DIY market in Russia: trends and prospects
The Russian DIY market has undergone a significant transformation following a period of turbulence. Find out more about the Top 5 trends in the Russian DIY market
Over the past two years, the Russian DIY market has undergone significant evolution. Market participants have demonstrated resilience in adapting to the evolving business environment, identifying new avenues for product distribution. The expansion of the DIY segment has also been driven by the growth in sales of these products on major marketplaces.
Statistics and trends in the Russian DIY market
At the beginning of 2024, the total value of the Russian DIY market was estimated at RUB 6.8 trillion. These figures were sourced from research conducted by INFOLine experts concluded that almost half of this market (RUB 3 trillion) was accounted for by the B2B segment, RUB 2.4 trillion was accounted for by furniture, home and garden goods in the B2C segment, and RUB 1.4 trillion was accounted for by construction and finishing materials in the B2C segment. It is worth noting that the dynamics of DIY trade turnover in 2023 grew by 11.6% against 2022.
By the end of 2023 and the beginning of 2024, the share of the top ten universal chains in the DIY market was 38.6%, representing a 3.4% decline from 2022. Concurrently, the collective sales of the top ten players increased by over 11% to RUB 1.3 trillion. Notably, marketplaces exhibited the most pronounced growth, with sales rising 2.5 times to reach RUB 285 billion. Megamarket demonstrated the most substantial advancement, with sales growing 390% and securing a position in the top ten, displacing AliExpress.
In this article, we will examine the trends observed in the DIY market in 2023. The most significant trend is the continued growth in demand for these products. There is a clear rationale for this. Given the circumstances, many consumers have opted to continue with planned repairs. According to data from NAFI, 44% of respondents carry out their own repairs and also purchase materials independently.
Another emerging trend in the domestic DIY market is the increasing prevalence of own-trade marks (OTMs). This is particularly relevant in the context of rising product prices, with a number of buyers focusing less on the brand and more on the price-quality ratio. The results of Yandex research substantiate this trend. In 2023, 80% of respondents selected products from manufacturers they were unfamiliar with, while only 30% sought specific brands. Another notable example is the product line of Lemana Pro (formerly Leroy Merlin), which encompasses kitchens, finishing materials, and tools. Similar product lines have emerged at other prominent retailers, such as the Petrovich chain.
The third trend in the Russian DIY market is the increasing use of omnichannel strategies, with 57% of customers purchasing DIY goods both online and offline. There has also been a notable growth in both offline and online sales. This is supported by Yandex's research, which found that in 2023, there was a 47% increase in interest in building materials shops on their mapping service, a 34% increase in interest in home goods, and a 26% increase in interest in various sanitary ware.
The fourth trend in the Russian DIY segment is the clear distribution of sales by product type between marketplaces and niche hypermarkets. Marketplaces are mainly used for the purchase of oversized and lightweight goods (including décor and interior solutions), while shops are used for large-sized items and large batches of goods. The fifth trend is the almost complete completion of product substitution of the brands that have gone away. Over the past two years, we managed to find alternatives for more than 90% of products in the finishing materials and power tools segments.
What to expect in 2024 in the DIY sector?
In 2024, we anticipate a further increase in the share of STM in the DIY market. The combination of an acceptable level of quality and moderate cost (due to cost optimisation) addresses two key issues simultaneously: it expands the range of offerings and generates additional profit.
We anticipate that the B2B sector will continue to expand. This growth can be attributed to the increased activity within the construction sector. In the first five months of 2024, almost 44 million square metres of housing was commissioned in Russia, reflecting a 500,000-square-metre increase over the same period last year. Furthermore, a number of federal and regional programmes for new construction, modernisation and overhaul of educational, healthcare and cultural institutions are planned, indicating an additional demand for DIY products from corporate customers.
An increasing number of market participants will begin to utilise visualisation tools. The advantages of such solutions are clear: they allow customers to see how a particular material or piece of furniture will look in a room or house, which will simplify the choice process. Visualisation tools can be presented both in the shop itself and on its website.
The market will continue to see the development of various loyalty programmes. In a highly competitive environment, market players interested in retaining customers will offer them various special programmes. These may take the form of a cumulative discount, a bonus programme with points, or increased cashback. A clear loyalty programme will not only retain existing customers, but also attract new ones.
Advantages of participating at ToolMash
The Russian DIY market is presently offering foreign players considering entering it a promising opportunity. Participating in the inaugural ToolMash exhibition is an excellent opportunity to raise brand awareness, identify potential partners and gain valuable insights into the nuances of the Russian market. It is also worth noting the chance to connect with clients from related industries, as ToolMash will be held concurrently with other significant industry events: Weldex International Exhibition of Welding Materials, Equipment and Technologies and Fastenex International Exhibition of Fasteners and Industrial Supply.
The International Hardware Expo ToolMash, taking place from 8 to 11 October 2024 at Crocus Expo IEC in Moscow, offers an unparalleled opportunity for DIY product manufacturers to showcase their wares to the largest players in the retail market. The event will also feature a comprehensive range of power and hand tools, as well as painting tools.
