Indian textile companies actively expanding presence in Russia
Ravi Navlani. Source: Personal archive
The history of the Surya Group began in 1963 in Dubai, when the Navlani family opened a small office that supplied apparel from India. By the end of the decade, the Surya Group had 10 retail shops. Having won over clients in the UAE, the company got into the international market, choosing Russia as the most promising market for developing business. In 2001, the group opened its first office in Moscow and now supplies fabrics to premium clothing brands in Russia
In 2013 Ravi Navlani, the head of Surya Group, was awarded a special prize for success in Russia in the Ernst & Young Entrepreneur of the Year international contest. He shares his insights with RIR.
In 2013 the retail trade turnover in the Russian clothes, shoes and accessories market exceeded $57 billion. How do you assess this figure? What forecasts can you make on the growth of the market for the coming year?
Russia is the best performing market in the CEEMEA (Central & Eastern Europe, Middle East and Africa) Region at the moment. Russia is three-four years behind the world in economic trends. Hence, the growth in the next coming years looks stable. More than 90 percent of textiles and apparel consumed in Russia are imported due to lack of development in the light industry.
In your opinion, how active are Indian companies in Russia? What are the advantages of the Indian producers and sellers of clothes?
Indian companies are actively expanding their presence in Russia. The Indian Business Community is limited but much focused. India and Russia have been strategic partners for decades. India's Light Industry is very well established from price and quality stand point in comparison to China and other countries exporting to Russia.
Source: Personal archive
What are the trends in the Russian clothes market at the current moment?
Russian consumers are very trendy and quality-conscious. Most of the global brands have experienced exponential growth since 2000 in Russia. E-commerce is the next big thing in Russia! The consumer is ready to pay the price for the latest brands, trends and service.
What are the peculiarities of the Russian clothes, shoes and accessories market compared to the markets of other countries?
In comparison to the BRIC countries, Russia is a very quality conscious market. The middle class continues to grow in Russia and the consumer's expectations are more focused on quality, brands, emotional value attached to the product. Unlike other markets, the price points are always the last concern in Russia.
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What difficulties in doing business in the garments sphere in Russia have you come across?
The bureaucracy in Russia is similar to India. Over all, it is pretty simple from the compliance standpoint. The system is pretty new in Russia since the market has existed for 20 years only but it has its own teething problems. Russia is gearing to be in line with the systems, transparency like any other country in Europe.
What sectors in Russia’s clothes market look the most promising for the moment?
Due to the baby boom in Russia, the children’s wear segment has been enjoying great
demand in the last decade. However, there is great potential in men's wear, ladies wear, corporate wear, industrial wear, corporate wear and sportswear.
What is the share of the Russian production and sale in the Russian clothes market?
After the fall of the Soviet Union, Russia has less than 20 percent of domestic production. Most of the supplies are import based and the volumes are expected to be growing in the near future.
Source: Personal archive
What are your company’s plans for the future?
We plan to expand our presence in the next three to five years with distribution and retail. In partnerships with global brands as Russia contributes to more than 50 percent of revenue in the Surya Group.
What advice would you give to the businessmen who set their mind on starting business in Russia?
Russia is a land of opportunities! I can feel a spiritual connection between Russia and India - It requires a lot of effort and attention to set up an organisation in Russia but it a market with a lot of potential and new opportunities at times. The State Government has been promoting Entrepreneurship by offering support and subsidies to the SME sector in Russia.
Organisations like The Entrepreneurs' Organisation, Young President's Organisation are also present in Russia to support entrepreneurs who are keen to learn and grow in an unexplored place like Russia.
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