goods market is the growth of online sales. At the end of 2022, the volume of online purchases (both on marketplaces and on store websites) increased by 200% compared to 2021. In addition to the general growth of the online shopping segment, the repurchase of goods from departed brands by marketplaces also played a role (for example, IKEA products are sold on the Yandex.Market). In general, online purchases account for 30% of the total volume of transactions in the non-food retail segment.</p><p>&nbsp;</p><p>It`s important to note the growing demand for household goods on marketplaces: for example, sales of these products on Ozon in the first quarter of 2023 alone almost doubled compared to the same period in 2022. The number of sellers of household goods on this site has also increased 2.5 times.</p><p>&nbsp;</p><figure class="table"><table><tbody><tr><td style="height:350px;padding:25px;text-align:center;width:700px;"><img src="https://cdn-ite.prismetic.com/1_6_1fb017afdd.webp" alt="1 (6).webp"></td><td style="height:350px;padding:25px;text-align:center;width:700px;"><img src="https://cdn-ite.prismetic.com/2_5_8853bd2ea8.webp" alt="2 (5).webp"></td></tr></tbody></table></figure><p>&nbsp;</p><p>However, offline stores are still in demand. This is fully relevant for household goods. In the online format, consumers are ready to buy products from familiar brands, while they prefer to make their first purchases from manufacturers they are still unfamiliar with offline, so that they have the opportunity to inspect and test the product.</p><p>&nbsp;</p><h3><strong>Growth points</strong></h3><p><br>Replacement for departed retailers. For the Russian buyer, IKEA has become more than just a store with household goods - it is a certain lifestyle. Therefore, various players are trying to fill the empty niche. For example, in April 2023, the first store of the Belarusian chain SwedHouse opened in Moscow, which presents household goods, textiles, and furniture in the same style as IKEA. Similar projects were launched by Turkish retailers Madame Coco and Karaca Home, as well as the Russian company Zebra Home. Stockmann and Lime are showing interest in this segment. However, in terms of their scale they do not yet reach IKEA.</p><p>&nbsp;</p><p>The departure of IKEA stimulated a number of experienced market players to reconsider the vector of development and develop new segments for themselves. For example, Askona is expanding its product line to include household goods. This summer, the possibility of Askona entering the former IKEA space was discussed. There are other examples: the former areas of the Zara Home chain are now occupied by KuchenLand Home stores, and Hoff, which has taken a leading position after the departure of IKEA, is actively developing its chain.</p><p>&nbsp;</p><p>New brands. The exit of Zara Home and H&amp;M Home has opened a window of opportunity for new manufacturers and suppliers of home furnishings. First of all, these are companies from Belarus, Turkey, textile suppliers from Central Asia. Russian consumers are ready to support with rubles companies that are ready to offer a quality product at a reasonable price.</p><p>&nbsp;</p><p>Further growth of online sales. Predictions about a decline in online sales after the end of the coronavirus pandemic did not come true: consumers fully appreciated the convenience of this method. According to AKIT experts, household goods rank second among the most popular on the Internet. It is likely that by the end of the year, online sales will account for up to a third of the total volume of purchases of household goods.</p><p>&nbsp;</p><h3><strong>Why you need to participate at MosHome</strong></h3><p><br>The dynamic transformation of the Russian home goods market opens up vast opportunities for new players. But in order to take advantage of them, you need to make yourself known, increase brand awareness, and find new partners. An excellent chance to solve these problems is participation in the International Exhibition of Consumer Goods for House, Garden, Sports and Leisure MosHome.</p><p>&nbsp;</p><p>This year, 5,051 people attended the exhibition, as well as 16,121 cross-visitors from the MosBuild exhibition. 65% of visitors (3,293 people) represented Moscow and the Moscow region - regions with the greatest demand for household goods. Almost half of the visitors (2,504 people) represented retail and wholesale trade.</p><p>&nbsp;</p><figure class="table"><table><tbody><tr><td style="height:350px;padding:25px;text-align:center;width:700px;"><img src="https://cdn-ite.prismetic.com/MH_23_IMG_0700i_6231fd29f8.webp" alt="MH23_IMG_0700i.webp"></td><td style="height:350px;padding:25px;text-align:center;width:700px;"><img src="https://cdn-ite.prismetic.com/MH_23_IMG_1665i_cf88f2fcc7.webp" alt="MH23_IMG_1665i.webp"></td></tr></tbody></table></figure><p>&nbsp;</p><p>Another value of participating in the MosHome exhibition is the opportunity to agree on cooperation and conclude new contracts. 43% of visitors hold senior positions in their companies (from the CEO/owner to the head of a line/department), 66% planned to make a purchase as a result of visiting the exhibition, and 64% were looking for new suppliers at the exhibition.</p><p>&nbsp;</p><p>You can demonstrate your household goods to potential clients and find new partners at the International Exhibition of Consumer Goods for House, Garden, Sports and Leisure MosHome, which will take place from May 13 to May 16, 2024 (Moscow, Crocus Expo IEC).</p>

The current situation on the Russian market for household goods opens up a number of opportunities for foreign manufacturers and suppliers

Russian household goods market:trends and prospects