Russia – full of possibilities!

For the last few years the Russian economy has grown 5-10 % per year. Next – 2008 – year the expected growth is 6-7%. “This means that purchasing power is remarkably increasing and those companies that have not entered the Russian market, should do it now!” says Pirjo Karhu, the CEO of Konsu Group.

Contrary to some expectations the strong growth of Russian economy does not show any signs of slowing down. The well being is seen among ordinary people and new strong and big group – middle class – is forming in Russia. – These people that benefit from the high oil price and growing number of investments are beginning to trust on the future, Karhu says. – They take loans from the banks, travel abroad and buy cars, flats and other commodities.

Challenging bureaucracy

- Seminars and events on Russian business are often very popular, people want to get the latest information about Russia’s political and economical situation, says Karhu. - The decision to go to Russia needs a long time to mature – the negative image by the media does not make the decision easier. Newspapers seldom report the success stories.

It is true that there are certain risks in Russian business and that the business culture is very different from our Western culture. This is not however, the reason not to start activities there.  – If your business and strategy plans and management procedures are well done and the possible risks are taken into account, the market is very attractive and the possibilities to prosper are good, encourages Karhu.

Very many foreigners are afraid of the bureaucracy, crimes and corruptions. According to the Russian trade pioneer part of the fears are justified. – But if you start your business with right attitude and transparent operation mode, this kind of difficulties are quite easy to overcome. It is also wise to use partners for operations which seem to be too challenging to deal with in the beginning. There is always someone who will help you.

Can something be done for the high prices?

Hectic business environment and rapid growth have naturally dark sides, too. Costs have risen fast – especially concerning salaries, rents and communications – and the high price level in big cities like Moscow and St. Petersburg is slowing the flow of investments. Also the huge size of the market can sometimes seem too challenging to SME’s. – There are lots of new growth centres in Russia. Foreign companies focus too much on big cities like Moscow. For example in Kaluga, where Konsu has an office, too, there are very good circumstances and conditions for foreign companies.  The prices are more moderate and municipal authorities give different kinds of benefits to ease the entry, tells Karhu. 

Konsu has been in Russia for 15 years and it has a simple plan: to triple the turnover by year 2010. How can this be done and what is the advice for starters? - Russia really is full of possibilities. But your need to reach for them wisely and use your common sense and good, reliable partners!