Made on
Tilda
August 8, 2023
Communication in Russia
Russians speak quite matter-of-factly and are generally comfortable with directness. In written communication, try to get to the point with the first phrase. Rarely will a business owner or CEO read a letter to the end unless he or she has seen valuable information in the first 3-4 sentences. Be able to fit your key idea into a short letter.
In Russia, it takes longer than 24 hours to respond to emails. Give your contact person 3 days to respond if this is your first contact.
Don't text WhatsApp messages at night - google what time it is in the country where your partner is. Late messages are acceptable only with close business partners whose late working hours you know.
Russians respect work and life balance - don't text business messages after 7 pm and at the weekend.
In face-to-face communication follow etiquette rules - give a compliment for women, if you met at the airport, offer to help with the suitcase, etc. - this will break the ice.
Topics of corruption, oligarchs, shortcomings in the social system, and criticism of foreign or domestic policies are not acceptable. Russians like to criticize their government and authorities, but they don't like to do it with citizens of foreign countries. In Russia, there is a saying - don't wash your dirty linen in public. Don't discuss Russian internal problems with business partner.
Russians respect math and do not like lengthy discussions at the first stage of negotiations. Show where is money in your proposal without long talks, then go to the details. Talks about philanthropy and green economy begin after the primitive accumulation of capital - not relevant to Russia.
In doing business in Russia, time is money. Not regarding the hour price, but because environment in Russia has historically changed quickly. I think that's why Russian businessmen are quick-thinking, savvy, and improvisational. Russians have high financial discipline in closing deals and very friendly business culture if you arouse interest and trust.
Don’t speak about vodka. Russia has not been among the leaders in alcohol consumption for a long time, and joking about vodka with unfamiliar people make them thinking about your backwardness. During the negotiations Russians drink water and green tea / coffee.
As a rule Russians are distrustful and unsmiling at the beginning of communication. But if you win their trust, you will find out that they are very warm-hearted people, ready to help, with a beautiful soul, traditional values, very sincere and straightforward.
If you plan to work in Russia, set up WhatsApp. It is the most widespread messenger in Russia with 76 million users. They don't use Telegram for business chats, only for reading channels.
Russia is a high-context culture. To be understood correctly, try to be specific.
Observe and listen carefully before you speak.
Russia's foreign debt as of January 1 was $381.8 billion, a decrease of $100.4 billion over 2022 - Central Bank of Russia
Value of bank deposits of individuals in Russia amounted to 37.8 trillion rubles as of December 1, 2022 ($0,54 trillion). This is 1.4 trillion more than a year earlier.
Russia ranked fourth in the world in terms of gold and foreign exchange reserves by the end of 2022.
China remains the leader in terms of this indicator for the 17th year in a row. Japan ranked second and Switzerland third, - RIA Novosti.
Avtovaz acquired Nissan assets in Russia from NAMI for 1 euro.
American International Paper, the largest foreign investor in the Russian timber industry, has agreed to sell assets. The company announced that it would sell 50% of Ilim Group to Russian partners for $484 million. International Paper bought that share more than 15 years ago for $650 million.
Novatek signs memorandum with Deepak India on cooperation in LNG and low-carbon ammonia supply.
The creation of a pharmaceutical cluster, which should provide import substitution in medicines was announced in Moscow. In particular, 80% of the country's needs in cancer drugs will be covered.
At the site of SEZ "Technopolis Moscow" in Zelenograd will unite 9 leading Russian pharmaceutical companies. Six production facilities have already been launched, 9 more are in the process of construction. The volume of drug production will grow 15-fold in just a few years.
Business will invest more than 25 billion rubles in the creation of the cluster, about 3 billion will contribute to the mayor's office and the Russian government in the form of soft loans and subsidies. Also, Moscow has signed offset contracts with manufacturers, they guarantee the supply of products produced for the state needs.
Russian airlines continue to buy aircraft from foreign lessors. The fleet of Russian airlines is 1,164 aircraft, it fully meets all the demand - Head of the Ministry of Transport
Belarus legalized parallel imports.
The share of the dollar in Russia's international settlements in January showed the lowest value since last February - 40.12% of international settlements.
Federal Customs Service of the Russian Federation: The main trade partners of our country in 2022 were China, Turkey, Netherlands, Germany and Belarus.
