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Дата Date Подготовлено Prepared Consumption in Russia: Main Changes and trends in consumer behavior and mood of households COMCON TGI- Russia survey Maria Vorobyeva, Project manager, Syndicated and Media Research Department, COMCON

3 Macro environment analysis Social structure Economics Finance Culture Lifestyle Technology Media channels Consumer behavior Consumer markets Business Demography

4 Information sources TGI-Russia (Russian Target Troup Index) Global consumer market survey (60 countries) Russian sample – 28,000 respondents per year in 50 cities General universe – 62.5 mln. people (urban population in cities ) More than 400 consumer categories and more than 3,000 brands Data of Federal State Statistics Committee, MEDT of Russia, Central Bank and Branch Ministries of the Russian Federation.

5 TGI-Russia – single data source Lifestyle Goods and services consumption Social-demographic portrait Target marketing Communication Media

6 Economical crisis – 4Q 2008 – 1&2Q 2009 Economic recession High rate of inflation Decrease of industrial production Decrease Export and Import Stagnation of retail trading Level of living and financial services Lifestyle, technology and media Decrease of household income Conversion of savings into euro and USD Decrease of consumer crediting and increase indebtedness under credit Increase of banking savings Consumer markets Increase of unemployment and gain of working day Economy on services market: trips, eating out, sport Decrease of impulse buying Increase of new mass media – Internet and non-air TV Interest toward news and business mass media People put-off purchase HH appliances and clothes Decrease volume of consumption, switching to cheaper brands and discounters Stable situation on market hygienic goods and goods for house

7 The beginning of recapture – 2 half 2009 – 1 Q Slowly economical recapture Positive indicators of dynamics of gross national product Growth of volumes of export and import Decrease in rates of inflation Growth of retail trade Level of living and financial services Unemployment reduction Growth of a self- estimation of a financial status with 3 Q Growth of bank deposits in rubles Cautious returning of interest to credits Consumer markets Active development of technologies: faster Internet, increase portable personal computers Growth of consumption of a media content through the Internet Growth of popularity of cinemas – 3D films Recapture of Eating out and Sport services markets Economy in the tourism market: independent rest, popularity of Egypt Realization of the postponed purchases of the HH appliances Slow restoration of volumes of consumption of a foodstuff Preservation of importance of the price, parity between the price and perceived value of the goods Lifestyle, technology and media

Дата Date Подготовлено Prepared Demographic tendencies

9 Stable population rate (number) The number of constant population in Russian Federation is 141,9 mln. People in In 2009 Natural decline in population was lower in comparison with And the growth number of immigrants was compensated depopulation rate The number of population in RF (millions) Data of Federal State Statistics Committee Population decrease (to 1000 people)

10 Immigration from CIS countries Population decrease is balanced out by migrants from CIS countries. Mainly from Central Asia states (37%), Transcaucasus region (22%), Ukraine (17%), Kazakhstan (15%). Arrived into RF (ths. people) Leave from RF (ths. people) Data of Federal State Statistics Committee

11 Growth of birthrate In 2009 the number of newborns was extremely high – 1,75 млн. новорожденных. Growth of birthrate is correlated with baby boom in 80-s. And also occasioned by positive influence of Government program (to increase birthrate). Data of Federal State Statistics Committee

12 Age-specific structure of children Change of number of children on age, 2009 to 2002, % All (0-15 y.o.) 0-4 y.o. 5-9 y.o y.o. Distribution of children on age, 2009 to 2002, % 2002 year 2009 year -11% In age-specific structure of children the share of teenagers is decreasing. Because of numerous cohorts, born until 90-s have already past the spoon. And with the growth of birthrate the share of children under 4 years is increasing. (from 27% in 2002 to 36 % in 2009). Data of Federal State Statistics Committee

13 Ageing of population % Age structure of population The ageing of population is continued – Average age growth from 37,6 y.o. in 2003 to 38,7 in Expected age of life is about 62 y.o. for men and 74 y.o. for women. Data of Federal State Statistics Committee

Дата Date Подготовлено Prepared The level of life

15 Incomes In 2009 real salary have decreased on 3%, while real incomes of the population remained approximately at former level (+2%). In 2010 decrease of inflation rate will promote growth real population incomes * Real income = The income minus obligatory payments, divided by a consumer price index % to previous year Real income Real salary Data of Federal State Statistics Committee, The Ministry of Economic Development RF

