Russian beauty brands look to export market to find new growth avenues

Russian beauty brands look to export market to find new growth avenues

Many Russian beauty brands are looking to export to international markets as they seek new sales avenues due to the stinted domestic market.

In a bid to boost growth amidst Russia’s shrinking GDP, local companies are looking to expand internationally to offset the ramifications of the devaluation of the Russian currency against the euro and the U.S. dollar.

Maxim Chereshnev, Chairman of the Russian trade and economy development council, told RBTH, “A lot has changed over the past two years, we can see that the domestic market in Russia has shrunk due to the situation in the economy, so businesses are increasingly trying to sell for export.”

Indeed, it is thought that due to this devaluation, products produced in Russia are significantly cheaper than their foreign counterparts.

Despite there being an investment cost for setting up abroad – thought to be around 300,000 euros – it is thought that this is recovered quicker than in Russia. Russian products are sold mainly in department stores in international markets.

Siberian beauty brand Natura Siberica launched into the international market some time ago, citing highs and lows. Alicia Zelenkova, Natura Siberica’s International Development Project Director, said, “On the one hand, it is of interest to consumers, on the other hand, they are afraid to make the first purchase as cosmetics from Siberia is a novelty for them.”

Likewise, while an international launch may spell success for some Russian beauty brands, it seems that spending on marketing is a must to put unknown brands on the map.

Zelenkova said, “In Russia we did not spend on advertising, as a matter of principle, but we had to change this approach abroad. In Denmark, for example, six months after the opening of the boutique, we finally decided to hire a PR agency.”