The trade turnover with China increased by 28%, with Turkey - by 84%, with Belarus - by 10%. The trade turnover with the Netherlands slightly decreased - by 0.1%, with Germany decreased by 23%.
The U.S. share in Russian foreign trade in 2022 was less than 2%.
The Russian market of cut flowers shows a positive trend of import substitution. Over the past 5 years, florists have used mostly imported products, the figure reached 90%.
But in 2022 the share of Russian flowers has risen to 18% and the gross output was 400 million pieces. By the end of 2023 this figure could reach 500 million pieces.
Russia is conducting a radical revision of all its obligations to international organizations that have shown a discriminatory approach - Sergey Lavrov.
The United Aircraft Corporation is planning to recruit 12 thousand specialists in connection with the ambitious plans to build domestic civilian aircraft, the press service of the State Corporation told RIA Novosti. Rostec noted that the company is to provide the country with aircraft of its own production, including the delivery of about 500 airliners by 2030.
"This is a huge order, additional personnel are needed to fulfill it. In the coming years, the UAC alone plans to employ 12,000 specialists at its enterprises," - the press service.
*There is a shortage of qualified engineering staff in Russia.
Vladimir Putin signed a Decree No.16 of January 17, 2023 establishing a temporary procedure for decision-making in large Russian joint-stock companies in the energy, machine-building and trade sectors. Their management bodies will be able to make decisions without taking into account the votes of shareholders from unfriendly countries.
The temporary procedure will be effective until and including December 31, 2023. The decree enters into force from the day of its official publication.
One example is the actions of the Finnish energy holding Fortum, which still partially owns the largest energy companies in Russia. The Finnish holding blocks decisions on dividend payments.
Japanese natural gas distributor Osaka Gas has signed a contract to supply 200,000 tons of LNG with the new Sakhalin-2 operator.
Iran and the EAEU signed a memorandum on free trade.
The share of trade between Russia and China in national currencies has reached about half of the turnover, it will increase. - Sergey Lavrov.
____Russians are switching to domestic video conferencing services. In 2022 mobile traffic of foreign video conferencing platforms fell by 19% compared to 2021, while Russian traffic increased by 41%.
The biggest drop was shown by Webex - 81%, Microsoft Teams - 39%, Google Meeting - 36%, Zoom - 16% and Skype - 10%.
The biggest growth came from Webinar Group - 44%, Yandex.teleconference - 32%, and VK.calls - 23%.
Deposits of Russians in foreign banks abroad, according to the reports of November, reached a record $81.7 billion, having jumped 2.7 times since the beginning of the year.
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Putin said that Russia will not give up the dollar, but will dramatically reduce its shares.
Already a third of all mutual settlements with other countries are made in rubles. Which countries were the fastest to switch to roubles?
Turkey
Turkey is already paying for Russian grain in rubles. They started paying for Russian gas back in November, the republic's energy minister Fatih Donmez said. Ankara will pay 25% of the blue fuel supplied by Russia in rubles.
India
India and Russia fundamentally refuse not only the dollar, but also the euro in their mutual settlements.
Nine Russian banks have already opened special accounts in India for settlements in rupees. This will make trade transactions much easier. After all, at the beginning of the year, when Russia refused to use the dollar, Indians were paying for Russian coal even in Hong Kong dollars and UAE dirhams.
China
The biggest share in Russia's mutual settlements is the yuan. In November, China and Russia agreed on a full transition to national currencies in energy payments.
Russia also uses yuan in trade with third countries. For example, Uralchem, a producer of mineral and potassium fertilizers, sells its products to Brazil for yuan.
EAEC countries
Most Eurasian Economic Union partners are also abandoning dollars and euros in trade with Russia. For example, Kyrgyzstan has already completely switched to payments in rubles, said Minister of Economy Daniyar Amangeldiyev.
All the agreements on switching to national currencies will fully work only next year. This gives us reason to expect that the ruble will strengthen significantly.
The State Duma proposes to liberalize access to the Russian currency exchange for banks from friendly countries so that Russian importers could buy foreign money cheaper. This will make imported goods cheaper, - chairman of the State Duma Committee on Financial Market Anatoly Aksakov. The bill passed in the first reading
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Russia and Iran will invest $20 billion in the development of the North-South corridor, which will facilitate trade with India.