16 Per capita income in cities Income per capita, RUR in month, 2 half 2009 Source: TGI-Russia, 2 half 2009 Base: All households

17 Rate of unemployment % to previous yaer % from economically active population Number or unemployment people, mln. In 2009 the rate of unemployment has grown to 8,6 % of economically active population that has made 6,3 million people In 2010 the good situation on a labor market and reduction of a rate of unemployment is predicted more, however returning to indicators of pre-crisis year it is not expected yet. Data of Federal State Statistics Committee, The Ministry of Economic Development RF

18 Self-estimation of financial status HIGH - Enough for everything except real estate and higher ABOVE AVERAGE - Enough money for h/h appliances AVERAGE - Enough for food and clothes but not for major h/h appliances BELOW AVERAGE - Enough money for food but not clothes LOW - Can hardly buy food With the beginning crises in 4 Q the financial position self-estimation began to fall sharply. The overcoming the crisis tendency became appreciable in 3 Q Source: TGI-Russia, 2 half 2009 Base: All households

19 Structure of HH expenses In 2009 in connection with crisis expenses on eating out have increased In the beginning of 2010 the shares of expenses on Utilities and Public transport have increased/ Among other expenses of households expenditure for the Internet have grown. And they make about 3 % of the general budget Source: TGI-Russia, Base: All households

Дата Date Подготовлено Prepared Tendencies on financial markets

21 Bank deposits From January 2009 till December 2009 The volume of bank deposits of physical persons has grown on 27 % In 2008 the share of deposits in rubles in total amount of deposits has decreased from 87 % to 73 %. In 2009 the parity of deposits in rubles and a foreign currency remains to the same Banks try to involve investors high interest rates and hope to use bank deposits of the population as a source of "long" money through stimulation of increase in terms of contributions Bank deposits in RUR, bln rubles Bank deposits in foreign currency, bln rubles Data of Federal State Statistics Committee, The Bank of Russia

22 Consumer lending Volume of loans, originated to physical persons in 2009, have decreased on 11% to 3573 bln. rubles In the beginning of 2009 was the growth (0,5%) number of given loans, And after that was decrease. The «bottom» of crisis was in April. Decrease continued during the whole 2009 year % to previous year Originated loans, bln. rubles. Data of Federal State Statistics Committee, The Bank of Russia

23 More deposits and less loans The share of users % Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people In 2009 the majority of people choose conservative financial behavior. The share of those who have bank deposit increased. And also increased the share of card holders. The number of loans receivers has fallen, and decreased in 2009 on 33% to second half of 2008

The share of usersIncrese for a year % users in target groupeIn % to 2008 year Men Women y.o y.o y.o y.o. 55+ y.o. Moscow St. Peterburg Other multi-million cities Cities 500 ths. – 1 mln. Cities 100 – 500 ths. Self-estimation of financial status above average Self-estimation of financial status average and less Deposits Значимо выше/ниже по сравнению с 2008 г. Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

25 Geography of financial services Have depositTook a loanHave bank plastic card Significantly High/Low in comparison with St. Petersburg North-West Center South Moscow 41 Ural Siberia Far East Privoljskiy Source: TGI-Russia, 2009 Base: 16+ y.o., cities 100+ ths people

Дата Date Подготовлено Prepared Internet

27 Use in the last 3 month Every, almost every day 1-3 times a week 1-3 times a month Less than 1 time a month The growth of number Internet users Significantly high/low in comparison with 4 Q Share of Internet users in the last 3 month Frequency of usage Source: TGI-Russia, Base: 10+ y.o., cities 100+ ths people

ths.-500 ths. 500 ths.- 1mln. 1 mln.+ Elder 45 y.o y.o y.o. Less than 20 y/o/ Profile of Internet users Cities Age Base: Internet users per 3 month, 10+ y.o. cities 100 ths.+ Source: TGI-Russia, Significantly high/low in comparison with previous period

29 Home On job WiMAX Wi-Fi GPRS, EDGE Broadband access, ADSL Dial-up Internet becomes more close and faster Places of usage, % Connection Type most often % Significantly high/low in comparison with previous period Base: Internet users per 3 month, 10+ y.o. cities 100 ths.+ Source: TGI-Russia,

30 Moscow Russia Development of Internet trading in Moscow Done web purchase, % Average expenses on web purchase per 3 month., Moscow11209 rubles Russia 8928 rubles Significantly high/low in comparison with previous period Base: Internet users per 3 month, 10+ y.o. cities 100 ths.+ Source: TGI-Russia,

