Mr. Sergey Borovkov – Managing Director of Lighting Business Consulting in Russia, is proud to inform the Lighting industry about their latest ‘product’ – a new initiative to collect and gather market information on the Russian Federation market.
Why did you start this initiative?
LBC started this initiative since there was no reliable and regular comprehensive information about the lighting market in the Russian Federation available. The reasons:
- – The state does not gather, publish or analyze lighting statistics;
- – Lighting companies do not publish information about their activities in Russia;
- – There was no independent branch association to unite the key players and work on collecting and analyzing, reliable market indices
- – Some foreign market research companies are offering analyses of Russia’s lighting market based on widely available and superficial information that fails to reflect the actual state of affairs.
LBC launched a market pooling in cooperation with the biggest LED manufacturers’ association (RU LED) – which unites major LED luminaires and lamps producers on the Russian Federation.
What part of the market is covered now? How often will you publish updates?
The pooling project has been set-up for Professional Luminaries business. All major players on the Russian market – manufactures and importers, are taking part in it.
Pooling Participants represent the biggest part of locally produced luminaries market with a combined market share of 51,4 % in volume and 64,2 % in value.
The pooling information provides detailed information on the following parameters:
- – local production data
- – import and export data
- – split by application segments
- – split by technologies (traditional and LED)
Reports will be updated on quarterly and yearly basis.
The next full year report (2016) will furthermore be extended with more information, like:
- – key up-to- date list of all Russian professional luminaries’ manufacturers and their revenue data
- – key Lighting production locations in the RF
- – key market trends
- – company profiles of key players in the RF market
How can companies join this initiative? What is expected from them and what will be their benefits?
Any company which operates /plans to operate in the professional luminaries market of the RF can take part in the pooling. Every quarter, the company must fill in a special form with its sales data and send it to LBC. LBC process the data and publish the reports.
The benefit of the company is that it gets reliable and regular market information at a discounted price.
How can you guarantee the confidentiality and security of the information that has been provided?
The submitted information is shared based on a signed confidentiality agreement between LBC and the Company. And to minimize any potential leakage of sensitive data, the data processing is handled in such a way that incoming information from the companies is de-personalised by LBC and further data processing makes it impossible to track the sales data source.
How attractive is the RF Market for foreign Lighting companies?
The Russian Federation market is especially an attractive market in the mid- and long run. The GNI per capita has almost quadrupled since 1990. This trend will continue and, combined with the size of the market, this will offer good growth opportunities as alternative for stabilizing markets in Western Europe. For foreign quality brands, we see especially growth potential in some premium market segments like; Smart/Connected Lighting, Sports-, Architectural Outdoor and agricultural lighting. Next to these we remain to see potential in the high-end commercial projects, of course.
Investing in Russian production plants has never been more attractive due to the current attractive exchange rate of the Rubble, the low energy cost (0,06 Euro/kWh), the availability of cheap and well educated labour force and the ‘Made in Russia’ – 15% preference in government tenders. The Russian government has initiated programs to support the use of LED Lighting, by setting minimum LED share targets for lamps and fixtures purchased for state and municipal needs. These targets will increase rapidly to 75% in 2020 from the current 5 %.
Russia is a very good production alternative to China for the European market, as it is equally cheap at a shorter distance from Europe and therefore more sustainable and flexible. This also means less issues with mutual time zones for customers in Europe. Many Russian manufacturers are currently open for partnerships with Western Lighting Manufacturers as they see mutual benefits.
The Russian market is said to be quite difficult to enter (bureaucracy, trade embargos, etc.).
The Government is working on lowering bureaucracy barriers and there was done a lot in the past several years. Many of Russian regions have special regional body – investment agency – that helps foreign investors to deal with the bureaucracy. And that is working!
As to trade embargo, there are no restrictions on import of the lighting products.
Is there anything else that LBC do to support Lighting Companies in the Russian Federation?
LBC Management and our Partners have spent most of their careers working for international Lighting firms like Philips Lighting. LBC understand very well the requirements and concerns of foreign companies and know how to help them out with the local specifics.
We help foreign lighting companies to develop a successful marketing and/or sales strategy for Russia and/or help them finding interesting- and reliable business Partners in Russia that fit well with their targets and scope. We can also set-up and manage local trade or customer events and/or conduct specific market studies on request.
LBC is the first gateway to the Lighting Industry in the Russian Federation. Many thanks for your information and we do look forward to hearing from you in the future!
Albert Zomer, Management Consultant and Foreign Partner of LBC
For a free copy of the 2015 Market report please click here