An annual study on Russian spending abroad based on analysis of a large volume of statistics on credit card transactions and a forecast of spending abroad through the end of 2013.
According to Citibank's data, approximately 24% of credit card spending is made abroad. Representatives of the Russian middle class continue to increase their spending outside the country and this year will spend a total of $1.7 trillion rubles, with approximately 500 billion rubles of this spending going through Russian tourist agencies.
This represents an increase of 13% from the previous year. However, experts note a slowing of spending growth across a number of areas and categories, which means that the growth trend it not likely to continue far into the future. It is expected that spending will stabilize near current levels while the structure of this spending undergoes certain transformations.
The research shows that spending abroad does not necessarily imply traveling abroad. As it turns out, approximately one-half of Russians' foreign purchases were made via the internet, and the share of online purchases in foreign spending is expected to continue growing. This is a sign of changing preferences in payment methods for conventional spending categories — today people are purchasing via the internet items which just yesterday they would only buy in person.
Yuri Topunov, Credit Cards Business Manager at Citibank, noted that «what happened several years ago with airplane tickets that were acquired directly with airlines' offices, which today are purchased online practically 100% of the time, is happening right now with other spending categories. Take for example the major foreign spending category of hotels, which last year were paid for in person two-thirds of the time. This year hotels are booked and paid for in advance via the internet two-thirds of the time.»
However, the study also revealed another internet trend in the opposite direction. Earlier consumers turned to foreign internet stores largely because they could not find analogous goods and services in Russia. Now the majority of the major world brands of internet sales are opening offices in Russia or beginning to trade in rubles and the settlements are carried out inside Russia. Moreover, an increasing number of Russian analogs are appearing on the web, competition is growing and market niches are beginning to fill up. «According to our data, Russian online stores are already covering more than half the demand, so we are not ruling out slower growth in this area of foreign spending in the years to come», Yuri Topunov said.
The stabilization trend is also confirmed by the fact that the geography of spending changes only slightly from year to year and on the whole reflects the growing role of international internet trade. For example, Luxemburg, which is a concentration center for many major international internet stores thanks to its friendly tax regime, has entered the top 10 most popular countries for spending abroad by Russians, although actual Russian visitation of this country is incomparable small.
Spending in Luxemburg is also practically unaffected by seasonal fluctuations, in contrast to the majority of other popular destinations. Statistics show that spending abroad is lowest in December and highest in January, July and August, which corresponds to the tradition holiday and vacation periods for Russia. Great Britain is popular in the autumn and spring while continental Europe is popular during the summer and January sales seasons. UAE is popular only during the cold time of year and Spain, to the contrary, only during the hot season. The United States, which is the leader in terms of foreign spending both online and offline, has seasonal peaks which coincide with school holidays in Russia.
Interestingly, men account for two-thirds of both online spending abroad and general spending abroad, although the share of women is increasing slightly with each passing year. The age trend of Russian buyers abroad largely correspond with general Russian demographic trends: the share of youth is contracting and the share of those over 40 years old is increasing.
The most popular spending categories for Russians' foreign spending regardless of destination remain the same: airplane tickets and hotels.
The most developed market for foreign purchases remains the United States: practically everything is purchased there. Such European countries as Italy and France continue to be popular destinations for people purchasing clothing and footwear while in Switzerland this list includes watches and in Great Britain — spending on education. In Israel there is a high demand for medical services while in other countries of the Middle East people are drawn to jewelry, which is the most costly spending category in terms of average transaction volume. At the popular winter resort destinations of Europe, such as Austria and Finland, sporting goods are always in high demand. A more detailed presentation of the results can be viewed via this link
.Methodology. The research is based on statistics on credit card purchases made by Citibank clients. The study analyzed the monthly data over the period of January 2007 — June 2013, inclusive. The sample for 2013 included no less than 500,000 clients selected randomly, aged 22 or more and with a monthly income of more than 9,000 rubles residing in 11 cities (Moscow, St. Petersburg, Volgograd, Yekaterinburg, Kazan, Nizhny Novgorod, Novosibirsk, Rostov-on-Don, Samara and Ufa). Data for the first 6 months of 2013 and the statistical trends for the past three years were used to build a forecast for the full year 2013. This methodology largely coincides with the methodology used in the 2012 study.