Дата Date Подготовлено Prepared Life Style tendencies

32 Work 9-10 hours per day More than 11 hours per day Growth of unemployment and increase in duration of the working day y.o.8,2 8,38,28,38,28,38,5 8, y.o.8,6 8,58,6 8,48, y.o.8,5 8,6 8,58,68,58,6 8, y.o.8,38,28,5 8,38,28,48,5 8, y.o.7,77,87,97,88,07,98,07,8 8,0 55 y.o. and more8,2 8,38,28,38,28,38,58,1 Number of hours in weekday, % Work, % Average time weekday Significantly high/low in comparison with previous period Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

33 Have been in cinema 2-3 times per moth and more 1 time a month 3-4 times per half of year 1-2 times per half of year Growth of cinema popularity Have been within half year, % Frequency, % Significantly high/low in comparison with previous period Source: TGI-Russia, Base: 10+ y.o., cities 100+ ths people

34 Night clubs and museums Museums, gallery Night clubs, Disco Have been within half year, % Significantly high/low in comparison with previous period Source: TGI-Russia, Base: 10+ y.o., cities 100+ ths people

35 Coffee houses Fast food restaurants Pizza restaurants Sushi bars and restaurants Other restaurants Bars Recovery of eating out market Share of visitors in the last 3 month. Significantly high/low in comparison with previous period Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

Fast food restaurantsCoffee houses Men Women y.o y.o y.o y.o. 55+ y.o. Moscow St. Peterburg Other multi-million cities SEL High (10% of population) Above average (20%) Under average (30%) Low (40%) Profile of fast food visitors and coffee houses visitors Significantly high/low in comparison with previous period Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

37 Geography of eating out market Fast food restaurant Coffee house 2009 yearShare of visitors in the last 3 mon. Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people St. Petersburg North-West Center South Moscow Ural Siberia Far East Privoljskiy

38 Do some form of sport, 10+ Fitness club Trainers hall Other sport hall Growth fitness club visitors «I do some form of sports at least once a week», % Fitness club and training hall visiting, 16+ Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people Significantly high/low in comparison with previous period

Fitness clubTraining hallOther sport hall Men Women y.o y.o y.o y.o. 55+ y.o. Self-estimation of financial status above average Self-estimation of financial status average and less Profile of fitness club and training hall visitors 57 Significantly high/low in comparison with other groups Source: TGI-Russia, 2009 Base: 16+ y.o., cities 100+ ths people

40 Fitness club Training hall Other sport hall 2009 year Geography fitness club market Share of visitors in the last 3 mon. Source: TGI-Russia, 2009 Base: 16+ y.o., cities 100+ ths people St. Petersburg North-West Center South Moscow Ural Siberia Far East Privoljskiy

41 Less trips abroad Share of leaving abroad in the last 12 mon. % Number of travels, growth to previous year, % Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

42 Changes in direction of travels Left Russia in the last 12 mon. % Source: TGI-Russia, 2009 Base: left Russia, 16+ y.o., cities 100+ ths people

Share of usersNumber of trips % users in target group % decreases of numbers of travels to 2008 Men Women y.o y.o y.o y.o. 55+ y.o. Moscow St. Peterburg Other multi-million cities Cities 500 ths. – 1 mln. Cities 100 – 500 ths. Self-estimation of financial status above average Self-estimation of financial status average and less Trips abroad Source: TGI-Russia, 2009 Base: 16+ y.o., cities 100+ ths people Significantly high/low in comparison with previous period

Дата Date Подготовлено Prepared Food products

45 Economy on food products Food products Saved money Колбасы Meat Meat delicatessen Fish Fish delicatessen Cheese Juices Frozen convenience food Biscuits, marmalade %: of buyers for each category The most widespread model of economy concerning a foodstuff – to buy in smaller volume or is more rare. About 50 %-60 % of those who saved chose this model. Other model of economy - switching for cheaper marks is characteristic for categories where brands are strongly differentiated under the price, and characteristics of a product in the opinion of consumers are approximately similar. If brands are not differentiated under the price and there is no possibility to reduce consumption volume – that consumers addressed in discount store. Source: TGI-Russia, 2009 Base: 16+ y.o., cities 100+ ths people

46 Growth discount store popularity during crisis, Moscow Auchan Pyaterochka Billa Utkonos Purchased during a month, % Source: TGI-Russia, Base: 16+ y.o., cities 100+ ths people

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