Technology Requirements of Retailers in Emerging Markets. A Case Study on Russia. (Strategic Focus)

Technology Requirements of Retailers in Emerging Markets. A Case Study on Russia. (Strategic Focus) published by Datamonitor in December, 2009. This report consists of 37 pages and the price starts from US $ 3395.

Introduction

Abstract

Introduction

The Russian retail market recorded outstanding growth in 2007 but since the economic downturn took hold in Russia, the outlook seems bleak. This report will look at the obstacles facing Russian retailers and how technology can assist in overcoming these country-specific obstacles. It will also outline the size of the markets for retail technology and discuss the leading players in the sector.

Scope of this research

• An overview of the Russian retail along with discussion about the future of the sector.
• Outline of the retail technology in Russia, specifically focusing on the leading domestic and international vendors and service providers.
• Highlights the technology being delopyed by the leading retailers in the market.
• Provides recommendations for successful market entry.

Research and analysis highlights

As the credit crunch impacted global market, the years of immense growth in Russia ended. Consumers have stopped spending and retail sales are suffering. Moreover, retailers are facing competition from international retail market entrants which see the growth potential in Russia in the not too distant the future.

Expansion is the only way to compete, be it through consolidation, moving into smaller Russian cities or by selling through new channels. Technology will be required to help with this expansion.

Ovum believes technology and services suppliers targeting retailers with expansion strategies will benefit from huge gains in the future. However, steps should be taken to ensure successful markets entry. Partnering with local providers will ensure vendors are familiar with the nuances of the Russian retail sector.

Key reasons to purchase this research

• Learn about Russian retail and the requirements for technology the sector.
• Understand the difficulties surrounding Russian market entry from the point of view of both retailers and retail technology and services providers.

Table of Contents

OVERVIEW

• Catalyst
• Summary

KEY MESSAGES

• The boom years are over. Russian retail faces recession and stiff international competition
• Opportunities for technology lie in Russian retail expansion
• Enter the market now to reap long-term rewards, but do so with caution

MARKET OPPORTUNITY

• The Russian retail boom is over, for now
  • Since the turn of the century, the Russia retail market has grown at an astounding rate
  • The Russian economy has once again taken a turn for the worse
  • Rapid growth is a thing of the past as the downturn impacts retail prospects
  • The days of impulsive consumer spending in Russia are in the past. Queue the rise of the discounter.
  • Russia remains a risky market but the long term gains on successful market entry are abundant

• Retailers grappling the downturn also face international competition and other hindrances
  • The most resilient sectors such as grocery provide the best opportunities for global players
  • The traditional Russian retail sector has changed as domestic retailers compete with international entrants
  • Despite the strong growth potential, there are still several issues hindering retail development in Russia

• Opportunities for technology lie in retail expansion
  • Market saturation is pushing retailers out into smaller cities
  • Expansion into smaller Russian cities requires budget for infrastructure expenditure
  • Fragmentation will lead to consolidation
  • Internet retailing is still in its infancy in Russia but retail expansion through online channel is set to grow

PROFILE OF TECHNOLOGY IN THE RETAIL SECTOR

• Ovum forecasts for Russian retail technology
  • Hardware
  • Software
  • Services
  • Communications

RETAIL BUSINESS PROFILES

• Domestic retailers
  • The largest retailer in Russia by revenue, X5, is leading market consolidation both in-store and online
  • The largest retailer in Russia in terms of store size, Magnit, raised cash in 2009 to continue organic growth
  • Grocer Dixy is focusing investment on optimization of logistics
  • Lenta continually investment in modern IT infrastructure to increase performance and reduce costs
  • Seventh Continent' s IT mostly consists of home grown systems

• International retailer profiles
  • As Carrefour bows out, Auchan continues to expand in Russia
  • IKEA will invest in an infrastructure to support multichannel retailing
  • Metro encourages retail technology innovation

COMPETITIVE LANDSCAPE

• Profiles of domestic vendors and service providers
  • 1C
  • Borlas Retail
  • CROC
  • IBS
  • KORUS Consulting
  • MTS
  • Service Plus

• Profiles of international vendors
  • SAP
  • Oracle
  • IBM
  • Manhattan Associates

GO TO MARKET

• Vendors should enter the Russian retail market now to benefit in the long term
  • Market is fragmented so be present to leverage the opportunities from consolidation of systems
  • Opportunity lies in expanding retailers
  • Grocery market is set to grow the fastest but tier 1s mostly have suites already
  • Domestic players benefit the most from international vendors experience in retail

• Recommendations
  • Foreign vendors should partner local firms
  • Consulting and support services are invaluable for ambitious, growing retailers
  • Offer finance packages
  • Target tier 1 grocers with point solutions and multichannel integration
  • Beware of corruption and bureaucracy

APPENDIX

• Definitions
• Methodology
• Further reading
• Ask the analyst
• Ovum consulting
• Disclaimer

TABLES

• Table: Russian retail expenditure 2003 - 2008e
• Table: Russian consumer broadband forecast 2009 - 2014
• Table: Reasons given by Russian consumers that have never shopped online, 2009
• Table: Russian retail, wholesale and logistics forecasts for the overall IT hardware sector for 2008 - 2014
• Table: Russian retail. wholesale and logistics forecasts for segments of hardware sector 2008 - 2014
• Table: Revenue for IT applications in retail, wholesale and distribution in Russia
• Table: IT Services Revenue in Russia, Retail, Wholesale and Distribution, 2007-2013
• Table: Russian unified communications market revenue forecast by verticals 2007 - 2013

FIGURES

• Figure: The fluctuating price of oil (May 2007 to May 2009)
• Figure: Russian retail expenditure 2003 - 2008e
• Figure: Russian regional population density
• Figure: Multichannel retail in Russia in 2009 - 2010
• Figure: Russia consumer broadband forecast 2009 - 14
• Figure: Russian retail, wholesale and logistics forecasts for the overall IT hardware sector for 2008 - 2014
• Figure: Russian retail. wholesale and logistics forecasts for segments of hardware sector 2008 - 2014
• Figure: Revenue for IT applications in retail, wholesale and distribution in Russia
• Figure: IT Services Revenue in Russia, Retail, Wholesale and Distribution, 2007-2013
• Figure: Russian unified communications market revenue forecast by verticals 2007 - 2013
• Figure: Russian expansion of three leading international players

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