The opening of Detsky Mir’s new flagship store could appear ill-advised in a country whose economy has been crippled by political tension and flagging economic growth, but Russia’s leading children’s goods retailer, whose name translates as “Children’s World,” knows that if there’s one thing Russians are willing to spend on, it’s their children.
“People in Russia don’t scrimp on their children. This sets us apart from other countries. If we look at the last financial crisis, in 2008, the market of children’s goods didn’t fall at all,” said Maxim Kryukov, director of Detsky Mir’s retail support department.
Even as the Russian economy shrank by 0.1 percent in June and 0.2 percent in July year-on-year, the market of children’s goods has continued to grow.
Detsky Mir’s revenues in the first half of this year reached 18.1 billion rubles ($500 million), a 27 percent increase compared with the same period last year, with total profits rising by about 25 percent to $175 million, according to the company.
As for the industry, 11 percent growth for the year is now well within reach, said Antonina Tsitsulina, president of the Children’s Goods Industry Association.
Unfazed by falling consumer confidence, Detsky Mir has continued with ambitious plans to add more than 50 stores to its network over the course of the year, topping 300 stores nationwide and seizing 10 percent of the market by New Year’s.
The opening of the store on Ulitsa Vozdvizhenka, which aspires to become the Russian equivalent of such retailers as Hamleys or FAO Schwarz in New York, also reveals a confidence that vital ties with foreign business will remain strong.
The market of children’s goods in Russia is deeply and visibly globalized. Disney’s Mickey Mouse and Snow White rubbed elbows at the event with such Soviet icons as big-eared Cheburashka and his crocodile friend Gena, while foreign majors like Lego, Disney and Barbie took pride of place.