Russia'S Garment Industry Has Begun To Expand To Asia, But Its Advantage Is Uncertain.

It is reported that due to highly reliance on imports, the past few years

Great changes have taken place.

Some large enterprises in the industry continue to implement the long-term strategy of global expansion, but the focus has changed.

Western market political and economic market tension, Russian clothing brand began to turn to Asia.

It is understood that with the decline of ruble, imports of clothing, shoes and accessories are too expensive, instead of giving local producers more room for development, especially low price products.

Therefore, under the overall stagnation of the Russian clothing and footwear market, Russian domestic clothing brands adopted an anti crisis strategy to reduce product prices or pfer production equipment from China and Southeast Asian countries to Russia, because their domestic labor costs were greatly reduced.

The call of the Chinese market

China, Bangladesh, India, Pakistan, Sri Lanka and Vietnam are generally regarded as the global garment manufacturing centers.

But now these countries also form a fast developing consumer market, which provides great opportunities for foreign clothing brands.

According to PWC's PricewaterhouseCoopers survey, in 2018, Asians were in costumes and

Consumer spending is expected to reach US $920 billion.

Among them, the mainland market will account for about 1/3 of clothing demand, followed by Hongkong, Japan, South Korea, Indonesia, India and other Asian countries.

"No matter from a single national market or from the purchasing power of consumers, the Asian market is very diverse," said Timur Nigmatullin, a financial analyst at FINAM group.

"In Asia, China has the largest number of potential consumers in the Chinese market. Although the economic development is slowing down, the stability of the RMB value has led to an increase in consumer demand."

Expansion to Asia

In the past few years, some Russia

Chain stores have been opened in Asian countries.

Sportmaster, Russia's largest sporting goods retailer, began expanding to Asia a few years ago.

Sportmaster group announced the plan of "Asian expansion" in 2013, and Sergey Agibalov, group business manager, said the company is preparing to use China as a potential market because it is geographically close to Siberia and the Far East of Russia, and also because the company has started producing sportswear in Chinese factories.

During the 2014-2015 years, the sales volume of the Russian domestic market dropped sharply. Sportmaster group opened 12 Sportmaster brand chain stores in China and 19 O 'STIN brand chain stores (Sportmaster group's brand, the main middle end casual wear).

According to Sportmaster sources, China is the most attractive market in Asian countries.

"It is a large and rapidly developing market, and we must compete with global brands," he said.

In addition, compared with other Asian markets, entry to China is less hindered.

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"Sportmaster currently has dozens of retail outlets in China.

Obviously, their expansion strategy is very successful. In 5 years, the company's chain stores in China are larger than its own retail stores, "Nigmatullin said.

Russia's Carlo Pazolini group has been producing luxury high-end shoes and accessories since 1991, and now has pferred 70% of its manufacturing business from Europe to China.

There are stores in Beijing, and it is said that more retail outlets will be opened in China.

Focus on India Market

In January 2016, Vladimir Yevtushenkov, President of AFK Sistema, a Russian enterprise, said that the company's fashion retail assets Concept Group and India Tata group had established cooperative relations and sold "made in Russia" clothing through TataCliq platform, which was recently launched by Tata group.

According to AFK Sistema insiders, although the company is very interested in the Asian market, there is no very clear expansion strategy in retail.

The cooperation between Concept Group and India e-commerce platform is regarded as a pilot project, which will determine the further development strategy of the group.

In 2014, Sistema acquired a stake in Concept Group 40%.

Another Russian clothing brand SELA has successfully entered the India market.

The company passed the two largest

Amazon and Myntra cooperate to sell their brand clothes online.

"We are very interested in the Asian market.

India is a fast growing market attracting many retailers, just like China attracted many foreign companies ten years ago, "said Julia Zefirova, head of SELA corporate relations.

"T-shirts with Russian themes are very popular in India."

SELA does not distinguish the brand positioning in the Russian and India markets, although the brand adopts different pricing strategies in terms of pricing.

In Russia, SELA takes the middle and low price; in India, it chooses the price of mid end products.

Undetermined advantage

Timur Nigmatullin, a financial analyst at FINAM group, believes that the expansion of Russian brands to Asia is in line with the trend forecast of experts.

"In the near future, more Russia Company will enter the Asian market.

Their biggest advantage in these markets is their old partnership with local manufacturers, and the excellent way of doing business, "he added.

However, Fashion Consulting Group CEO Anna Lebsack-Kleimans does not believe that Russian clothing brands have great advantages in the Asian market.

"Russia's large clothing brands have manufacturing equipment in China and other Southeast Asian countries, which can help reduce logistics costs and sell products to Asian markets at lower prices," she said.

"But it did not make them more competitive than local brands, only to make them competitive."

Lebsack-Kleimans said most local brands in the Asian market have very loyal customers.

Russian brands can attract Asian consumers by providing superior designs, original "European style" or unique retail formats.

The Russian Street brand Gosha Rubchinsky is such a successful example.

The street clothing brand from Russia has successfully integrated high fashion design with Eastern European flavor street culture, bringing a lot of freshness to Street Fashion.