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Russian luxury market bouncing back, but some brands are lagging behind

Profile Photo By: Carsten Hennig
December 15, 2016

Russian luxury market bouncing back, but some brands are lagging behind

New York City – 15 December 2016
Despite a difficult trading year in 2015, luxury brands are staging a comeback in the Russian marketplace according to Luxury in Russia: the comeback a new report released by customer engagement specialists Contactlab and investment company Exane BNP Paribas. However, some brands appear to be better than others when it comes to adapting their offering to Russian consumers – for example only 4 brands are offering Russian language customer service.

The luxury market in Russia is now valued at €3.5 billion following a 5 percent growth in sales compared to the previous year, representing 1.4 percent of luxury sales worldwide. Given the fact that Russian luxury consumers spend on average 60 per cent more than their global counterparts, Contactlab has found surprisingly lax attempts to reach Russian consumers amongst leading luxury brands.

Contactlab’s team of specialists carried out analysis of 32 brands and ranked them across different metrics. The study highlighted the strength of Burberry, Louis Vuitton and Loro Piana in the key area of digital customer experience. These brands perform well when it comes to localized Russian websites, product selection and Russian language mobile apps, amongst other criteria. The report shows how, surprisingly, Dolce & Gabbana, Burberry and Swatch are the only international brands who engage Russian customers on social media platforms such as Twitter and VK.

Perhaps the largest area of potential growth for luxury brands in Russia is ecommerce. Ecommerce penetration in Russia (as a percentage of total retail sales) lags behind other international marketplaces – worldwide penetration in 2015 was 7 percent whilst in Russia it was only 2.5 percent. 19 brands offer Russian websites, but some brands such as Valentino, Hermés, Chanel, Prada and Zegna still rely on worldwide websites and neglect to tailor content for local consumers.

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