Russians did not like DIY products from China

The expectations of participants in the DIY (repair and home improvement) market that after European brands leave Russia, most Russians will reorient themselves to Chinese brands do not seem to be justified. Only 3% of consumers now choose products from China, although in the first year of the crisis they were in the minority – 6%. Buyers are increasingly reorienting towards local goods. Experts attribute this to the relatively affordable cost of such products and the fact that the fewest problems arise with their retail supply.

At the end of 2023, the share of Russians choosing DIY goods made in China decreased to 3% versus 6% a year ago, according to a report by Rockwool (a manufacturer of building materials). At the same time, the number of buyers of Russian products increased to 35% from 17%. According to the company, the majority of consumers, as expected, pay attention primarily to the cost of materials: 35% buy more budget products for renovation and home use, and 15% buy the most expensive ones.

Interest in Russian goods in this segment is largely due to the high share of import substitution in the building materials segment: according to various estimates, foreign products account for no more than 10–12% of the DIY market.

Due to sanctions pressure, some specialized retailers replaced European goods with products from other countries. A survey conducted by Rockwool among buyers showed that 12% of respondents could not find familiar brands on the shelves, but the same number of respondents noted the emergence of new manufacturers.

An increase in the share of local products does not always mean that production has been completely localized: in a number of cases, foreign companies have actually transferred the business to new Russian owners, but the technologies and components remain foreign and continue to be imported through parallel imports, explains Pridex commercial director Alexander Oleynikov. For example, the assets of the Belgian Sibelco in the Russian Federation for the production of raw materials for building materials – sand and clay – were transferred to Vladimir Voronin’s FSK Group, and the cement of the Swiss Holcim is now produced in the country under the Cementum brand. In other cases, production was already in Russia, since it is expensive and unreasonable to import inexpensive goods with large dimensions from abroad, adds Maria Evnevich, a member of the board of directors of the Maxidom hypermarket chain.

China has not managed to occupy a significant share in the building materials segment in the Russian Federation, unlike the market of household appliances and electronics, confirms Ms. Evnevich.

This is explained by the fact that such companies, for the most part, have non-localized production and, as a result, higher logistics costs, especially to the European part of Russia – this affects the final price for consumers, Ozon notes. At the same time, Russian players are more flexible in their approach to changes in the market and the development of new sales channels, they add.

Consumer surveys do not always objectively “reflect the situation on the shelf,” argues Infoline-Analytics CEO Mikhail Burmistrov. He is confident that in the structure of supply on the building materials market, European manufacturers who left the Russian Federation have been replaced by Turkish and Chinese brands. For some items, including plumbing, paints and varnishes and power tools, there is still a high dependence on imports, adds Mr. Burmistrov.

Not only retail buyers have refocused on building materials of Russian origin. For example, in office decoration in 2023, developers used locally produced materials and equipment in 66% of cases, while a year earlier their share was 61%, Pridex calculated. At the same time, the share of European materials decreased from 30% to 24%, and Asian materials increased slightly – from 9% to 10%.

The popularity of local brands in the DIY market will continue to grow, which is due to more affordable prices and stable supplies and lower risks of counterfeiting, Ozon believes. Nowadays, most buyers are driven by the price factor rather than the origin or brand of building materials, agrees Maria Evnevich. Whatever the price tag, when choosing some building materials, being too thrifty can result in even greater costs and serious risks in the future, Rockwool warns.

The current situation in the DIY market will continue in 2024, says Mikhail Burmistrov. In his opinion, the main transformation in the segment was completed this year.

Daria Andrianova