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CONTENTS
• Important reservations • Key facts • Opportunities
General Overview of CIS market
• Overall product trends • New segments • Tablet focus
Key Product Trends
• Distribution • Retail • Mono-brand retail
Key Channel Trends
1. Individual opinion is presented, shouldn’t be considered as direct/indirect business advice, no one could be hold liable for consequences
2. No overload with numbers, rather focused on “sharing of observations” => other speakers will present significant volume of numbers
3. Mainly mean Russia (more experience and the biggest market in CIS)
4. Mainly relevant for B2C segment
GENERAL RESERVATIONS
RU market is in TOP3 in EMEA in all major categories
Still good potential for growth as penetration level for ICT products is below mature markets level
Consumption shifts between product groups => Impacting channel power balance
GENERAL OVERVIEW OF CIS MARKETS
NO SINGLE CIS REGION CHANNEL STRATEGY
CO
UN
TRY
IND
IVID
UA
L S
ITU
ATIO
N
- enforcement of regulations - level of competitive powers - consumer buying power - infrastructure development - specific channels - general economic situation
INDIVIDUAL COUNTRY STRATEGY: - PRODUCT - CHANNEL - PROMOTION
HOWEVER, CUSTOMS UNION Establishment of Customs Union of Russia, Kazakhstan and Belorussia created additional opportunities for vendors and distributors: • Easier cross-boarder expansion • Simplified operations in multiple countries
Opportunity/Risk balance
One of the solutions – expansion through M&A to leverage power and local skills
OPPORTUNITIES IN CIS
MAJOR INTERNATIONAL
VENDORS
• Increasing business transparency. Still far from ideal
• Potential market size
• Market perceptive for technologies and brand addictive
NICHE PRODUCT SEGMENT VENDORS
• Still fragmented channel
• New products segments emerge fast (Car DVRs, BT Products)
• Smartphone and Tablet penetration Growth
DISTRIBUTORS
• Expansion possibilities • Transforming channel
requires new services
PRODUCT TRENDS: GENERAL 1. Mobility focus supported by Infrastructure development
(3G & LTE networks) and efforts of Telecom operators 2. Among fastest growing: Tablets, Smartphones and
Accessories, Connectivity and Data Sharing Devices (content consumption driven)
3. Visible slow-down in the biggest products groups, such as notebooks PC
4. Further segmentation of personal computing market: emerge of Convertibles can jeopardize Ultrabook position
TABLETS! TABLETS! TABLETS!
PRODUCT TRENDS: TABLETS 1. Tablets are becoming No 1 solution for content
consumption: almost total replacement of netbooks 2. Tablets get more popular also in B2B (supported by emerge
of Cloud Computing Solutions and applications development)
3. Competition between tablet suppliers gets more fierce: • Growing Android Appreciation • Launch of Windows 8 • Low entry barriers – vast OEM/ODM opportunities
4. Product group segmentation through screen-size
DISTRIBUTION TRENDS • Shrinking business volumes due to vendors direct
supply to biggest accounts for major product groups • Risk of key accounts business due to volumes
reduction
CONSOLIDATION?
Happened already in Consumer Electronics –
only few remain
Not so fast in IT – more complex product portfolio
(possibility to play in product niche), more
complex channel
DISTRIBUTION TRENDS
Survival and Growth Options for Broadband Distributors:
Value add distribution
Niche high-margin
distribution Focus on logistics
Product diversification
Downstream/Upstream
vertical integration
RETAIL TRENDS 1. A lot of plans for store number growth, but questionable
2. Further consolidation of the channel, major federal retailers winning share
3. Regional retail players stay only in smaller formats and in smaller cities, unfeasible for majors
4. Growth opportunities for Telco retailers, as consumer preferences shifts support their business
5. Further development of on-line retail: early to talk about consolidation, but major investments and focus on multi-channeling
6. Further development of franchise projects is questionable
OPPORTUNITIES?
1. BIG MARKET WITH GROWTH POTENTIAL 2. NOTICABLE SHIFTS IN CONSUMERS
PREFERENCES 3. NEW OPPORTUNITIES FOR MARKET
PLAYERS 4. COMPLEX MARKET, REQUIRES
PROFESSIONAL APPROACH
CONCLUSIONS
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