On Christmas Eve discussion of the Russian citizen’s buying mood has continued to bulk large in Russian mass media. To perform analysis and illustrate the main ideas mass media involved results of various investigations which were not keeping well in step with one another, but each in its own fashion swimmingly recorded frame of mind and purse thickness of these or those social strata.
Investigations performed by Delloitte&Touche Company could be called to be the most featured ones. The Company analyzes buying mood in a number of European countries and U.S.A. and data derived by it are used by foreign media. However, magnitude of data in respect of Russia in December 2007 fixed the attention of a great number of Russian media. “The European Dragon Abuses – they are not able to comprehend our open soul”: a catchy caption from Kazan Vedomosti which is probably the best characteristic of extreme complacency with the results complimenting the Russian ambitions.
According to investigations by Delloitte&Touche Russians’ holiday spending equal to in average 13 % of annual income. And this is the greatest index among West-European countries and the USA – for instance this index in Great Britain is equal to 3.6 % and in the Netherlands it is 1.6 %. Unlike European countries, where the majority of respondents complain of their spending power reduction as compared to the previous year, this year in Russia only 11 % of people intended to spend for gifts less than last year. In so doing 33 % of Russians intended to increase their Christmas spending.
According to investigations by Delloitte&Touche the most desirable Christmas gifts for Russians are money and jewellery. A major part of respondents (around 28 %) dreamt to have just such gifts, however only 17 % were available to spring for such gifts.
Yet, as Profil magazine is stating, everybody by no means agrees with the fact that the Russians are as open-hearted as they are assumed to be by analysts of Delloitte&Touche. “I am bewildered by figures announced by my colleagues, - comments amount equal to EUR 330 Mr. Igor Eidman, Director of the All-Russian Center for Public Opinion Investigation in charge of communications. - Certainly, no one argues that Muscovites earn far more than other Russians, but according to our computations, only small number of people allocate over $ 200 for Christmas gifts, but the overwhelming majority spend less than $ 100 at all”. According to A. Kozhanov, associate professor of the Economic Sociology chair of St. Petersburg Humanitarian University, this year Russians in general were expected to increase their Christmas expenditure by 13 – 15 %. However, this not a quarter means that an equal share in this growth is contributed by both a dairy-woman from Krasnodar and top manager from Moscow. “According to our computations, inhabitants of Volga region, Eastern Siberia and Ural region will even reduce their Christmas outlay as compared to the last year” , - stated the expert. – Another case is that inhabitants of Moscow, St. Petersburg, Ural and Far East will sharply increase their expenditure. Finally this will lead to the same 13 – 15 % of the growth”. Experts note that data on Christmas spending by Russians derived by Deloitte neither reflect real-life situation similar to that when “average temperature of hospital patients means health of each patient”.
In support of experts who conducted the polling one should state that they have not allotted the task to compile a generalized picture of an average Russian consumer since they were interested in just inhabitants of Russian cities inhabited with millions of people. Obtained data are the result of the polling of 807 persons in Moscow, St. Petersburg, Novosibirsk, Nizhny Novgorod, Rostov-on-Don and Ekaterinburg.
“There is every indication of one more lucky season for retailers, - declared Alexander Dorofeev, a CIS partner of the Auditing Department of Delloitte&Touche. – Against the background of stable economic and political situation, as well as growth of income one third of Russians are available to increase their Christmas spending and merely just over ten per cent of adult population are going to cut their budget. In so doing almost all money allocated for the purpose will be spent during the last two weeks of December since the Russians are not ready to break the habit to do all at their last gasp. Therefore, present-buying scrums will take place for sure”.
According to Trud newspaper, our benevolence is proved by Radjesh Gundy, President of Choron Diamond, international jewellery company. He stated that only for Christmas jewellery Russians would spend around 2 billion US dollars. He admits this amount to be equal to 30 % of annual volume of sales. Mr. Sergei Dokuchaev, President of Russkiye Samotsvety jewellery company is stating: “We face ascent of demand for retail goods twice a year: in December when volume of sales increases 2.5 - 3 times and in March when this increase is half as much”. “For several recent years in Russia growth of interest to qualitative though more precious jewellery has been clearly traced. Therefore, we are expecting some reduction of sales in the mass segment and increase in the price average one”, - stating Mr. Gundy.
