Consumers' behavior reshaping investment tactics
Year of Shift: 2024
Last year, Russia witnessed a revolution in spending habits. Per the SberIndex study, Russians demonstrated record-breaking income and spending levels in 2024. The average per capita spending surged by 6% after adjusting for inflation, and savings soared, with a whopping 12 trillion rubles added to deposits.
Larisa Romanovskaya, a venture investor and expert on smart consumption, sheds light on this transformation: "This isn't a return to the 'spend now' mentality. Today's Russians are spending differently – smarter, more thoughtfully, prioritizing quality, service, and long-term benefits. We're witnessing a new era: rationality is no longer a necessity, it's a choice."
The Russian consumer is gearing up for spending but in a mindful, value-focused manner, not influenced by brands. These days, rationality, transparency, ESG, and digitalization aren’t merely buzzwords; they're driving forces shaping the Russian consumer market. For venture investors, this presents a golden opportunity.
The Rise of Conscious Consumption
In today's world, rationality isn't just about saving for necessity's sake, but making conscious, thoughtful choices. As awareness of environmental concerns and social responsibility increases, consumers increasingly favor brands that embrace transparency and care for the planet. Below are three key areas where demand is already taking shape, paving the way for new business models:
A New Way to Consume
The shift from impulse purchases to considerate, functional solutions is fueling demand for platforms that help make informed decisions. There's growing interest in services that facilitate comparisons, durability assessments, and real product value estimations. The 'ownership' model is being replaced by the 'usage' model, as the popularity of subscriptions, rentals, and the sharing economy continues to grow.
ESG and Locality as Trust Factors
Today's modern buyer desires transparency. They want to understand the entire production process, from working conditions to packaging – it's no longer just ideology; it's a market requirement. Local brands that communicate environmental friendliness, transparency, and community involvement gain an edge over global brands that appear detached. businesses that can show their human side – through storytelling, openness, and regional connections – are highly valued.
Next-Gen FinTech: Strategy over Control
Financial Maturity: A New Market for Smart Solutions. The rise in financial maturity among consumers is creating a vast market for innovative financial tools. Apps that assist not only in tracking expenses but also in building daily financial strategies, from savings to micro-investments, are gaining traction. Consumers are demanding more engagement from fintech: educational content, personalized advice, gamification elements. Finances are no longer boring – and that's an opportunity for the next generation of fintech products.
Investors: The Time is Now
According to Larisa Romanovskaya, these changes in consumer behavior aren't just an intriguing sociological trend for investors, but crucial indicators that should influence investment decisions: "Investors should look for teams that can create value not just economically, but emotionally, ethically, and educationally. Rationality is about maturity and trust. Businesses that understand this reap the benefits of new demand."
Investment Priorities:
- B2C fintech platforms focused on budget micro-planning, automatic investments, and financial education.
- Projects in the low-waste and zero-waste areas, including packaging solutions, reuse services, and closed-loop logistics.
- Digital storefronts for local brands that integrate storytelling, product origin analytics, and engaged communities.
- Platforms for mindful consumption, where products are matched to specific needs, not marketing noise.
The reset point of 2024 signals a shift in the Russian consumer market. Their behavior is sending clear market signals. Rationality is a long-term trend. Investors should seize the moment – observe, analyze, and enter niches where value isn't just profit, but trust. The market is seeing more startups capitalizing on this – from eco-friendly shopping apps to AI-based financial literacy services. Many of these are at the seed stage and seeking capitalization.
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[1] National Projects and Strategic Sectors in the Russian Venture Market: https://sberprize.ru/ru/[2] The State of the Russian Venture Market: https://rb.ru/investments/2022/06/30/investiciye-v-kiberinteh-strakhovanie-finansovie-uslugi-mogut-vybivat-centerom-dobychi-na-rost-znyattiya-nedvizhimosti.html[3] Private Capital and Early-Stage Investments in Russia: https://kpmg.com/ru/ru/issuesandinsights/articlespublications/pulse-of-the-market—q2-2022-fundraising-report.html[4] The Next Frontier of FinTech Investments: https://www.finextra.com/blogposting/20843/fintech-investments-2022-payments-become-bigger-focus-for-global-venture-capitalists[5] The Russian Venture Market in 2022 and Beyond: https://twocircle.eu/russian-venture-market.html
- Larisa Romanovskaya, a venture investor, asserts that the rise in rationality among Russian consumers is leading to a conscious, thoughtful approach to spending, prioritizing quality, service, and long-term benefits, creating a new era of smart consumption.
- In line with this shift, businesses focusing on B2C fintech platforms, low-waste and zero-waste areas, digital storefronts for local brands, and platforms for mindful consumption are expected to be market favorites.
- Investing in projects that create not only economic value but also emotional, ethical, and educational value is crucial for investors, according to Romanovskya, as these businesses understand that rationality is about maturity and trust.
- The popularity of subscriptions, rentals, and the sharing economy, as well as growing interest in services offering product comparison, durability assessments, and real value estimations, indicates a shift from impulse purchases to considered, functional solutions.
- ESG and locality are becoming crucial trust factors for modern buyers, as they desire transparency, environmental friendliness, and community involvement in the brands they support, providing an edge to businesses that can effectively communicate their human side.
