Zeljko William Krnjak on why this is the perfect time to break into Russia.
Firstly, can you run through the basics of the event?
Licensing@Russia is the first ever international licensing industry show and conference in this fascinating country. The event will take place in Moscow from March 14th to 16th, at the Crocus Expo International Exhibition Centre, Pavilion 3, Hall 14, from 10:00 to 18:00. This new, privately owned exhibition venue is one of the biggest in the world and is built and equipped to leading international standards.
Licensing@Russia is sharing the same exhibition hall with major international stationary fair Skrepka, whilst another big international exhibition - Toys & Kids Russia - is in the neighbouring Hall 13. Attendees, exhibitors and visitors from each of these events can freely visit the other two - this is of great benefit to the 16000 professionals expected to attend. Also, the Metro Fair event, organised by powerful retail-chain Metro Cash and Carry will be held in Hall 15.
These three days of licensing in Russia are a milestone for Russia, as well as for the international licensing business.
LIMA is the official educational provider and the conference programme is really strong, with main speakers such as Leigh Ann Brodsky - former president of Nickelodeon and Viacom consumer products; Gregory J. Battersby - Grimes & Battersby, LLC and counsel for the LIMA; Danny Simon - The Licensing Group, former Chairman of the LIMA Board; Charles Riotto – President of LIMA, and Philippe Guinaudeau - CEO, Kidz Global. Also speaking will be leading licensing professionals from Russia.
The third day promises to be very interesting as it is Special Russia Day, organised with the Licensing Committee of the National Association of Toy Manufacturers in Russia.
How many exhibitors have signed up and who are they? What kind of things will they be showing?
Riki Group - Nickelodeon as general partner; Plus Licens, Rio Licensing, European Licensing Company (ELC) are partners. Other companies include The Walt Disney Company CIS LLC, Dreamworks, Hasbro, Turner CN Enterprises, Warner Bros., Nike, Megalicense, Art & Design RU, Carmen Ariza Licensing, Total Licensing, Guide to The Licensing World, Brandora, Kidz Global, Studio 100, Entertainment One, Black & White Licensing/JELC, PJB Brands, Vipoland, All Media, Endemol, Fremantle Media, CBA, BBC Worldwide, The Beanstalk Group, Mondo TV, Beverly Hills Polo Club, The Bella Sara Company, Icon Promotions and Rudenko (RosKreativ).
All together, more then 300 brands and properties will be represented and this is the first time international and Russian national properties have been presented together.
How many visitors are you anticipating? Which countries are you mainly expecting them to be from?
We have more then 1,200 direct registrants, but this is not the final number because we have noticed significant growth in registration over the last few days. Professionals from executive level, opinion makers and market leaders are all attending, with approximately 30 per cent from the international licensing community. Of course, those who are actively involved in the licensing business in Russia & CIS will also be with us, but also those who are interested in better understanding the circumstances and opportunities that exist in the Russian/CIS licensing business and how to capitalise on this huge potential.
Combine our visitors with those attending the other two events and the number is more then 16,000.
Why do you think the Russia and CIS region needs its own dedicated show?
Combined with neighbouring markets, Russia has about 300 million consumers who are affluent and part of a growing middle class that boosts the consumer goods business in the country. This size is equal to the United States.
Yet Russia has never been thought of as a nation of spenders, especially given its past history of anti-capitalism. However, some interesting statistics and a flurry of recent deals in consumer-oriented sectors in the country tell a different story. Russia, with a population of 142 million, is the largest consumer market in Central and Eastern Europe. What’s more, Moscow is ranked the largest city in Europe, beating even London.
A recent survey has identified Moscow as the most desirable European city for companies to expand into for the second year running. One of the factors driving Moscow's popularity as a destination is an increasing focus by European companies on growth markets. Those surveyed viewed 'new opportunities from the emerging markets for products and services' as the number one trend likely to impact business over the next five years.
The large and newly-affluent urban population in Russia’s cities provided a big boost to the development of the retail market in the country. The Russian economy is slated to become the second-largest in Europe by 2013 behind Germany.
Political stability has helped boost consumer confidence and it has been pointed out that 70 per cent of income earned by Russians is disposable, which compares with around 40 per cent for Western consumers. Russia also has a mobile phone subscriber base of 215 million, which is the largest in Europe.
Facts related to the licensing business show the importance of the Russian market for Hollywood studios looking for growth markets. Box office revenues in the country have soared over the past decade to more than $1bn, rising at a compound annual rate of 27 per cent since 2006. Russia’s growth has outpaced established markets and emerging ones like China and there is a cultural revolution under way in terms of people embracing cinema. The Russian market is where Disney and other film companies will increasingly be seeking to generate momentum for a franchise.
In five years, the Russian media market will have grown 1.7 times and will be worth US$35.7bn. All media segments will demonstrate positive growth in 2011 to 2015. Almost all segments of the Russian media market will demonstrate faster growth rates than their counterparts in the global market. The Russian toy market is also the world leader for growth - with experts talking of rates of ten to 15 per cent a year for children‘s products. Predictions for the licensing market as a whole is for growth by 18 to 24 per cent a year over the next three to five years.
Over the past decade, retail trade in Russia has grown at a blistering pace, increasing six-fold to reach a total value of $621bn in 2011, according to the Federal Statistics Service. Retail sales are still growing strongly, rising 7.2 per cent in 2011 versus 6.3 per cent in 2010. From this year on, Russia is expected to start conquering consumer category after consumer category. In 2011, Russia became the largest market for milk and children's goods, and this year it is due to become the biggest dairy market. In 2013, the country will take the top spot for advertising and apparel and by 2020, Russia should be the biggest consumer market in Europe.
The current position of the licensing business can be likened to the USA 15 or 20 years ago and represents the perfect time for the international licensing industry to break into the Russian market. The international licensing business wants to find reliable partners for developing business in Russia and CIS, and companies from this region are likely to be increasingly recognised and more visible internationally.