History of fashion market in Russia

Despite the fact that the world has become relatively “smaller” a result of globalization, with people and culture staying in closer contact, there are still large gaps to be bridged in order to achieve a full understanding of the cultural, historical and psychological features characterizing a civilization.

The emergence of the Russian fashion market is an incredible event. The Russian luxury goods market is rather young because Russian wealth is new. Today, there is practically no fashion brand in existence without a representative or a trading house in Russia. The list of foreign brands presented on the Russian market growing longer every year.

History of fashion market in Russia

The Soviet Era

Each period of time, within a given place, is characterized by a set of trends and fashions. They work like a mirror, reflecting the changeable, emotional and financial state of a nation. The former Soviet Union – a country submitted during a long period to a unifying ideology, and where access to international artistic developments was extremely limited – provides a us with a strong illustration of this phenomenon.

Many have commented that in the Soviet Union, fashion simply did not exist. However, rather than falling for such generalizations, we must take time to look more closely at the historical evidence. After all, when women are present, so is beauty. The attraction to fine things is natural, it seems that fashion will be present as long as women exist. But what shape did it take in the ex Soviet Union? Following the Perestroika (restructuring), information filtered out to the western world, and we are now able to analyse the period.

From a historical perspective, during the decades from 1918 where fashion was totally absent.

Only in 1959, the Soviet Union officially allowed fashion shows, and stopped the persecution of people in trendy clothes. That decision created a favourable atmosphere and allowed Madame Suzanne Lulling—who was the Head of the Dior Salon at the time—to organize a fashion show in Moscow. The show took place in the “Wings of the Soviets” House of Culture, decorated for the occasion with the colours of the French flag. There were 11,000 invitations for the show, sent only to the higher members of the Communist party and to the Soviet elite[1].

Source: Howard Sochurek—LIFE © Time Inc.

But unfortunately, this event was an exception, departing from the general policy of the time. Communist leaders preferred to demonstrate the talents of Soviet designers abroad, and continued preventing visitors from Europe from entering the country. The USSR continued to be closed to other countries’ influence.

The Soviet fashion presented at the International fashion show and the real Soviet fashion created for Russian people were radically different. In Moscow, an experimental group had been formed with the purpose of creating models exclusively intended for exhibitions overseas.

As Svetlana Smetanina of “Moscow News Weekly” described: “After the Dior fashion show, Pravda wrote daily that some of the styles were too open and short, and that “they would not look nice on women who are stout and of short stature.” It was evidently taken for granted that the majority of Soviet women were stout and not tall.

One of the Soviet magazines of those days described narrow skirts and spike-heeled shoes in the following way: “Bourgeois fashion makers come up with such styles that the woman has difficulty walking and must wrap herself around her man.”

Djurdja Bartlett, a fashion historian and researcher with the London College of Fashion, has a non-standard explanation for the Soviet system’s “strong aversion” to European fashion. According to him, “the shifting fashion trends unwittingly personified the times; it posed a threat to the system, which valued stability above all.”[2]

Later, the period between 1960 and 1980 (the Brezhnev period) was significant for the USSR. The economic situation in the country was called “the era of stagnation”, but in fashion, the era could almost be called progressive in comparison with the Stalinist years. The two decades were marked by the participation in various trade fairs and exhibitions, and the increasing presence of European firms in the USSR. Chanel was invited to present a collection at a number of commemorative events.  Goods and products from foreign manufacturers started to make an appearance on the Soviet market, and in Russia they were considered to belong to the category of luxury goods.

Information about European exhibitions and shows started to appear in Soviet fashion magazines. They abound with articles about fashion houses such as Chanel, Christian Dior, Nina Ricci, and Yves Saint Laurent, and included pictures of models from their most recent collections. Soviet fashion was changing dramatically, from being rigorously conservative, to being freer and more open. The most progressive republics at that time were the Soviet Baltic Republics. They were particularly sensitive to fashion trends and changes. These three republics also published their own fashion magazines and were trendsetters for the entire USSR. Fashionable women from all over the country wanted to go there for shopping.

We believe that above the information is very important for any body who try to understand the Russian purchase phenomena.

Analysing all these historical facts and events allows us to better grasp not only what constitutes the commercial market in Russia, but also understand the most important driving forces of purchasing power.

History allows us to see and feel a significant difference between the European and Russian cultures. In essence, the Russian people were excluded from the world of fashion for decades.

After the collapse of the Soviet Union, the economic situation changed dramatically. It is no longer a command economy; instead Russia is now an emerging market, namely, a normal developing upper-middle income economy[3].  Russian consumers have wanted to catch up on lost time and today we continue to observe this trend.

