Moscows economic might challenged by a host of up-and-coming cities (RU)

GfK GeoMarketing analyzed the retail situation of 39 Russian cities. Unsurprisingly, Moscow is the unrivalled leader. Much more newsworthy is the fact that it is closely followed by comparatively little-known cities such as Tyumen and Ufa.

Using the latest data and on-site studies, GfK GeoMarketing analyzed the economic conditions of Russia's 39 most important cities. Some of the resulting insights into Russia's retail climate are startling.

The Russian market still has some catching up to do with its Western European counterparts. Despite or partly even due to this fact, it offers enormous opportunities to expanding and enterprising companies and investors. These opportunities have this far usually been associated with the world-class metropolis of Moscow. There, such premier venues as the Triumph-Palace (Europe's tallest residential building), Crystal Island (upon completion, one of the largest buildings in the world in terms of floor space), the vast shopping centers of the Inter IKEA Group and numerous luxury malls are indicative of a Russia that views itself as an international trendsetter in culture, architecture and fashion. But now Russia's second- and third-tier cities have also attracted the attention of internationally active chains and investors.

Problematic for companies wishing to take advantage of this situation is the difficulty in accessing reliable data sources. Some attempts to expand into this dynamic market falter due to choosing a location with low customer frequency and/or potential. The Russian retail market thus poses certain risks, even amidst the enormous opportunities that undeniably exist. Without expert, on-the-ground knowledge of the country's retail locations, language and legal requirements, it's extremely difficult or even impossible to gauge the accuracy and reliability of existing sources of official and/or commercial data on market potential, infrastructure conditions and projects currently being implemented.

GfK GeoMarketing offers an up-to-date collection of market data on Russia's major cities. This information was compiled via on-site studies and own calculations from statistical data. The gathered information and validated data give companies and investors detailed information on the retail environment in Russia's 39 most promising cities.

Profile of Russia's retail climate
With 10 million and 4.5 million inhabitants respectively, Moscow and St. Petersburg are in a league of their own with respect to total consumer potential. Russia's enormous retail potential becomes apparent when one considers that the country boasts an additional nine cities with more than one million inhabitants. The potential for (international) retailers in these locations is especially high.

Moscow tops the GfK purchasing power per inhabitant rankings, followed by the much less familiar west Siberian city of Tyumen. Other cities with significantly above-average purchasing power indices are those heavily influenced by the oil industry or other major commercial sectors, such as Ufa, Krasnodar, St. Petersburg, Perm, Yekaterinburg and Tolyatti.

The high purchasing power index scores of these cities are indicative of the stark disparities in disposable income in Russia. The national average purchasing power is much lower than in these few urban locations. Due to the uneven economic development of Russia's industries and regions, the wealthier segments of the population have clustered together in relatively few areas.

In addition to the number of inhabitants and per capita purchasing power levels, the demand potential of the entire market region surrounding a city is another decisive factor for companies contemplating an expansion or investment opportunity. For example, it's insightful to rank these cities according to the total purchasing power of their surrounding regions.

While Moscow and St. Petersburg continue to dominate the top third of the rankings, Rostov-on-Don jumps to the eighth position. There is also some movement in cities ranked outside of the top ten. For

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