The rise of the Russian super-rich and the openness of the Russian market to foreign companies has created one of the biggest luxury markets in the world. By 2009, the country is predicted to account for 7 per cent of global luxury goods turnover, which would make it the fastest-growing emerging market.
Since it unlocked its economic borders, Russia has experienced an unbelievable flow of products into the country. Anyone visiting Moscow today would be impressed with the variety of luxury boutiques and exclusive stores. Worldwide brands are paying thousands of dollars for access to the Russian consumer.
Today's Russians are so spoiled by choice that companies are wondering how they can get the Russian consumer to choose them over other brands. To the disappointment of many companies, Russians are no longer ready to buy the first expensive product flashed at them.
Over the past 15 years, Russian consumers have turned into a sophisticated and well-travelled clientele, who are well versed in the world of brands. So, to win them over, brands have to go that extra mile.
Russia today is an extremely individualistic society. After 70 years of conformity, Russian consumers are looking for ways to express their individuality, which is apparent in the way they dress, the cars they drive, or the jewellery they buy. Maybe that's why Russia's super-rich want exclusive products no-one else has.
The Russian passion for brands is a well-known phenomenon. Brands are a prestige symbol. But the luxury goods market has become saturated with names such as Chanel, Louis Vuitton and Gucci, as well as other lesser known, exclusive niche brands having to compete for the same consumer. The secret is in developing customer loyalty. Advertising in national publications is vital to promoting the brand image, but a closer relationship with consumers is often the critical factor.
Paying extra attention to Russian consumers is the way to achieving a competitive advantage. Customer relationships can include anything from flying to see their clients anywhere in the world to organising a private view of new collections. The way to attract the consumer is to offer a unique extra service.
A significant development in the Russian luxury market has been the expansion of the luxury services industry: exclusive holidays, state-of-the-art super-expensive health clubs and spas and concierge companies which can get you anything, anywhere and anytime. Russians will pay for being treated like "royalty".
Today's super-rich Russians are global travellers and consumers. Luxury brand retailers are as likely to get Russian clients through their Moscow boutique's doors as they are to see them in Bond Street.
Elena Ragozhina is the publisher and editor of New Style, a London-based Russian lifestyle magazine.