We can compare the Russian consumer behaviour with the example of a starving man who was not nourished for a long period of time, and then was offered an abundant table of food. How is this man likely to behave? It’s unlikely he will spend time picking and choosing what to eat.

But beyond that, people have experienced the harsh side of life. After enduring such events, it can be assumed that people are suffering from a certain form of psychological trauma.

Russian consumers today continue to represent the «over consuming» generation, especially with regards to their love of expensive luxury goods. The consumer confidence indicator is at one of the highest levels in the world, reaching 105 points (compared to 103 for the United States) in 2007[4].

Moscow today is a city in line with fashion capitals such as Paris, Milan, London and New York.  The new formed wealthy class is used to spending money and likes to show it. In the Russian luxury market, this special psychological attitude with regards to consumption is easily identifiable. From the beginning of the 90s, the open market offered opportunities for accumulating fortunes in a very short period of time, with the reverse also being true. The economic situation and the instability of the national currency added to the burden of history have not encouraged Russians to put money aside.

We are agree with Evelina Khromchenko, the editor-in-chief of the Russian edition of L’Officiel magazine, who gives great insight into the phenomenon: “You have to realise that the idea of ‘saving for a rainy day’ is frowned upon here. Russians believe that if you keep money for a rainy day, you’ll catch the rain. Instead, they think you should go out and buy a pair of Manolo Blahnics. Nobody allows a rainy day to happen to a girl in such shoes”[5].

If one compares the Russian luxury goods market with European one, it can be considered rather young. The very firth luxury shops were opened in Moscow in 1993.

In the past years, Russia’s model of economic growth has notably changed, with retail and luxury goods, among others, becoming key drivers of the country’s booming economy[6].

After the Soviet Union collapse, Russian consumers started spending increasing amounts of money. All sectors of the retail market have reaped the benefits from this, and have demonstrated fast development and growth.

Since 1997, Russia has achieved some economic progress. Inflation rates have been decreased, the rouble (national currency) has been relatively stable, and the ambitious privatization program has transferred thousands of enterprises to private ownership. The Government has awarded a lot of important to market-oriented laws. Since 1997, the Russian GDP has grown by an average of 7% a year. According to the Alexander Aginsky, on the Russian Internet blog: “In the same period, the dollar income per head has grown by nearly 29 per cent annually, faster than in China. This unparalleled growth in the population’s disposable incomes has created not only the famed billionaires and oligarchs, but also an emerging upper middle class that is clamouring for the finer things in life. The growing spending power, combined with the significant numbers of the very wealthy, has created a lucrative luxury export market sector for top quality products and services”[7].

We can consider that Russia has been one of the fastest developing markets in the world.

The world’s finest luxury suppliers from the fashion, automotive, accessories and real estate industries are largely present on the Russian market today and continue expanding their business in order to meet the growing demand. What does the Russian luxury goods market cover? We can include all the ranges of goods of superior quality and prices, such as cars and yachts, services, food and beverage, cosmetics, etc.

So…

Where we should go to make the shopping in Moscow/Saint-Petersbourg?

The majority of European brands having opened mono-brand stores are already present on the market. American brands have also started to develop on the European and Russian markets.

In the list of American brands successfully doing business in Russia can be found, amongst others, names such as Jimmy Choo, Manolo Blahnik, and DKNY.

Distribution of CFA luxury goods in Moscow

Structure of Sales-mix

  • Fall/Winter
  • Spring/ Summer

Major Trading Streets:

  • Kutuzovsky Prospect
  • Tretyakovsky Proezd
  • Stoleshnikov Pereulok
  • Petrovka Street
  • Kuznetsky Most Street

Malls:

  • Crocus City Mall
  • Vremena Goda
  • Barviha Luxury Village
  • Vesna
  • Ptrovsky Passage
  • Lotte Plaza

Department Stores:

  • TSUM
  • GUM

[2] Dior models in Moscow, July 1959. Photos by Howard Sochurek., http://behindthephoto.org/dior-models-in-moscow-july-1959-photos-by-howard-sochurek
[3] Guriev, Sergei, Zhuravskaya, Elaterina, Article “Why Russia is not South Korea”. Journal of International Affairs, Spring/Summer 2010, Vol.63, Issue 2.
[4] Dr. Nikolai Ostapenko, 8th Global Conference on Business & Economics
[5] Slavina Ekaterina, Swiss Business Hub Russia, Report Russia 2007,Russian Luxury Goods Market, http://www.osec.ch/sbhrussia.
[7] Aginsky, Alexander. The Luxury Goods Market in Russia, (October 3, 2008), retrivied from http://www.russiablog.org/2008/10/the_luxury_goods_market_in_rus.php

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