The following research report contains market research, analysis, statistics and business intelligence relating to research on Footwear Marketin Russia.

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ABSTRACT
During the year 2000 the purchasing power of Russian consumer increased 21 percent by some estimates. While this has had a positive impact on all areas of consumer markets in Russia, the footwear market has been among the greatest beneficiaries. This report outlines some of the most typical trends and describes recent developments in the footwear market in Russia. Information on upcoming international footwear industry trade shows is included. End .

1. Russian Government Survey. The Department of State Trade Inspection of the Russian Ministry of Economic Development and Trade recently conducted a survey of the Russian footwear market, the results of which were published in the Rossiyskaya Torgovlya (Russian Trade) newspaper in issue No. 5 of 2001.

The State Inspection held several quality control checks of imported and locally produced leather footwear, which revealed that the bulk of footwear in the Russian market was of very poor quality. From 60 to 84 percent of footwear examined was found not to meet minimum quality requirements. Most of such footwear was imported from China, Turkey, Taiwan and Syria, and typically bore bootlegged labels of well-known Italian names, or was labeled simply "Styled in Italy."The problem appeared worst in the regions. For example, in the Saratov region of central Russia 84 percent of imports failed inspection, and similarly in the Nizhny Novgorod, Bryansk, Belgorod regions, between 34 to 100 percent of footwear was considered substandard. Sadly, children's footwear was found to be of especially low quality, and China was the country of origin of the poorest examples.
Unsurprisingly, low cost drives the demand for low quality footwear. Equally unsurprisingly, about 75 percent of such footwear is sold in street markets and not in the stores, which have a higher quality standard. Street traders for the most part failed to produce a certificate of conformity for their product, which also failed to meet the necessary labeling requirements. In some cases footwear components are imported to Russia, and assembled in small workshops operating without a certificate, where counterfeit labels are attached.
2. Market Size and Growth Prospects. The Russian market comprises approximately 145 million consumers who, according to Mr. Zverev, Deputy Director of RLP Production and Trading Company, purchased around 200 million pairs of shoes in the year 2000.
The Institute of Microeconomy of the Russian Ministry of Economic Development and Trade, projects that 233 million pairs of shoes will be purchased in 2001, and there will be a steady 12-14 percent growth in demand for shoes annually in the 5-10 year term. Should Russia's recent economic growth rates be sustained, it is anticipated that better quality footwear will gain an increasingly larger share of this market.

3. Competition: Imported Footwear Versus Local Production. While locally produced footwear is considered to be affordable and of a fairly good quality, it cannot meet the current high demand, and accounts only for 30 to 50 percent of the total market (accurate statistics are not available since some of the locally produced footwear is sold as imported). However, little capital replacement has taken place in the sector with the consequence that approximately 70 percent of national footwear manufacturing facilities and equipment is worn out and requires modernization. At the same time, the number of new local footwear producers and brands is growing.
The largest Russian footwear manufacturers and distributors include Moscow Footwear Factory "Parizhskaya Kommuna", Joint Stock Company (JSC) Vostok, JSC Kalita, TJ Collection, Alba, Metropolis, Tervolina, Vigoros, Intercontact, Vilar-Pro and some others. Typical of such companies is Parizhskaya Kommuna, whose General Director, Mr. Nikitin, told the Vedomosti newspaper in a December 4, 2000 interview, that the firm together with its 12 subsidiaries produces 2.5 million pairs of shoes with a total value of around $45 million annually.
In the immediate aftermath of the 1998 economic crisis, Russian manufacturers became more competitive as the fall in the ruble made imports more expensive. With the return to economic growth throughout 1999 and 2000, imports started to grow rapidly, especially from Italy. Italy is the largest exporter of quality footwear to Russia. Mr. Antonio Brotini, President of A.N.C.I., told Obuv Sezona magazine that Russia has become the second largest (after Japan) importer of Italian shoes. According to Mr. Brotini, in the first five months of 2000, 2.35 million pairs of shoes were imported by Russia from Italy for a total value of $75 million. This is a 100 percent increase over the same period of previous year. In 2000, an average price for a pair of imported Italian shoes was $33, which represented a 15 percent increase over 1999.

4. International Trade Shows. Please see below the list of upcoming international trade shows in the footwear industry:

MosShoes Technology. MosLeather.
International Exhibition of Components and Equipment for Footwear and Tanning Industry. International Exhibition of Leather and Leather Goods
April 11-13, 2001
Location: Gostiny Dvor, Moscow
Organizer address: Office 417, Profsoyuznaya Str.
Moscow 117838
Phone: 7 (095) 124-6404, 124-7765
Fax: 7 (095) 125-6010
Email: mosshoes@orc.ru
http://www.mosshoes.com.

Obuv Mir Kozhi. (Footwear. The World of Leather.)
14th International Trade Show
Spring: May 28-31 and 15th International Trade Show
Fall: November 5-8, 2001
Location: Krasnaya Presnya Expocentr
Igor Sergeyevich Denisov, General Director
Phone: 7 (095) 255-3702
Fax: 7 (095) 205-6075
Email: centr@expocentr.ru
http://www.expocentr.ru
Or
Galina Vassilievna Gotsulyak, Director
Firm Inovystavka Phone: 7 (095) 255-3711
Fax: 7 (095) 205-6058
Email: inovist@expocentr.ru
http://www.expocentr.ru

In the fall of last year, 200 companies from 12 countries (89 - from Italy) exhibited in the Obuv.Mir Kozhi International Trade Show. While relatively small compared to international trade shows in western countries and the U.S., it is the largest and most important show in Russia.

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

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Published: 2006 August
Market: Womens
Region: Russia
Industry: Accessories
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