Trends and challenges facing local exporters
Moscow-based companies are confidently increasing their foreign sales. The capital city is the country’s largest non-resource exporter, accounting for almost 17% of Russia’s total, according to data from the Mosprom Center for Export Support. Local companies sold USD 23 billion in non-resource exports in the first three quarters of 2021, with high-tech and high value-added goods making up a significant portion of that volume.
Moscow’s exporters sell a wide range of products with a high product complexity index: nuclear reactors, paper goods such as wallpaper, food products, and railroad equipment and parts. Sales of machinery, chemicals, construction materials, and food industry equipment are also accelerating.
“Sales are rising because local companies are smart about positioning their goods and working together to enter new markets and promote local brands,” says Alexander Prokhorov, head of Moscow’s department for investment and industrial policy. “We are seeing increased sales of modern lithium-ion batteries, industrial robots, and trendy ice cream products.”
Local exporters make the most of the capital city’s advantages: a highly qualified pool of talent and an extensive public transportation network. Moscow leads Russia with its universities and, according to World Bank data, has some of the best human capital in the world. McKinsey reports that Moscow is third among the top 25 large cities in terms of public transportation.
Prokhorov explains that in this environment, companies are able to build effective research centers and testing facilities and change or expand their range of products quickly in reaction to consumer demand. The result? Local manufacturers use groundbreaking technologies to offer consumers what they way and expand into new regions.
Selling in foreign markets requires a lot of up-front work, like branding and product/brand awareness. Participating in trade shows, forums, and industry ratings and publishing news in local media are all good ways to build brand awareness.
Logistics is another frequent barrier to foreign sales. Products need to be in local stores for consumers to buy them, but getting them there requires a whole series of complicated steps, including logistics and fulfillment.
Moscow-based companies have better access than their competitors in other regions and countries to assistance finding reliable local partners, networking, and participating in trade shows where they can show their goods to buyers and potential partners. The Mosprom Center for Export Support was established specifically to help with these items and more. Its experts analyze target markets and provide manufacturers with research to help them create effective export strategies. The Center also helps exporters find and negotiate with potential partners and participate in international trade shows and business missions.