The Russian consumer electronics market includes personal computers, telephones, MP3 players, audio equipment, televisions, calculators, automotive audio/video and navigation systems, home security and automation products, products for playback and recording of video and audio media, and other products for entertainment and communications.
The consumer electronics market is the most developed and most competitive retail market in Russia. In recent years the market has grown 10% to 25% annually, depending on the product. According to Deutsche Bank’s expert evaluation, Russia’s household product market, including home appliances and consumer electronics, ranked the seventh largest in the world with over $25 billion in annual sales. The major portion of the consumer electronics market is occupied by products imported from Asia, Europe, and the United States. All major global brands are represented in Russia and have wide recognition. Local production is low and mostly represented by IT manufacturers and ODMs (Original Design Manufacturers) providing EMS (Electronics Manufacturing Services) for contract manufacturing of CRT, PDP, and LCD TVs, as well as DVD players under Sony, Panasonic, Akai and other well-known brands.
About 50% of consumer electronics sold in Russia is sold by the four largest retail chains which have hypermarkets and stores located in Moscow, St. Petersburg and other large cities. Another 25% is sold by regional trading chains, while the rest is sold by small retail companies and through the internet.
Accurate figures for the consumer electronics market in Russia are difficult to determine due to a large number of so-called “grey market” imported products on the market. However, with the growth of the largest retail chains, their market share will increase, with a corresponding decrease in “grey market” goods. According to the Russian Association of Trading Companies and Manufacturers of Consumer Electronics (RATEK), 100% of mobile phones, about 50% of notebook computers, nearly 80% of LCD and PDP TVs, and over 20% of photo and digital video cameras are legally imported into Russia, and their share is increasing. The U.S. consumer electronics share of the Russian market is mostly represented by IT products, high-end audio products, automotive audio and navigation products, home security and automation products, and mobile phones.
Audio/video equipment, automotive audio and navigation products, home security and automation products, multi-media, wireless and networking products.
Prior to the effect of the global economic crisis on the Russian market in late 2008, the Russian consumer electronics market was recognized as the fastest growing consumer electronics market in Europe. It will continue to be a significant international market for U.S. consumer electronics; however, analysts project a 15%to 30% drop in sales in 2009 over the previous year. A steep devaluation of the Russian ruble in late 2008 and early 2009 will also have a negative impact on Russia’s import-oriented consumer electronics market. Nevertheless, as most consumer electronics are imported and there continues to be a high demand for the latest and most technologically advanced products, there will still be opportunities for U.S. companies, particularly in high quality electronics gear and modern digital electronic products. High-end mobile phones, particularly the latest smart phones, are highly sought-after status symbols by Russian consumers. Automotive navigation products are increasing in use, particularly on Moscow’s spread-out and congested roadways. Quality, functionality and uniqueness are competitive advantages.