THE CONFERENCE PROCEEDINGS - IFEAT

Table 6. General information about Russia, Kazakhstan and BelarusPopulation (est. 2012)Total 169,2 million% of population living in big cities(0,7-10 mn)Urban/rural population ratioLife-span (m/f, 2008)Average monthly wage USD 760Inflation rate (2011) 6.1%Russia Belarus Kazakhstan143 mn 9.5 mn 16.7 mn24% 19% 13%73.8 / 26.2% 74.3/25.7 % 56/44%61.8 / 74.2 64.7 / 75.6 68.4 (61 / 72)USD 210(USD 527 beforeMarch 2011)108.7% (9.9% in2010)USD 6007.4%Table 7. Gross domestic product, constant prices, % change 2Country 2000 2002 2004 2006 2008 2009 2010 2011* 2012*Russia 10.046 4.744 7.151 8.153 5.248 -7.800 4.000 4.286 4.083USA 4.139 1.814 3.468 2.658 -0.337 -3.486 3.030 1.527 1.782Euro area 3.777 0.916 2.172 3.206 0.409 -4.252 1.786 1.620 1.086* estimateThe Russian economy is heavily dependent on world prices of raw materials, especially oil. The lackof security and stability holds back private investment and long-term business projects.However, those who decided to take the risk and entered the market during the last 10 years did notlose. Between the two crises in 1998 and 2008, many consumer goods markets experienced 20-30%annual growth. This boom inspired positive public expectations and interest in luxury products.After the crisis in 2008, the food and cosmetics industries recovered relatively fast, but consumerpreferences shifted from the luxury segment (booming before 2009) to mass-market goods. A numberof customers turned their minds back to familiar brands and recipes, which were popular in late 1990s.Food products sold loose were again on the rise. In response to that, local producers of flavours andfragrances put premium items aside and invested their efforts in economy-class collections withtraditional aromas.On-line research done by Nielsen Russia in the 1 st quarter of 2010 showed that 15% of respondentsclaimed that they switched to the cheaper brands of consumer goods; and, as for food products andalcoholic beverages, this share amounted to 30% 3 .Today’s range of consumer and food products supplied by local producers is structured like this:Mass-market 80%. In order to compete with giants like Unilever, local producers go for the lowestprices possible. Quality here is not the first priority, and hence low quality cheap raw materials and262