Vector Market Research, market research agency, on the Holiday Eve has arranged polling among Muscovites aimed at finding out what gifts they were going to present to their next of kin. In this poll jewellery ranked 5 with 9 %. According to the All-Russian Center for Public Opinion Investigation 6% of inhabitants of the country gave preference to jewelry as gifts. As a rule Christmas gifts (in 41 % of cases) are purchased at the last gasp before the Holiday. For respondents under 35 such behavior was more specific (49 - 51 %) than for those at the age of 35 - 59 years old (40 - 44 %) and all the more so for those over 60 (22 %). About 21 % of respondents were involved in selecting gifts in December. And virtually the same number of respondents( 19 % ) try to buy gifts in advance i.e. in the end of November - beginning of December; for the year the share of those who buy gifts in advance slightly reduced (by 4 %).
It’s curious that telephone inquiry of 1002 Kaliningrad inhabitants conducted by Strana Kaliningrad publication provided a figure virtually equal to that derived by the All-Russian Center for Public Opinion Investigation : 6.3 % of respondents intended to present jewellery to their next of kin.
It is evident that it is too early to summarize final Christmas trade data and try to correlate them with those of holiday sociology. Sellers note that the volume of Christmas sales annually increased by 20 %. Last year spending was nearly 20 billion US dollars and this means that this year it may reach 24 - 25 bln.
In the first half of January Russian mass media published only odd bits of information from the country’s regions.
Thus, according to Siberia Official Gazette dealers in precious gifts were disappointed with December sales. If before December proceeds was a half as much as an average monthly one, this time it increased only by 1.2 times according to a top manager of Yakutia Diamonds Novosibirsk store chain (four shops). He explains this fact by assaultive advertising campaigns by 585 and Adams federal chains which have drawn off a part of consumers. And this certainly means that a part of consumers have given preference to purchasing gifts at another market segment.
According to Nizny Novgorod’s Official Gazette jewelers of the city of Nizny Novgorod were satisfied with their sales. Thus, Moscow jewellery factory (five shops in Nizny Novgorod) in December increased its proceeds threefold as compared to November, stated Mr. Denis Adamsky, General Director of the Factory. Yakutia Gold Company (two shops in Nizny Novgorod) increased its proceeds twofold, stated Mrs. Olga Kabanova, the Company’s representative. As explained by her the Company’s average cheque (around RUR 80,000) had not changed and ornaments of gold were in great demand.
This year jewellery and small-sized household appliances were the most popular, states ITAR-TASS news agency. Russians are already in a position to gladden their next of kin not only with simple souvenirs, but also with useful and genuine things. On Christmas period many large retailers even switched to operate around-the-clock. However, it has been found out that the more customers are there in the selling area the lower seller’s margin will be. Reasons were explained to Business FM by Mr. Timofei Sorovtsev, an independent expert in the field of household appliances and electronic engineering: “This speculative demand again has played a low-down trick. High influx of customers did not allow an average cheque price to grow this year. And with account of materially increased expenditure related to advertising, rise of the level of salaries and wages to the staff I don’t think that the marginal income level will materially differ from that of the last year”.
People buy things which in a greater or lesser degree correspond to their proceeds and this is the thing which is forced up to them by mass consumption culture, - believes Igor Eidman, Director of the All-Russian Center for Public Opinion Investigation in charge of communications. He adds that stereotypes in respect to gifts generate distributive networks. The very same artificially create Christmas speculative demand and just this increases their proceeds.
A new generation of Russians easily and willingly conceive Western values, especially in cities numbering over million inhabitants. Therefore, in Russia in the course of time Western pragmatic attitude towards purchasing and presenting gifts will prevail, - believes Mrs. Galina Sartan from Katarsis Center Her opinion is shared by Alexander Dorofeev from Delloitte&Touche. In his opinion, in the course of time shops will simplify conditions and terms of sales. In conditions of growing competition this will be one of the competitive advantages. Russians will put up gifts for auction.
There also exist other ways to reduce the number of flotsam and jetsam presented for holiday. “Some of them are only starting to take roots in our country”, - states Mr. Dorofeev. He pins his hopes on a system of gift certificates since they will make possible to avoid purchasing of flotsam and jetsam in general. According to Delloitte&Touche data, currently 8 % of Russians are dreaming to obtain such gift certificates for Christmas.
