After almost 18 years of negotiation, Russia has entered the World Trade Organization (WTO). Russia is one of the last major economies in the world to join the WTO, and the hope is that this move will lower tariffs and facilitate more exports to this large and growing market.
According to the US Department of Commerce, Russia will cut its average import tariff by 5.9% which will make imports less expensive. This bodes well for US companies poised to take advantage of this opportunity, as many US products have always been perceived to be of high quality and sought after by Russian consumers. Lowering the tariff should reduce the burdensome costs of imported goods and open new markets for US manufacturers seeking to grow revenues from exports.
According to the US Commercial Service Pittsburgh Office, Pennsylvania exports alone to Russia increased by 86% in 2016 to $226 million. While opportunities will increase, to be successful “a company must carefully evaluate risk and reward” according to Andy Konitzer of the University of Pittsburgh. Seeking and finding advice from experienced international business professionals will help smooth the process and increase the chances of a favourable return on investment when looking to expand to Russia.
While exporting to Russia does pose challenges as well as opportunities, promoting your brand via targeted online marketing can be an excellent way to introduce your products quickly and cost-effectively. In 2016 Russia had approximated 60 million Internet users totaling about 45% of the population. This number is substantially growing each year, providing an excellent avenue to reach both distributors and consumers looking for the US and other imported products.
As Russian is still the dominant language and Yandex the leading search engine, companies might need to seek the help of online marketing experts who can access professionals currently working in-country and who understand how to properly manage online marketing campaigns in Russian. From a strategic standpoint, Russia should certainly be considered in and future global expansion plans!