Consolidation is looming

In the next five years it will come to a comprehensive consolidation of the Russian DIY market. This prediction is from Rinat Mukhametvaleev. As chief executive officer of the Trest Group, which operates in the Yekaterinburg region, he has for some time now been making a name for himself as a recognised authority on the Russian market. At the industry’s Global Summit in Rome he presented an assessment of the current situation and his interpretation of the latest developments in his home country’s DIY scene. With the exception of 2009 the market has seen continuous growth in recent years by an average of ten per cent. The total volume of the DIY and housewares market for 2013 is expected to amount to RUB 890 bn, after RUB 770 bn last year. Growth is expected to continue into the future as well. Mukhametvaleev is convinced that, “In the next three years Russia will be the number three market in the world.” Among those calling the tune here is the building industry, which can point to stable rates of growth year after year. It produced a record in 2012, with the creation of 826 000 m² of new living space. Wages are rising as well, by some five per cent most recently; though there have at times been considerably higher wage increases. The demand for DIY store products remains high: 20 per cent of consumers – a figure that was still 18 per cent a year ago – are planning the purchase of products for renovations to their house or apartment. It is still a fact that the modern forms of DIY retailing are failing to reach one section of these consumers at all. For there are still a great number of so-called open markets, where DIYers and the owners of homes or dachas stock up on building and repair materials. The trend, however, is tending in another direction. “The market is shifting from man to woman categories,” observes Mukhametvaleev. The proportion of products from the “soft” DIY and garden ranges within the sector’s total sales is growing continuously. “Just three years ago the garden segment was still not making a profit,” reports Mukhametvaleev. Women have changed that by becoming important DIY store customers, as they are in western European countries, and boosting sales there: “Russian women like to go shopping.” That is just one aspect of the “dramatic change in consumer behaviour” that market analysts like Mukhamatvaleev are observing in Russia. Customers expect service of a high quality and very good online service. After all, the Russian online market…