Russia will invest $1 billion to modernize the Volga-Don route, which will allow it to include southwestern territories in its transport network.
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Luxembourg Ministry of Finance allowed to unfreeze Russian assets - funds of Russian brokers frozen in the Clearstream depository in the amount of €4.3 billion. The Ministry of Finance has given 10 working days for the transfer of assets.
The second part of funds of Russian brokers are frozen in the Belgian depository Euroclear.
The European depositories froze assets worth nearly ₽6 trillion, mostly the money of private investors - ordinary Russians who believed in the stock market. Russians invested in stocks, Eurobonds and other securities. It looks like a profitable business for freezing foreign assets - the income from the securities (in particular, dividends) are received not by the Russians, but by the European financiers.
Only Euroclear alone has earned on Russian assets €340 million till early October. This is half of all investment income of Belgian financiers.
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Trading on the Moscow Exchange has exceeded 1 quadrillion rubles since the beginning of the year. This is more than the whole of last year - and this despite the fall of the Russian stock market.
The Moscow Exchange index fluctuated during the year from 3,815 points at the beginning of January to 1,944 at the beginning of October.
There was only one IPO - that of scooter rental company Whoosh. The company was able to raise just over ₽2 billion - half of what it had planned at the start.
Since the beginning of the year, almost ₽5 trillion worth of bonds have been placed on the Moscow Exchange, with almost ₽3 trillion worth of federal loan bonds (OFZ). Their main buyers were the banks financed by the Central Bank.
A new type of securities became ‘substituting bonds’: Russian companies placed them instead of Eurobonds. Gazprom, Lukoil, Sovcomflot and others did so.
There are about 23 million private financial investors in Russia now. Every seventh inhabitant invests free funds in the financial market.
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Henkel AG intends to spin off its Russian business into a separate company.
Henkel's Russian enterprise will change its name to Lab Industries and will operate independently from the German group starting in January.
The Lebanese company Daher, a buyer of Inditex Group's domestic business, will create local clothing brands specifically for Russia. Some of these products will be sewn by domestic enterprises. Eight Inditex brands are represented in Russia: Zara, Zara Home, Bershka, Pull & Bear, Massimo Dutti, Oysho, Stradivarius and Uterque.
The possibility of importing medicines in foreign packaging into Russia has been extended until the end of 2024. Such permission was previously valid until December 31, 2022.
The work of the former Nokian Tyres plant in the Leningrad region will resume in the second quarter of 2023 with a new owner, - the governor of the region Alexander Drozdenko.
Rosatom has submitted tender documentation for the construction of a Saudi Arabia’s first nuclear power plant.
Despite the sanctions, wine imports to Russia fell by only 6% over the year. The market share of the suppliers who left were quickly taken over by competitors, often from the same European countries.
Italy remained the main supplier. It reduced imports (-4%), but still has twice as much market share as its nearest competitor.
Second place was shared by Georgia and Spain, followed by France and Portugal.
Russia increased its own production by 10%.
The Central Bank will not fight the outflow of currency abroad. The Central Bank will focus on creating "normal market motivation" for the return of these funds. - Elvira Nabiullina, Chairman of the Central Bank
Tourist flow from Russia to Europe decreased by 95% - ATOR.
The Ministry of Finance is ready to discuss the exclusion of the UAE from its black list of offshore jurisdictions only after the introduction of income tax in the country. Russia has already sent an official request to the UAE on this topic - Alexei Sazanov, Deputy Finance Minister.
The Ministry of Finance is forming a list of low-tax jurisdictions that are used for offshore ownership of Russian assets.
Last year Russia adopted a law that prohibits companies that are 25% or more directly or indirectly controlled from these offshore jurisdictions to use state support.
China and India will be Russia's main partners in the Arctic in the coming decades. This is the forecast made by the Ghent Institute for International Studies.
The Chinese are investing in the largest LNG projects. Investments made by offshore Penglai Jutal and Tianjin BOMESC, as well as state corporations. The Chinese own 10% in the petrochemical giant Sibur.
Sinomec Corporation has invested in alternative energy in Karelia: windmills and geothermal stations.
China is going to invest in the most important ports of the Northern Sea Route - Arkhangelsk, Sabetta and Murmansk.
China acts in the Russian Arctic not only as an investor and consumer of services, but also as a military partner. Russia and China have been conducting the largest Arctic exercise in history since 2018.
