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Spotlight on Russia: Growth Champion With Demanding Smartphone Users and New Perspectives in Customer Care

Alexander Dmitrin and Gennady Morozov

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In our recent global study Smartphone & IoT Consumer Trends 2017, we found a feature that makes Russia stand out when comparing it to other markets. As in hardly any other country, smartphone users emphasize the importance of good customer service. This may be because good service is not always the norm. People have to wait up to 25 days for their device if it needs to be repaired. There is still a lot to do, and for ambitious smartphone and IoT brands, there are tremendous opportunities in the customer care area to help differentiate themselves from competitors.

 

 

When people in Moscow eat breakfast, those in East Siberia are going to sleep. With only eight inhabitants per square kilometer, Russia is the most geographically demanding country in the world. This is not an easy challenge for an industry such as telecommunications, which especially focuses on network coverage and, if possible, reaching every person. However, the Russian mobile industry has developed splendidly in recent years. Of the nearly 140 million inhabitants, 54.7% are now using smartphones. Russia is therefore clearly ahead of the global growth champions Brazil and India, which we closely examined in our previous blog posts.

 

Russian Smartphone Market Is Growing Stronger Than All European Markets

 

After a small weak phase, the Russian smartphone market again gained momentum in growth dynamics. “After a buying spree at the end of 2014, as consumers rushed out to buy expensive smartphones before the prices rose in rubles as the national currency went into free fall, there was a very quiet market in 2015. In 2016, the market regained some of its usual tempo and the transition towards smartphones resumed”, said Simon Baker, analyst at IDC for mobile markets in Eastern Europe and the Middle East.

 

With more than 30 million smartphones sold and growth of just under 9 percent, Russia is clearly ahead of all European markets, many of which tend to stagnate or even shrink. For the global market leaders Samsung and Apple, Russia has long been the focus. Chinese providers such as Lenovo, Xiaomi, Huawei and ZTE have also secured their place among the country’s leading smartphone brands.

 

Budget Smartphones Dominate, but Customer Requirements Are Growing

 

Russia’s users know very well by now what they are ready to spend their money on when purchasing their next smartphone. While premium models have been highly successful in the past few years, the trend towards budget models offering all key features at a fair price is growing stronger. According to our study Smartphone & IoT Consumer Trends 2017, 47 percent do not want to spend more than $250 on their next smartphone. IDC found even more astonishing results, namely that about half of the current smartphone demand is for models with a selling price of under $100.

 

At the same time, customer expectations are high. Russia’s smartphone users expect a lot from their smartphone without spending much money, and above all demand reliable customer care. To have this, they would even be willing to spend more. However, mobile brands would have to significantly improve their service. People find a repair time of 72 hours acceptable, yet the actual repair time in Russia can be up to 25 days. This is rather unacceptable, considering 56 percent of Millennials spend more than three hours and 27 percent spend more than five hours a day on their smartphones. 65 percent of Russian smartphone users would not go without their mobile companion even if they were offered a 10 percent salary increase for a month.

 

Customer Satisfaction Through Competence, Transparency and Speed

 

The factors determining the satisfaction level of smartphone users in customer care are not surprising. The list is topped by the service staff’s commitment. Only those who give their mobile companion to a conscientious, experienced service expert for a repair will feel well cared for. Second on the list is the simplicity and transparency of the entire service process, followed by the speed of the service. All of these are not surprising customer expectations, and for smartphone brands that focus on improving these aspects, chances are high to gain a market share in the challenging, yet exciting, Russian market.

 

Summary: With 80 million smartphone users, Russia is easily surpassing its European neighbor markets. Movement in the market has come again after a period of stagnation. Although people tend to favor more affordable smartphone models, providers who focus on competence and speed in customer service have a good chance of winning new customers. B2X has been working in Russia for many years and cooperates with leading mobile brands. Write to us and do not forget to follow B2X on LinkedIn!

 

Alexander Dmitrin is Account Executive, Gennady Morozov is Director Partner Management at B2X Russia.

 

 

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