Localization Just five years ago, the fashion market was dominated by international companies. Among the top 10 market leaders, the share of Russian companies was less than 30%. In shopping centers, 70-80% of retail space in the clothing/footwear category was occupied by international brands. Today, the picture is reversed – all top 10 players are Russian companies. Over 70% of retail space in shopping centers is occupied by Russian-created brands.
Retail Prices Continue to Rise The increase in clothing and footwear prices has been a steady trend since 2014. This is influenced by the dynamics of the ruble exchange rate and inflationary processes in the consumer market. In 2023, the trend continued – the average price increase in 2023 compared to 2022 ranged from 20-35%.
Growth of the budget segment In 2023 the lower segment accounted for ¾ of the market (74%). And its share continues to grow. Educated buyers accustomed to service and quality are moving into this segment in Russia, and brands are competing for these customers.
Competition in the Local Market has Increased Despite the Exit of International Companies Niche Projects Raise the Level of Competition The highly competitive Russian market is challenging for new international players due to the rapid growth of local medium and small chains and the trend of «consumer patriotism» among Russians, who are oriented towards supporting domestic producers.
Resale Boom The development of resale in the local market in 2023 was influenced by the overall price increase, a decline in purchasing power in the country, and the exit of foreign brands. Resale platforms have significantly increased their marketing budgets, aiming to boost the popularity of resale on social media through media personalities and influencers. The underlying idea is that «items with a history» are relevant, rational, and ethical.
Marketplaces are Growing Brands are creating special collections for marketplaces. The marketplace market has reached maturity, and extensive growth in the fashion segment is slowing down (the leader in growth is now the food segment). Two leading players, Ozon and Wildberries, occupy 86% of the marketplace market. The battle for customers is being fought through discounts offered by the marketplaces themselves, leading to overall price dumping in the market.