Business opportunities opening up in Saint Petersburg’s fashion market
The city of St. Petersburg is set to use its creative potential fully and is committed to creating an international fashion cluster in Russia.
One of the main purposes of this initiative is to bring together the creative work of designers and possibilities large national manufacturers can offer. Establishing the future Fashion capital of Russia 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’. The project 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 fashion industry around the world and its role as a driver of creative economies, and to discuss contemporary trends and the main challenges of the industry.
The project has already kicked off in Russia with a priority status. Researching the fashion market and strategy work for future development has commenced in 2017. Creating 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.
Russian consumers keen to invest in fashion
According to the information announced by the Ministry of Industry and Trade of the Russian Federation, the fashion industry in Russia was showing sustainable growth in years 2016-2017. The fashion market is beginning to emerge from the crisis and is showing signs of recovery, resulting in 2% increase in production. Many foreign brands have once again shown interest in the Russian market. 11 new brands entered the Russian market, including French Aigle, English Barbour, German Jil Sander Navy, to name a few.
Russian consumers are also adapting to the new market situation. They are now willing to purchase more fashion products than 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 choosing inexpensive 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 income level, the consumers still prefer to buy imported clothes and shoes.
Vast opportunities in the future Fashion Capital
St. Petersburg with its continuously growing tourist numbers hasn’t been chosen as a site for the Center of the Fashion Industry project by accident. In the city, 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, such as SPb Fashion Week, Aurora Fashion Week, Mercedes-Benz Fashion Week Russia, Fashion Industry Exhibition, Admiralty Needle, and various other fashion exhibitions and fairs. Talented designers have good opportunities to become known in the field and to show their vision to fashion experts.
- Different cultural and historical locations that 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.
Authorities of St. Petersburg are supporting the project’s strategic development with financial subsidies (rental subsidies, equipment leasing, preferential loans, tax preferences), new technologies (supporting young designers and new startup companies by creating so-called digital factories), and educational programs.
Saint Petersburg is ready to offer convenient and clear opportunities in the fashion industry and welcomes foreign designers to establish connections and contribute to professional and creative exchange.
Consumer companies from Finland are fairly well known in Russia, including Finnish companies in the fashion industry. With Finland’s long presence in the consumer market, good reputation and highly valued product quality, Finnish fashion designers could occupy their own niche in the market. For Finnish companies in the fashion industry, business opportunities are available in the following product categories:
- fashion clothing
- outdoor clothing & accessories
- other fashion accessories
Finnish-Russian Chamber of Commerce is planning to host a buyer event next fall in the Embassy of Finland in St. Petersburg. If you are a Finnish company interested in the event and this business opportunity, please contact us for further information.