Are you interested in doing business in Russia? Learn where the biggest and best opportunities in the Russian market are.

The idea of doing business in Russia can sound rather challenging for most people, but as you could learn from our previous newsletter, it is becoming significantly easier and more open for new investors since Russia eventually joined the WTO.

Despite the fact that the UK exports to Russia have grown by 80 per cent since 2010 making it Britain’s fastest-growing export market, according to the UKTI estimations there are still only about 600 British companies operating on the Russian market. It means that there are already some UK businesses represented in Russia (mostly the big names like BP, Shell and GSK), but the number of companies is not that impressive, especially if compared with Germany, which has ten times as many.

The advantage of doing business in Russia doesn’t only lie in unsaturation of the market. As Yaroslav Lissovolik, chief economist at Deutsche Bank Russia says, Russia’s economy is in a relatively good state. In comparison with most developed countries, it is exhibiting a pretty healthy GDP growth of about four per cent. The tax regime is favourable as well: there is a 13 per cent flat rate on income, while other taxes are competitive and have fallen in the past decade.

Following on from what is mentioned above, there is great scope for UK firms to operate more intensively in Russia. One of the most promising opportunities to start a new Russian career can be an idea of opening a beauty chain in one of the Russian cities. Some successful UK beauty brands like The Body Shop and Lush (as well as a French L’Occitane) are a must in every big Russian shopping mall or shopping street and their doors are always busy. The Russian market will hardly ever be saturated with beauty chains, because Russian women need to look their best 24/7 and are ready to spend on cosmetics much more generously than their central European counterparts. Nobody knows the real reason why Russian women put such a great deal of pride in their appearance and some people suggest looking for the answer in no other place other than the “mysterious Russian soul”. Stylist Natalya Tan said to Russia Beyond the Headlines that the Russian soul has always been shaped by luscious paintings and the shining domes of Orthodox churches. “Our art, our national costume and architecture build on the heritage of the Scythians, Mongols and Byzantines. This is the cultural code that identifies our taste and penetrates us from early childhood.”

Accessories and clothes department stores (consumer goods, retail and giftware) can be a success as well, because high street fashion is something today’s world lives with, particularly in Russia. Opening such a department store, you can follow viable UK brands like Accessorize, M&S, Debenhams and many others. British style promises to stay in vogue for times to come.

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Sectors: Business Services, Creative & Media, Food & Drink, Manufacturing, and Wholesale & Retail
Countries: Russia and United Kingdom
Topics: Business Development, Export Planning, and Getting Started
Export Action Plan