Fondazione Altagamma, the Italian luxury goods industry trade association, focused on Russia in its conference in Milan on July 8. Russia is the tenth ranking luxury market in the world and the fifth largest in Europe, with a market worth €5.8 billion in 2013, up 5 percent on 2012, but the area is currently experiencing geopolitical tensions. Experts said that in this context, luxury consumer spending would fall by between 4 and 6 percent this year in the country, and by 5 percent in Moscow.
According to Altagamma, Russia's political problems will be solved eventually, but the structural weakness of the Russian economy will have an impact on luxury spending for many years to come. The situation is expected to improve in 2017, when there will be an effective reduction of duties on luxury product categories.
During the conference, it was also pointed out that Russia's population will drop by 30 million in the next 30 years, with a negative impact on consumption. In the next two years the middle class will suffer the most compared with the more affluent part of the population, and therefore sales of luxury goods should not be affected significantly. However, in the next five or six years the situation could change for the worse unless the country implements the necessary reforms.