machinery.
Entry costs are comparatively low.
If compared to other large markets, entry costs are remarkably low. If one has to spend tens of millions euros to introduce a product in the United States on a nationwide scale, millions for larger EU markets as Great Britain and France, similar costs for Russia would run in tens, at most in hundreds of thousands of euros, with often far more impressive results (since Russian consumers and equipment buyers are more receptive to new entrants and new brands). Costs of establishing distribution networks are lower and so are advertising expenses. Warehousing, storage rental or real estate acquisition costs are notably low as long as one stays away from Moscow and central St. Petersburg (while as an additional bonus return on any real estate investment has been phenomenally high in the last decade, averaging 25% nationwide and in some areas, like St. Petersburg reaching unprecedented 5% per month in the last two years). Unlike most other established markets, the so-called guerilla marketing techniques actually work in Russia on a large scale.
Geographical and cultural proximity to the rest of Europe.
When it comes to packaging, lettering, advertising message and product's consumer appeal Russia stands very close to the rest of Western and Northern Europe. With a few exceptions a product that sells well in Sweden would also sell well in Russia. IKEA, Sweden's home furnishings retailer, has been so successful in Russia that at this point Russia became IKEA's fastest growing foreign market. Despite analysts' dire warning swhich preceding IKEA's triumphal entry, as it turned out Russian consumers are more receptive to IKEA's modern and functional design than their generally conservative American counterparts or the Chinese. In fact IKEA's success in Russia was so remarkable that by now its' investment in its Russian operations, standing at some 1.5 billion euros, is greater than the 's companyrespective investment in the rest of Central and Eastern Europe combined.
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