India has significant interests in the Arctic. The targets for India's Arctic investments are the Northern Transit Corridor, the Arctic LNG-3 project, Taas-Yuryakh Oil and Gas Production and Vankorneft.
* The Arctic holds 25% of the world's hydrocarbon reserves. According to the Russian Gas Society, the territory of the Polar Region is 2% developed in terms of production. The economic value of the region is in the production of natural gas: 80% of the total Russian volume is extracted here. Second most important is the mining industry, in particular non-ferrous metallurgy: nickel, copper, gold and platinum. The Arctic produces diamonds, phlogopite, apatite, 100% of antimony. Fishing industry. 30% of fish and seafood is caught in the Arctic.
China will completely abandon the dollar in payments for oil and gas. It will pay in yuan, Chinese leader Xi Jinping said during a visit to Saudi Arabia.
The raw materials will be traded for yuan on the Shanghai Energy Exchange.
Xi wants to make the yuan the world's main currency.
Russia has been without a dollar for almost a year. Dollar reserves are frozen. China, Russia's main foreign trade partner, pays for Russian oil, gas, and grain in yuan.
Brazil also pays in yuan for Russian fertilizers. The trade turnover between Brazil and Russia since the beginning of 2022 was $8.8 billion as of November.
Turkey and Iran will soon start using yuan in trade with Russia.
The yuan's flow to Russia will grow along with the growth of commodity supplies. Gazprom has announced that in December alone there were several historical records of gas supplies to China.
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A big event happened in the Russian industry some weeks ago. The BN-800 reactor was brought to nominal power level with a full load of innovative mox fuel and a closed nuclear fuel cycle.
This means that the Russians created the eternal nuclear reactors. The fuel is recycled and reused. An example of the atom for the benefit of Mankind.
Alexander Ugryumov, Senior Vice President for Scientific and Technical Affairs at TVEL said completing conversion of BN-800 to mox fuel is a long-awaited event for the nuclear industry. “For the first time in the history of the Russian nuclear power industry, we will be able to operate a fast neutron reactor with a full load of uranium-plutonium fuel and a closed nuclear fuel cycle. This is exactly the milestone for which the BN-800 was originally designed, a unique nuclear power unit supported by automated fuel production at the Mining and Chemical Combine.
Great news. The Russian scientists create the future.
____The Russian Ministry of Finance is ready to consider the liberalization of cash currency imports into Russia.
The Government has formed a pool of 162 projects in critical import substitution areas worth a total of 5.2 trillion rubles until 2030. - First Deputy Minister of Industry and Trade Vasily Osmakov.
2.3 trillion rubles out of the total amount of planned investments will be provided in the form of soft loans, the rest 2.9 trillion rubles will be investor funds.
The federal budget for 2023 earmarked 5 billion rubles for subsidized rates for import substitution projects, as well as government guarantees.
The Ministry of Economic Development proposed barter trade with non-paying countries. The department suggested to work out the issue of whether this would require changes in the law.
The withdrawal from the Russian market has cost Western companies $240 billion. These are losses from unprofitable deals to sell the business and other force majeure losses. Large Western companies can easily cover these losses, but the figure of $240 billion is indicative of the scale of shifts in the market. 75% of these brands are on the list for parallel imports.
The former Russian subsidiary of Tetra Pak has resumed production of full-color packaging in Russia. The plant in Lobnya, Moscow Region, is operating smoothly, the company’s press service reported. (earlier they reported problems with the supply for color printing).
Exports of goods from Iran to Russia have increased by 70% over the last six months.
Trade between Russia and Brazil is reaching a new record despite the sanctions. Last year it was $7.5 billion. At the end of 9 months of 2022 the trade turnover has already reached $7.2 billion. Brazil itself has not imposed sanctions against Russia, but other countries' bans have led to problems in payment, insurance and logistics, which both sides are rather bracingly solving.
The need for import substitution in road construction is acute. The approximate ratio of domestic and imported equipment today is 70 to 30%, where 70% is imported equipment.
Domestic share is high enough for some types of road construction equipment, for example, dump trucks makes 60%, motor graders 70% and combined road machines 90%. The share of domestic road construction equipment in some positions, however, is low: backhoe planners - 7%; road rollers - 20%; drill and pile-driving machines - 28% of the market. There are also such equipment which is not produced in Russia at all - road cutters, recyclers, wide grip pavers.
