In recent decades, the fashion industry has been an engine for global development. Being one of the world’s largest consumer industries, it generates €1.5 trillion in annual revenues and employs about 60 million people around the globe. 

The Russian fashion market is gradually recovering from recession caused by European sanctions. Inflation, price and VAT increase (VAT increased to 20% as of 1 January 2019) have affected the behavior of many Russian consumers. Average people spend now more money on food, rent and other household expenses and less money on clothes and shoes. 

The Russian fashion industry grew by 3% last year reaching RUB 2,36 trillion (EUR 32,2 billion). The industry achieved a positive growth rate in 2016, an increase of 1,3% compared to a considerable drop of 7% in 2015. In 2017, the positive growth rate continued, an increase of 2,6% compared to 2016.

E-commerce is the main driving force in fashion retail in Russia. Despite a sharp decline in people’s purchasing power, online sales grew by 20% totaling close to RUB 200 billion (EUR 2,72 billion) in 2018. The online share reached 10% in the total fashion sales volume and will continue to grow moderately in 2019.

Moscow and Saint Petersburg are the biggest fashion markets in Russia. They have the largest concentration of retail chains, shopping malls, mono-brand stores and off-price stores as well as the biggest number of consumers.

Value and discount segments account for 65% of the total fashion sales in Russia. Luxury and affordable luxury segments are more or less stable. Premium and mid-market segments are sluggish. Mid-market players have to struggle in the face of strong competition from value players and increasing market saturation.  

The fashion industry provides an important contribution to the economy of Saint Petersburg and is an important source of employment and added value. The city has a big fashion cluster with many small ateliers, medium-sized companies and famous fashion houses. It has a rich history, beautiful architecture, many famous museums, art galleries, universities and design schools. Saint Petersburg has the required infrastructure, a large concentration of fashion designers (2.000 designers) and holds high-profile fashion events.