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Distributor research

Search for distributors in the Russian Federation and CIS countries

russia

Since Russia has 9 time zones, many economic players tend to approach the Russian market on a regional basis. Most of the companies start from working with distributors situated in Moscow or Saint Petersburg, then they shift to other regions through their main distributors or seraching new ones.
 
Moscow and Saint Petersburg are the most populated cities and have the biggest density of shopping malls, so many companies have placed their headquarters or representative offices here.
 
Moreover, we have taken note of companies which have achieved success starting the business in far from these cities, e.g. woodworking in the north-west, energy projects in west Siberia and in Sakhalin, and continuated expanding in other regions. The main distribution channels are concentrated in the west of Russia, especially in Moskow and in smaller part in Saint Petersburg, but nowdays new channels are rapidly developing in the south and the east, too: the Volgia Federal District, the Urals and the Far Eastern Federal District. To succed in Russia, a company should carefully choose its targets and the channels of distribution.
 

The companies, which wish to approach the Russian market successfully, can basically take five different roads:

  • Agents working in tight connection with the company itself on economic basis;
  • Importers/Distributors
  • Local branches
  • Foundation of an interprise according to the local law
  • Establishment of a sales&development office
 
The job of the sales agent, as it is meant in Italy, doesn't virtually exist in the Russian world: the legislation sets it up as an employee or a partner receiving a wage and refunds for business trips. This kind of salesman can be found in the organizational chart of the huge Russian distribution companies, working in the regions. 

The most common entrance strategy is selecting the importers/distributors, then establish a commercial link with one or some of them (depending on the product or the brand). The contract of exclusive right on the sales is often the sine qua non to start a business in Russia. 

A usual mistake made by Italian companies embarking on the Russian market is to use as tems for comparison the European or the American market, where it is common to cooperate with many different importers or distributors. The Russian market of high or very high quality products is concentrated in Moscow: it is from here that the sales spread to the regions. So, two distributors of the same brand (expect 4-5 cases in the food industry) can't coexist because they compete against each other; therefore almost no distributor is available to take on a brand that is already present on the territory.

In each product category (such as food, clothing industry, cosmetics, electronics etc.) the manufactuers/suppliers can choose among an increasing number of importers/distributors. One should bear in mind that nowadays Russian importers/distributors handle products of various origin and they commit to the active promotion of a foreign item only upon a contract of exclusive right on sales and a clear paln of support of the marketing. Russian companies want to be sure that no other Russian competitor will disturb their activities and their investments on a foreign brand and that ther will be profits in the medium-long term.

It should also be pointed out that the Russian legislation doesn't specifically regulate the contracts of distribution, but it equates them to the contracts of agency or of sale, thus not considering their profile of exclusivity or the other peculiarities of the relationship of distribution.