Business Opportunities will be available in the Saint Petersburg’s fashion market
St. Petersburg is going to use its creative potential and to create a fashion cluster. The importance of the development of this sphere was announced at the St. Petersburg International Economic Forum in 2017, during which the signing of the documents marked the launch of the project named, ”St. Petersburg-Center of the Fashion Industry.”
Since 21.03.2019 fashion cluster has began its activities in real life. It aims to develop a new approach to fashion in Russia and to create a platform for both Russian and international industry fashion players, where they can share their experiences and views on the current state of the fashion industry around the world and its role as a driver of creative economies, to discuss contemporary trends and the main challenges of the industry.
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The importance of the development of this sphere was announced at the St. Petersburg International Economic Forum in 2017, during which the signing of the documents marked the launch of the project named, ‘St. Petersburg-Center of the Fashion Industry.’ It aims to develop a new approach to fashion in Russia and to create a platform for both Russian and international industry fashion players, where they can share their experiences and views on the current state of the fashion industry around the world and its role as a driver of creative economies, to discuss contemporary trends and the main challenges of the industry.
This ambitious project should be implemented by 2020 and aims to increase the volume of production by 10% and the quantity of the small business companies by 20%. By 2030 the last figure is expected to increase by 25%. Besides, it is essential to format the image of St. Petersburg as a national and international fashion center. Estimated costs of the project are at 14.4 BRUB (205MEUR).
Some of the steps have already been done. The project has already received priority Status. In addition, the researching of the fashion market and defining the strategy for the future development has commenced in 2017. The process of creation of the business incubators and accelerators, showrooms and online platforms has also begun. In parallel the city authorities have already approved the procedure for compensation of rental costs, participation in exhibitions and fairs as well as reimbursement on bank loans. In 2017 this program resulted in 80 subsidies totaling 21.4 MRUB (0.3MEUR).
Together with government bodies, research centers, universities and schools the City is carrying out different subprograms that strengthen innovation, creativity, growth and internationalization.
According to the information announced by the Ministry of Industry and Trade of the Russian Federation, the fashion industry in the years 2017-2018 in Russia was showing sustainable growth.
The Russian fashion market is beginning to emerge from the crisis and show signs of recovery. The increase in production is amounted by 2%. Some foreign brands have once again shown their interest in the Russian market. 11 new brands entered the Russian market in 2017, including French Aigle, English Barbour, German Jil Sander Navy and others.
27 new international retailers entered the Russian market in 2018, 13 of them represent the fashion industry. Among them are the German clothing brand Orsay (returned to Russia), Swedish fashion retailer COS, shoe brand Dr. Martens. In addition, a major fashion retailer Mexx announced its intention to return to the Russian market. More than 50% of the brands entered the Russian market represent the ”premium” segment, 39% – middle, 7% – luxury brands.
In 2018, in St. Petersburg (first 9 months of 2018) nine new international brands, not previously represented in the city, entered the market: Victoria’s Secret (opened a two-storey shop with an area of 1,000 sq.m in the Gallery shopping mall), international brand of sportswear Under Armour, the French group Etam entered the market of St. Petersburg with its second brand Undiz – underwear store, as well as the flagship store of underwear Opium, the first store of the Turkish fashion retailer DeFacto.
Consumers have also managed to get used to the new market situation. They are not now reluctant to purchase as often as before. Compared to the situation two years ago the share of consumers planning to buy less has decreased by an average 11%. At the same time, the share of those who plan to buy clothes in the same volume as in 2016 increased significantly (by an average of 20%). Moreover, this trend is typical for all buyers, not only for buyers of children’s and teen clothes, but also of men’s and women’s clothing. The number of people willing to buy cheap brands is decreasing. The government efforts for import substitution are not visible in the fashion market. It is still dependent on imports (around 80%). Depending on their incomes, the consumer still prefers to buy imported clothes and shoes.
St. Petersburg with its continuously growing tourist number hasn’t been accidentally chosen as a site for this project. There are:
- over 2000 designers and 450 producers of clothing, footwear, accessories, garments, which are keen to achieve their creative potential in this field
- regular fashion events as SPb Fashion Week, Aurora Fashion Week, Mercedes-Benz Fashion Week Russia, Fashion Industry Exhibition, Admiralty Needle and other various fashion exhibitions and fairs. The talented designers have the good opportunities to become known in the field and to show their vision to fashion experts
- different cultural and historical places might be chosen for fashion events
- a large number of professional and higher education institutions. According to research conducted by PwC and Calvert 22, Saint Petersburg occupies the second place in Russia by the index of creative capital
The main strategic development directions announced by the city authorities are:
• financial subsidies (rental subsidies, equipment leasing, preferential loans, tax preferences) and the creation of the fashion spaces in the premises owned by the city. Most of them will be in historical places with a rich and interesting history. One of such places has already started to provide services for new and famous local designers – ArtPlay.
• new technologies. The business incubators will help young designers and new startup companies to develop by providing them with the most modern equipment and new technologies creating so called digital factories. The basis of the project is creation of high-tech companies in the fashion industry, the transformation of the fashion industry under the impact of scientific and technological revolution.
• educational programs. Advancing the education from basic to advanced levels, as well as promoting research and development for this sector.
Saint Petersburg is ready to offer convenient, clear and familiar format welcoming foreign designers, to establish conditions for building and maintaining links with them, contributing to professional and creative exchanges.
Finnish companies are very active in Russia. They are well known in the fashion market too. Through their long presence, good reputation and highly valued product quality Finnish designers could occupy their own niche in the market.
Elena Marina (ru,eng,fi)
+7 921 869 05 06