Window into the Russian POP market

2016-01-21 –

Consumer activity drives retail

High oil prices in the 2000s fuelled rapid growth in consumer activity and retail development in Russia. Shopping centres sprang up; small local retail chains were displaced by larger retailers. Interest in world-famous brands began to rise dramatically, with consumers using prestigious brands to project their social status. In Russia’s larger cities, for example, the iPhone has become a very popular way for young people to express their ambition.

Russia has a very uneven distribution of income. The highest earners reside in Moscow and St. Petersburg, followed by major regional cities such as Ekaterinburg, Kazan and Novosibirsk. Incomes in medium and small cities are much lower, so consumer and retail trends appear less marked with increasing distance from the Russian capital. Even within large cities there are significant differences in income. This is clearly reflected in the retail landscape, with a distinct division between premium and economy retailers.

The largest economy food retailer is Magnit, a chain of more than 10,000 stores that has added over 400 new stores in the second quarter of 2015 alone. Around 80% of its estate consists of neighbourhood minimarkets. Despite its impressive size, Magnit is no national chain; its reach only extends as far east as Novosibirsk.

While POP displays are a rarity for economy food retailers, they are a common sight in premium supermarkets like Perekryostok and Azbuka Vkusa – both firmly aimed at high-income shoppers. The latter chain only operates in Moscow and St. Petersburg, and often features branded displays for alcohol and confectionery brands.

The same premium-economy divide exists in cosmetics and perfumery, with Magnit-Cosmetics stores operating in the low price segment. L'Etoile and Rive Gauche are among the premium retailers, along with regional chains such as the popular Zolotoye Yabloko (Golden Apple).

Russian POP trends


  • The concentration of money and global brand offices in Moscow means that most POP suppliers are based in the capital (and some in St. Petersburg).
  • Low-budget POP producers offering plastic or cheap metal-plastic combinations are situated far from Moscow.
  • Russian POP producers mainly serve domestic demand, but there are exceptions. POP imports are estimated to be some 30% of the market.
  • Some POP suppliers are full service providers; others are highly specialized in certain markets, such as HoReCa, or categories, such as home appliances, electronics or luxury brands. Most brand owners prefer integrated suppliers but may still use niche suppliers for special projects.


  • Brands are moving away from ordering complex POP involving different materials and towards lower-cost, single-material solutions.
  • Corrugated POP is a growing segment in a far from saturated market. Large corrugated installations are becoming increasingly popular.
  • POP order quantities are trending downwards; smaller runs tailored to specific store chains are now more popular than mass market POP solutions.
  • The growth in shopping malls in major cities has increased demand for shop-in-shops, brand zones and promotional areas for luxury cosmetics, alcohol and fashion brands.
  • Household appliance brands also have a great interest in creating brand zones, although some retailers like MediaMarkt impose severe restrictions on large branded displays.
  • Interactive technology in POP displays is undoubtedly growing, but is still far from the level seen in Europe.


  • High cost of retail space for floor POP has increased competition for shelf space; spend on shelf systems is growing fast for luxury as well as mass market brands.
  • The largest POP spend in Russia comes from food brands; followed by perfumery, cosmetics and alcohol.
  • Alcohol sales have been strongly impacted by advertising bans, so the point of sale has become the new battleground for winning over consumers.
  • In the past two years, serious restrictions on tobacco advertising and consumer presentation has virtually eliminated any demand for POP.
  • The toy market is beginning to flourish; brands such as LEGO, Mattel, Hasbro and Disney are starting to invest more significantly in POP.

The POP markets in Europe and Russia have a lot in common; Europe may lead, but Russia is only a small step behind. The economic climate has had the same impact on Russian POP as it has elsewhere, fuelling demand for lower-cost and corrugated displays. Now, more than ever, brand owners around the world want the same thing: the most efficient POP solutions to promote their brands in retail.