The Analytical Center has released the 3rd annual Report on the state of the competition environment in the country. The report uses the findings of a poll conducted by the Analytical Center and the Chamber of Commerce and Industry of Russia in January through February 2016. 1,500 companies from 84 Russian regions took part in the poll. About 80% of the polled companies can be classified as small businesses, micro-companies with annual sales of up to RUB 120 million, employing up to 100 staff members. 2/3 of the respondents represented their own business that has been in the market for more than 5 years.
Half of respondents (51%) said the competition in the Russian markets was moderate, which is comparable to what a similar poll found in 2015 (53%) and significantly lower than in 2014 (73%). At the same time, the share of those who believe competition is weak or completely non-existent has gone up once again: in 2016 the respondents holding this view made up 24% of the total, while in 2015 their share was 21%, and in 2014 it was just 5%.
Experts note that businesses have to deal with the highest levels of competition in the food production industry, in IT, in the production of construction materials and non-metal products. Competition is the weakest in the lumber processing, pulp and paper industry, and in the fuel and energy sector.
24% of the respondents said the number of their competitors had dwindled. Some respondents (42%) attributed that to Russian companies leaving the markets. 41% of the respondents pointed to anti-competitive moves by the authorities, while 32% said the latest changes in laws and regulations had had a negative impact on competition. In the transport engineering sector 100% of the respondents noted that foreign competitors had left the market, in the chemical industry 71% noticed that foreign competition was leaving, 64% of electronics and optical equipment manufacturers mentioned a decline in foreign competition and 43% of mechanical engineering companies also noticed this trend.
56% of the respondents believe that the key problems that still keep getting in the way of business are poor access to financial resources, including because of prohibitively high interest rates on bank loans.
Russian businesses continue to actively expand their operations. Manufacturers of non-metal products, electronics, and optical equipment have been the most active in this area: over 90% of them said they were planning to expand into new markets. On the whole, though, the poll demonstrated that Russian companies lack the financial resources needed to expand into new geographical and product markets; they are hamstrung by the high initial costs of setting up a business and by the saturation of the markets around the country.
Businesses across all sectors of the economy are trying to make their products more competitive. 97% of the respondents said they had used at least 1 method to improve the competitiveness of their products in the past 3 years, 79% have used at least 2 methods and just 3% said they had not done anything to make their products more competitive.
For more see the report “Assessing the Competitive Environment in Russia”
Report for 2015
Report for 2014