Fishery Union fixed a sharp fall in salmon prices in Russia due to the resumption of logistics of supplies from Chile, as well as increased imports from other countries.
There are problems with the supply of musical instruments in Russia, including grand pianos. The issue of import substitution here will not be solved even in ten years, - market players.
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The largest Russian marketplaces are going to increase revenue by an amount comparable to the turnover of the 20 offline stores which have left Russia. Such brands include Adidas, Puma, Zara, H&M, Massimo Dutti, Christian Dior, IKEA and Uniqlo. Their trade turnover amounted to almost 1,54 billion USD - this amount can be distributed between marketplaces, which will start to bring brands products on a parallel import schemes.
Computer prices are almost back to February prices. Russian stores began to sell MacBook laptops imported in parallel. Moreover, there is no difference in price between "white" laptops imported before the sanctions and "parallel" MacBooks. The volume of guarantees is the same - only in the first case, they are given by the manufacturer, and in the second - by the seller.
By the end of the year in Russia it will be possible to sell some gadgets without pre-installed Russian software - the Ministry of Finance. The Ministry suggested introducing a moratorium on penalties for such sales of devices until the end of the year. The corresponding bill is ready.
Resource of construction equipment available in Russia is designed for a maximum of 3 years, it is necessary to provide a plan for its import substitution due to the strong dependence on the West - Deputy Prime Minister Marat Khusnullin.
The Government has provided an unprecedented amount of import financing for metallurgy, automotive industry, chemical and pharmaceutical industry, the total amount of the program – 12,5 billion USD - Maxim Reshetnikov.
The volume of yuan trading on the Moscow Exchange exceeded the volume of euro.
The State Duma passed in the third reading a law which would allow to limit dissemination of information about transactions of Russian participants of foreign trade activities, to help them to avoid restrictive measures against Russian companies by the West.
The State Duma passed in the third reading the law to increase the threshold for cash transactions subject to mandatory control by Rosfinmonitoring from from 9230 to 15390 USD.
Maritime traffic between Russia and Turkey opens in Sochi on July 16.
Forbes estimates his fortune at $3.5 billion in 2021. I hope it will be insightful for everyone who wants to enter the Russian market.
There is no one perfect country for doing business. Where there are good conditions, there are small opportunities. Where there are a lot of opportunities, conditions are an issue.
Yes, we have 10 million customers a day. Considering they're families, that's 25-30 million people coming in every day. But it's a real race for customers. We have very strong competitors.
When we cut the price for bananas by 1 ruble, we sell 100 tons a day more. There are people who live within their budget.
Cucumbers last 7-8 days. We had losses of up to 50% in the winter. So we were forced to start our own production. Now we have the biggest greenhouse in Europe (80 ha).
We do not have more than 10% direct imports. It is not a very significant segment of Russian retail.
Thanks to the government, they did not impose sanctions immediately, we had time to readjust. We added Central Asia, Iran, and found products in other countries [2016].
We've been opening three or four stores a day for over three years now. It seems amazing, even to us.
In order not to be disappointed, you don't have to be fascinated. In business, every day is like a war.
I don't see anything Wal-Mart can do that other retailers can't.
The miracles ended two thousand years ago. If the price is lower, the quality is lower. We have to be objective and be honest about it.
In business, you have to not be afraid to go out every day with an open mind and have a chance to lose everything. When you are afraid to lose everything, you have to admit that you no longer have the will that you had.
I only believe in daily, hard work. It's not self-learning. It's just hard work. And whoever spends more time on it has more effect.
Over time, I began to realize that I began to lose speed. At some point you have to tell yourself that operational management, with the intensity you've had for the last 25 years, is no longer for you.
In business, the element of logic is incredibly important. Chess is a good game model of logic. You should also fantastically love what you do and have an incredible sense of purpose.
Entrepreneurs are a special biological breed. Two, four percent at the most, have entrepreneurial potential. In our country, whoever thought they needed more money in this life declares themselves an entrepreneur, and when it turns out they're not ready for these risks and these stresses, they start complaining about the FSB or conspiracies by government agencies, just like a person who complains about the weather.
I could do nothing without the team, I'm just an ordinary man.