Any foreign expansion opportunity is ultimately a high-stakes investment. Thankfully, with a good understanding of their target markets, businesses don’t need to risk life or limb to export products or services. In this edition of Economic Powerhouses, we look at the explosive economic revolution that Russia is currently experiencing. Trade between Russia and the UK has a current value of £4.78bn and is steadily rising, making it the perfect moment to invest in the right sector without the gamble….
The Russian sectors firing on all cylinders:
- Energy Sector
Russia has the world’s largest amount of natural oil and gas and in 2013 10 million barrels of oil were produced each day. Being so rich in natural resources Russia is also a leading exporter of minerals, precious metals and timber.
- Construction Sector
It’s projected that £173bn will be spent to double the rate of road building as housing construction in the next 10 years grows from 58 to 90 million square meters. The construction industry as a whole has grown by 4.5%, making it a prime opportunity for UK businesses to invest in.
- Retail sector
The increase in the average income means that retail is booming and growing around 13% annually. Imports of consumer goods have risen by nearly 500% since 2000 and currently account for around 49% of consumer goods sold in Russia.
- Telecommunications and software industries
These emerging industries form part of the impressive Information Technology sector, estimated to be worth over £2 billion in 2010, with an average yearly growth of 30-40%. Even Google now has an office in Russia!
- UK Trade & Investment predict…
Other key sectors for business opportunities in Russia include advanced engineering, financial services, and sports and leisure.
Optimum opportunities in smaller cities
Moscow and St Petersburg are the two largest Russian cities in terms of population, and are key areas for business, particularly for overseas investors.
However, a study conducted by Forbes reported that certain lesser-known industrial areas are in fact better places to do business. Considering factors such as resources, infrastructure and administrative barriers, the report found Sochi, host of the 2014 Winter Olympics, to be the optimum area for business.
UK exporters to Russia can get research funding to meet potential customers
There is some great support available for UK exporters keen to do business with Russia, including research funding from UK Investment and Trade www.ukti.gov.uk
Things to consider when communicating with potential customers in Russia:
- Web users are 4x more likely to purchase from a website that communicates in their language
- Customers who buy online will pay more for a product if they can buy it in their own language
- Over 56% of consumers say that the ability to obtain information in their own language is more important than price
Expansion plans are often exciting but can also be daunting, especially as effective communication plays a major role in the success of market penetration. You may need to think about translating your website and print material, marketing materials and also technical and product-related content such as manuals.
If you have any questions about how to approach communication requirements for new markets or would like information on our Russian translation services, please contact a member of our team on + 44 (0) 1926 335 681 or email email@example.com.