Russian Market

A)- Pestel :

• Political

- A federal semi-presidential republic.

Russia is a federated state with a republican government. The territory of the state consists of 89 constituents of the Federation. The Head of State is the President elected for 4 years’ term. The President is also the supreme commander of the armed forces of the Russian Federation. The representative and legislative body of the country is the Federal Assembly (Russian Parliament) composed of two chambers: the Federation Council and State Duma. The executive authority is represented by the Government of the Russian Federation.

- Membership of WTO

The Working Party on the Accession of the Russian Federation was established on 16 June 1993. The Working Party completed its mandate on 10 November 2011, under the chairmanship of Ambassador Stefán Jóhannesson (Iceland). The Eighth Ministerial Conference formally approved the Accession Package of the Russian Federation on 16 December 2011. On 22 August 2012, the WTO welcomed the Russian Federation as its 156th member.

- Foreign investments are welcoming in Russia

Russia has made significant improvements in its business environment since the last decade, adopting laws to protect the property and other rights of investors, and establishing institutions needed for a market economy to function. Russia has also signed investment and double-taxation treaties with OECD members and other countries.

- A favorable tax regime

The main profit tax rate — at 20% — is one of the lowest amongst the major economies. Tax and other incentives are becoming more common, for example with the establishment of additional special economic zones and the Skolkovo Innovation Centre. Many of the incentives are aimed at promoting innovation and the modernization of industry. The tax system, however, remains inflexible and poorly administered.

• Economy

- Population 142,500,482 (July 2013 est.)

Age structure 0-14 years: 16% (male 11,740,877/female 11,119,318)

15-24 years: 11.5% (male 8,401,971/female 8,045,363)

25-54 years: 45.9% (male 31,945,797/female 33,417,073)

55-64 years: 13.5% (male 8,177,300/female 11,009,712)

65 years and over: 13.1% (male 5,687,515/female 12,955,556) (2013 est.)

Dependency ratios total dependency ratio: 40.5 %

youth dependency ratio: 22.2 %

elderly dependency ratio: 18.3 %

potential support ratio: 5.5 (2013)

Median age total: 38.8 years

male: 35.8 years

female: 41.8 years (2013 est.)

In Russia, the number of female start from age 25 is larger than the number of male. There is a huge potential of female market which is favorable for Magazine Anti-Age considerate of the main readers of this magazine are females. And the Median age of female is around 41,8 year old, at this age, women buy much more cosmetics products than ever.

- GDP: 2.5 trillion USD ( 3.4% growth)

- Unemployment: 6.0%

- Concentration of billionaires: Third largest in the world

Although the majority of rich people still lives in North America and in

Europe, Russia is one of the leaders in terms of the rising number of millionaires (17,4%). The only other countries preceding Russia in this category are India and South Korea.

- The Russian beauty market grew to an estimated USD 13.9 billion

The Russian cosmetics and personal care market is gradually recovering from the 2008-2009 recession. The Russian beauty market grew to an estimated USD 13.9 billion (EUR 10.75 billion) in 2012, compared to 13.5 billion (EUR 10.43 billion) in 2011 and is forecasted to reach USD 15.6 billion (EUR 12.06 billion) in 2015.

- The main segments of cosmetic market: Perfumed 23%, skin care 22,6%, hair care 19,2%, make up 15,4%

By 2012 the market demonstrated the highest growth by 21% since 2004, and reached USD 13,5bln. In 2012 cosmetics market volume is estimated at USD 13,9bln. Market is gradually recovering after the crisis, which is associated with the strengthening of the ruble, rising incomes and increasing consumer expectation index.

• Sociocultural

- A large number of feminine population

Female customers read much more magazines than men, as in Russia there is a lot of women, the potential of market is much larger than anywhere else. Especially that in Russia, the average age of start to make up is around 16, women start to make up very early. As there are much more women than men, many women try to make themselves prettier than other ones to be more attractive among their competitors.

- With a growth of 13% on cosmetics and personal care market

By October 2012 number of specialized perfumery & retail chains increased by +24,2% (compared to the previous year). Moscow is the leader in specialized retail with some 800 point of sales. In the nearest future Moscow area and other towns of Central Federal District will see the growth in quantity of point of sales. Besides federal retail chains some 25 regional specialized retailers operate in the market. On average each of them comprises of 20-146 points of sales. The biggest are Seven days (Voronezh), Novex (Siberia), Podruzhka (Moscow), Alpari (Tatarstan).

- Confidence en French cosmetic

In Russia, people trust French cosmetic products and French products have good reputation in this sector.

- The exaggerated consumption and desire to show off

First, the wealth has been acquired during the last 10-15 years and is therefore quite “young”, and in Russia there are absolutely no traditions for the financial management of such million-dollar fortunes. Such traditions are usually formed over centuries. The second

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