Team Finland Future Watch Report

1. Future of
Russian
Middle Class
Daria Ivanova
St. Petersburg

2. Project goals
• To describe and define Russian
middle class in general figures
• To identify existing and forecast
most pronounced trends that will
be shaping Russian middle class
lifestyle in the future
• To summarize results in a report
and disseminate findings via signal
session or seminar.

3. Middle class – Definition
The middle class is a class of people in the middle of a societal hierarchy. It is the broad group of people in contemporary society who
fall socio-economically between the working class and upper class. The common measures of what constitutes middle class vary
significantly among cultures – Wikipedia.
Russian middle class are the people who have managed to
adapt their material life standards according to conditions of
modern market economy after collapse of Soviet Union.

4. Russian Middle Class definition & criteria
for the purpose of this project:
•
•
Own apartment / rented, acquired
using mortgage lending or inherited
Min 1 car in the family
Significant expenses are used for
services – education, insurance,
entertainment
Savings exist
•
Vacation abroad 1-2 times per year.
•
•
m
i
d
d
l
e
c
l
a
s
s
5 mio residents of St Petersburg
12 mio residents of Moscow
Share of middle class 15-20%

5. Cost of middle class living in Russia: 52 kEUR per year
(average family; parents & 1 child)
Apartment, mortgage or
rent
Children exp
13500
9750
Food
7500
Services
6250
Savings
3750
Entertainment
3750
Vacation
Euro per year
3750
Car cost (fuel, ins,
service)
3750
0
Information source: Finpro expert estimation
2000
4000
6000
8000
10000
12000
14000
16000

6. Middle Class Expenses Breakdown
100 %
90 %
80 %
7,2 %
5,7 %
7,2 %
9,2 %
5,0 %
18,8 %
18,7 %
70 %
60 %
12,0 %
50 %
7,2 %
40 %
30 %
6,4 %
Entertainment – going out to
cinema, theater, restaurant, cafe
Child – toys, activities,
education, baby-sitter
Services, fitness, healthcare,
education, telephone
17,0 %
Vacation
14,4 %
7,2 %
11,0 %
Food
Transport (1 car per family,
insurance, gas, repairs)
20 %
26,0 %
27,0 %
Russian middle class
10 %
Savings
Flat, mortgage or rent
Average Finn
0%
Information source: Statistics Finland. Finpro expert estimation

7. Family status
120
100
11
12
13
17
66
62
Moscow
80
St. Petersburg
60
40
No answer
Widowed
Divorced
Single
Couple, unmarried
Married
20
0
Information source: Synovate Comcon. Wealthy Consumer Lifestyle

8. Living conditions
120
100
80
2
10
7
3
10
5
60
40
74
77
Apartment from
government
Private apartment
Private house
20
7
5
Moscow
0
Room in the
apartment
Rented appartment
St. Petersburg
Information source: Synovate Comcon. Wealthy Consumer Lifestyle

9. Lifestyle
Finland
City population
Working hours
Russia
Helsinki
Helsinki – 1 mln
Moscow & St. Petersburg
Moscow – about 10 mln
8 a.m. – 4 p.m.
St. Petersburg – about 5 mln
9 a.m. – 6 p.m.
Approximate time of 7 a.m.
6.30 a.m.
leaving home
Approximate time of About 5 p.m.
After 8 p.m.
returning home
Vacation
30 days of annual leave converts to 28 days of annual leave
5 working weeks of vacation.
4 working weeks of vacation (as Sat &
In average 10 public holidays Sun are included).
annually.
In average 12 public holidays per year
Sick leave
2 months with retention of salary
First day of sick leave with retention of
salary (thereafter max 800 EUR
monthly compensation from public
fund)
Payment
for 80% by insurance (KELA), 20% by Usually 100% by patient
pharmaceuticals
patient
Information source: Synovate Comcon. Wealthy Consumer Lifestyle

10. Traffic – the time killer – getting worse
Desire
Reality

11. Lifestyle

12. Urbanization
Moscow 2013

13. Megatrends of today – shaping the future
'new entrants'
- middle class
is growing in
absolute
number
hectic pace
of life &
congestion demand for
services
time spent in
cyber space
mistrust in
Russian
service
providers
integration
of middle
class into
world
community

14. Mega trends of today – this is what middle class says:
We believe in
We pay for
European
service and
We want best
quality in
quality must
value for our
education,
be good – no
cash funds
food, medical
waiting time
and care
tolerated
We utilize all
possible
We have
online
access to all
services for
opportunities
purchasing,
now
contacting
and fun

15. Middle Class is growing
25
20
20
15
14
10
5
0
2012
2018
Middle class, mln., est

16. Cyber space
100
80
73 73
77 78
60
51 49
32
40
23
20
•
•
•
•
•
marketing
distance working
online shopping
travel
VKontakte.ru
0
Moscow
St. Petersburg
Middle class online shopping
Information source: Synovate Comcon. Wealthy Consumer Lifestyle

17. Hectic pace of life & increasing demand for services
Today - Tomorrow
10
Service spenditure in the budget, 2012
18
Service spenditure in the budget, 2018

18. Mistrust in Russian service providers
Middle class seems to appreciate foreign knowledge and know-how what comes to
pharmaceuticals & medical care, education & innovation . Parents invest in education
and recreation of children abroad. Medicine of foreign origin are perceived efficient.

19. Integration of Russian middle class into world community
Europeanizing and Globalizing

20. Future trends
•
•
•
•
•
•
rational consumption: sustainable instead of ‘bling-bling’
increased online shopping: local and global products and services
investing and purchasing real estate in Russia and abroad
desire for natural, healthy and clean food in Russia – respect for bestbefore-dates, nutrition for mothers-to-be
careful attention to health, sports activities, using services of beauty parlors
use of private medical services,

21. Trends might lead to following by 2018:
Ageing and yet active
Russian middle class
Demand for private
caretaking
Traffic congestion of megacities
Remote work
Increase in spending
High level of debt

22. Trends might lead to following by 2018:
Disappointment with life
quality
Emigration
Middle class in Russia
wants to interact with middle
class
Desired schools, home
address and services
Changes in educational
system
More private schools and
universities

23. Trends might lead to following by 2018:
Efficiency gains at
production sites
Shrink labor market
Demand for vocational
training
Eco-awareness has risen
Less waste and consumers
avoid heavy-packaging and
throw-away-items
More traveling for more
people, time limits
Express weekend trips

24. Future opportunities for Finnish companies
wellbeing &
healthcare
leisure &
travel
food &
diet
education

25. • health resorts & sanatoriums
• check-up and diagnostics centers
• mothers-to-be & mothers with babies
• family centers
• Nordic walking
wellbeing &
healthcare
leisure &
travel
food &
diet
education

26. • tailor-made tours (hunting,
fishing, golf, tennis, sailing,
skating)Green card for new
golfers
• honeymooners' weekends
• anniversary travel (photos)
• wine tastings
• mother & baby weekends
wellbeing &
healthcare
leisure &
travel
food &
diet
education

27. wellbeing &
healthcare
leisure &
travel
food &
diet
education
• short-term educational programs
for children
• further education for adults
• learn English in Finland (Finglish
for Russians!)
• 100 words of English during
weekend

28. wellbeing &
healthcare
food &
diet
• baby food, bio-products
for children and for
mothers-to-be, super
food
• traffic snacks & survival
kits
• quick gourmet
leisure &
travel
education

29. Thank you for your attention