Country Report

Russian Export Review – Who’s Next?

Reprinted from Russian Studies, Mebelny Biznes

For the recent couple of years, exportation to Europe has been a hot topic in Russian furniture industry. After a sharp devaluation of ruble in 2014, supplying goods to the West seemed an alluring opportunity for many producers. Hence, collective presentation of the country’s furniture industry representatives in Cologne was considered a major breakthrough. Leaving aside massive rotation of Russian companies, imm cologne 2018 and 2019 saw a more impressive nation’s delegation. As for the number of participating Russian companies (13 — in 2018, 9 — in 2019) and the space they used, these years have become recordbreaking regarding all the years Russia had been participating in the Cologne fair. Uwe Deitersen, as of the beginning of 2018 — the imm cologne project manager, currently — director of customer relations for the furniture industry in Koelnmesse, told he was pleased to note that Russian participants now apply for booking space earlier than in the previous years.

The 2018 imm cologne marked the beginning of Russian exhibitors’ advertising activity in the German industry media. Starting from the opening of the fair, Russian delegation had two articles published in the imm daily issue (circulation of 20,000). This newspaper is published by MÖBELMARKT, leading German trade publication and Mebelny Biznes’ partner at the International Alliance of Furnishing Publications (IAFP). The MÖBELMARKT’s international editorin-chief Helmut Merkel suggested to embrace other media channels in future to draw more attention to Russian national pavilion. But, he adds, they should start well in advance.

In Cologne 2018 and 2019, Russia was represented by the enterprises from across the nation: large and small businesses, including niche companies. The country’s national pavilion showcased a wide range of furniture, such as upholstered and cabinet furniture (for both adult and teenage bedroom, living room, wardrobes, and nursery), mattresses and sleeping products, tables and chairs, dining room sets, supporting furniture, and contract furniture.

Equal among equals

In 2017, the Ormatek group of companies had quite an experimental strategy at imm, sort of a recon by fire. In 2018, however, the enterprise has decided to take a better focused approach and concentrate mainly on the solutions for hotels and retail chains. While being zoned perfectly, Ormatek brand display in hall 5.2 effectively showcased the company’s hit products along with the new developments specifically aimed at external market.

“We tried to cover every point important for the foreign partners,” says Evgeny Aksenov, general director at Ormatek Trading House. “I mean product design along with DFM and functionality requirements. We have primarily been focusing on several price segments: economy, medium and medium-plus. For imm cologne 2018, we have exclusively designed new integrated solutions for furnishing rooms and suits for a variety of hotels. This aim became achievable thanks to Ormatek’s extensive expertise in providing services for hospitality industry.”

According to Aksenov, the display’s visitors paid special attention to two types of products. Firstly, the box-spring sleeping systems outfitted with various bedheads. And secondly, the mattresses, both foamy and box-spring/coir, procured in a rolled-up form.

“Rolling up mattresses allows to considerably reduce logistic expenses, which is crucial for exportation,” the head of Ormatek adds. “Our current and potential partners value this approach. Generally, our guests noticed innovations, high quality of products and quick — up to 10 days — delivery to Europe. I believe, Ormatek holds good chances to break into new markets and expand its distribution to Europe and Asia.”

Lubidom, from Rostov region, is one of the leading companies of Russian furniture industry. It showcases at Koelnmesse pavilion 7, the most crowded place among the mass segment furniture halls. Back in 2016 the company first reserved the perfect spot, and ever since the imm management has never denied Lubidom its favourable location.

“I am very happy with the expo,” says Sergey Zmievsky, general director of Almaz. “It eventually yielded the results we were hoping for when we decided to boost our exports. Actually, it all happens as in the scenario Uwe Deitersen outlined four years ago. He told us then, the initial fair was a disappointment for a first-timer company, the second one was the salon of hope, the third expo usually built up great expectations and only the fourth try could bring commercial success. And we had fully undergone these stages, we spent four years trying to engage European retailers one way or another. In 2018, they have simply come to us. German trade union deputations, heads of wholesale aggregators, executives from buying departments of major European and Asian networks. The key of the negotiations has also changed. Previously, all they wanted to know was if we could cut the stated price. Now, however, buyers have grown to appreciate our product and praise our goods.

At the fair we had actual negotiations on developing exclusive furniture solutions for several networks. We also received a tempting proposal from a German union, that was ready to list all the Lubidom product mix and act as our agent in the EU. However, we might turn it down, as our German colleagues warned us not to give all the margin to middlemen.

Sales network XXXLutz, our major loyal customer in Europe, increased the amount of the one-year contract and extended its consumption of our goods and services. At the fair, we also reached agreements with several trade networks, such as Porta, Poco, and Polish Agata Meble.

We have plans on further increasing our European market share and also expanding our presence in Asian market. Altogether, we want our exportation share to rise up to 35% of the overall sales volume.”

In 2018 and 2019, together with Lubidom, pavilion 7 received two more Russian participants. Kaluga’s Elmat factory, that presented homeproduced economy coat stands, tables and chairs under the brand name Sheffilton, and E1, Krasnodar region, a major manufacturer of sliding door wardrobes.

