• GDP nominal: 1,860 billion USD
  • Unemployment rate: 5.1%
  • Population: 143 million
  • Ease-of-doing-business rank: 51th

Russia has a high-income mixed economy with state ownership in strategic areas of the economy. Russia has an abundance of oil, natural gas and precious metals, which make up a major share of Russia's exports. As of 2012 the oil-and-gas sector accounted for 16% of the GDP, 52% of federal budget revenue and over 70% of total exports.

The Russian ruble collapsed by 24% from October 2013 to October 2014 entering the level where the central bank may need to intervene to strengthen the currency. The Russian economy risked going into recession from early 2014, mainly as a result of the falling oil prices.

The 2014 GDP growth remained positive at 0.6%. In 2015, the Russian economy shrunk by 3.7% and is expected to shrink further in 2016. However, the World Bank and the IMF estimate that Russia's economy will begin to recover by 2017.


Direct Selling in Russia

  • GDP Growth Constant Local Currency 2014: 0.6%
  • YoY Industry Growth Constant USD 2014: 0.3%

The Russian Direct Selling market accounts for 45% of the Central and Eastern European region in terms of revenue and half of the distributors in this zone are Russian. Russia is similar in terms of revenue to the UK (3.6B USD 2014) but has 10 times the amount of distributors.

The devaluation of the Russian ruble had 3 impacts on the Russian Direct Selling industry:

First of all, the price of imported goods and raw materials (a large part of Direct Selling companies have manufacturing capabilities in Russia) increased and major U.S. and EU companies raised their prices, resulting in a drop of transaction volume.

Second of all, products made in Russia sold in the same monetary zone became more competitive comparatively to imported goods, therefore devaluation had, to some extent, benefited to local companies.

Finally, although Russia’s unemployment rate is only half of that of the Eurozone, unemployment has increased in Russia during the recent period, added to that the higher inflation due to the rise of the price of imported goods, real wages of Russians has decreased. People needing to supplement their income has led to a net increase of the number of distributors in Russia (7.6% YoY) to 5.4 million distributors (2014).

Multi-level marketing is the predominant form of Direct Sales in Russia and 90% of distributors are female, therefore logically the market share of the Cosmetics and Skin care categories is high at 60%. This category however is suffering from the competition of traditional retail, but Direct Selling remains competitive in rural and agricultural areas where the traditional retail channel is still under developed.

Sources: ASENSHIA, World Bank, WFDSA, Euromonitor, Wikipedia

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