If you wish to enter the Russian market and expand, sign a tenancy agreement with Ikea and set up shop in any of its 14 ‘Mega’ branded shopping centres. That’s the message Ikea Shopping Centres Russia, part of the Sweden-based Ikea Group, seeks to put across to international retailers keen to cash in on a consumer market with high potential and high purchasing power.
That potential is reflected in the statistics. Russia is Europe’s largest consumer market with an annual retail turnover of $690 billion in 2012 and an estimated $730 billion in 2013. The country has 15 cities with a population of over one million people and another 25 cities with a population of over 500,000.
So Ikea’s is a message international brands may want to seriously consider, given the fact that the Russian market is notoriously difficult to enter, with bureaucracy and local customs that are tough to navigate. Ikea SCR, which develops, owns and manages shopping centres throughout Russia, hopes to change this perception by offering easy passage via its Mega shopping centres.
“We offer a safe launch platform to foreign retailers looking to enter the country. Our shopping centres offer retailers international standards in a familiar environment, and we can give them initial advice on operating in the country,” says Armin Michaely, general director, Ikea SCR.
“Our experience and success in running shopping centres for our tenants is reflected in the exceptional 10% increase in tenant sales turnover in 2013, and 67% growth over the last five years. Our centres are located in Russia’s 11 largest cities, so retailers can quickly build a presence across the country in key regional cities as well as Moscow and St Petersburg,” he adds.