“At our first try in 2018, we displayed our hit wardrobes Express and Esta”, says Aleksandr Linevich, general director at E1. ‘We also presented Prime, a wardrobe system we made using TopLine M profiles by Hettich, this product has been created specifically for the European consumer.

We were thoroughly preparing for our first Cologne event. We had concluded an agreement with the fair executives in the early 2017. Without waiting for confirmation of financial support from the Russian Export Center, we’d booked a spot of 30 sq. meters in pavilion 7. It turned out that the traffic there was great, and the neighbors were just right. Thus E1 was exhibiting beside the world’s leading manufacturers, of course, we were happy.

The representatives of E1 exportation department had concluded over a hundred of phone and personal negotiations with European agents. Well in advance, we had sent our business proposals to the top 10 European furniture retailers. No efforts were spent in vain. Our stand had around 5,000 visitors. We held over 40 meetings with our potential retailers. As for the major companies, we received the representatives of Steinhoff, Austrian XXXLutz, Danish retailer Jysk, Czech network ORFA, which made a request right at the fair.

In the end, our company engaged the interest of many traders from the UK, the Netherlands, Germany, Slovakia, Romania, Israel, Spain, and France. A Brazilian shopping mall chain announced their eagerness to order the Express product line. We also had fruitful negotiations with a major Indian developer, and now we are expecting the company’s representatives to visit us at home, in Belorechensk.”

Under one umbrella

The first-ever Russia’s national pavilion in 2018 was situated in Koelnmesse hall 5.1. It should be marked, that Russia got the most attractive, virtually central place of the lounge.

United stand brought together several companies, for instance, Mebel Impex Opt was participating in the fair for the second time, the company again displayed rocking chairs, lounge chairs and the pieces of supplying furniture. Cherepovets Plywood and Furniture Plant (CPFP), a frequent exhibitor in Cologne, presented over 40 items made employing the technologies of advanced wood processing such as birch plywood, several types of particle boards and sawn wood. Today, CPFP supplies more than 50 countries all-across the world, it has clients in the CIS, Western and Eastern Europe, North America, and Africa.

Other members of Russian national pavilion made their imm cologne debut in 2018.

Kaliningrad, the country’s westernmost exclave, was represented by two manufacturers. Since the city is so close to Europe, its companies have perfectly understandable interest towards Western market. Pragmatika displayed cabinet furniture for bedroom, while Dedal showcased extendable tables, the completely new products of this manufacturer: they only hit the company’s product list last year.

“We decided to set up manufacturing of these goods after an encounter with a European retailer, hence, we were mainly focusing on exporting them,” says Igor Gerasimchuk, Dedal’s general director. “We’ve managed to boost our sales, but striving for more, we went to Cologne. Within the fair we conducted negotiations with our current clients and showed them our newly designed products.”

UTA, from Nizhny Novgorod, exhibited its collection of classic tables and chairs made of natural wood.

“I understand, we are not getting huge distribution numbers in German market,” says Aleksandr Lebedev, the head of UTA. “However, besides the Germans, we met buyers from Eastern Europe, the Middle East, and India. Certain preliminary agreements were concluded. Personally, Ithink that the national pavilion concept works fine as a trial, to see if you need to participate in the exposition stand-alone in futre.”

MakeUpTable provided working tables for hairdressers, stylists and other talents of the beauty-industry, while EuroDeck showcased finish materials made of hardwood. Dextronic was offering smart options, i.e. TabulaSense, ergonomic work desks with builtin electronics, and the visitors were excited to try them.

Belsi showed Cologne what does trendy Russian design look like. Ergonomic chairs SkeletON, by young designer Semen Lavdanskiy, attracted everyone’s attention thanks to their novel look. These eccentric objects particularly engaged the head of imm cologne in 2018, while he was examining Russian national pavilion.

In 2019, the list of Russian exhibitors in Cologne has been refreshed by such companies as Driada kitchens (from Volgodonsk), MST.Mebel and Naidy (cabinet furniture and wardrobes from Izhevsk), Rivalli (uphostered furniture producer from the Moscow area), and SvyazServisBaltic (Fosto trade mark for kitchen sinks made of stone).

Little surprise, Russian booths magnetized Russian visitors of the Cologne fair. Compatriots came to see how the country’s representatives were faring among other participants, what they were offering and what impressions they had to share. The business activity around Russian exhibitions was rather intense. According to Koelnmesse, in 2018, when the Russian national pavilion has been arranged for the first time, the number of Russian visitors at imm cologne grew up by impressive 69%.

However, there is a difference between a week’s work at an exhibition and consistent overseas sales. No wonder, market consultants often say, exportation works for those, who see external markets as their fundamental aim and long-term investment. Such strategically oriented Russian furniture exporters consider imm cologne as a gate to Western Markets. And we will not be mistaken if we say that the fair will continue to serve as the most attractive exhibition platform for Russian manufacturers in foreseeable future.

Show More

admin

just an admin

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close