Although this potential is alluring especially for foreign investors, there are a number of risks involved with investing in Russia. Primarily, obtaining access to reliable facts about Russian markets is extremely difficult and, at the same time, strategically important. Therefore, getting guidance is absolutely necessary for companies and foreign investors looking for success in the developing Russian markets.

Frost & Sullivan's Director Beatrice Shepherd states, "The unfavourable press on doing business in Russia overshadows this country true potential. There is limited objectivity and willingness, coming from Western enterprises, to accept the differences of working with a different culture and business environment. At Frost & Sullivan we have been working on projects in Russia for global companies from the US, Europe and Asia but also for Russian companies. This gives us a unique perspective on this country, a truly objective view."

Within these developing markets not yet saturated, Frost & Sullivan projects continued growth. Beatrice Shepherd is enthusiastic about the work her team is doing in the region: "We recently won an important project for a Russian government agency to assess and develop a new technology. Moreover, we have just completed a due diligence for one of the largest private equities in Russia for the acquisition of a Russian construction company. It is great to see businesses flourishing and prospering thanks to our strategies."

"We work on different projects/partnerships with our clients in Russia from the simple assessment of the market potential for a certain company to due diligence, risk assessment, partnership projects, business model and business cases design," continues Beatrice Shepherd. "We also work for Russian companies and, at the same time, for foreign companies. Thanks to our business intelligence strategies, we are able to place our clients in a stronger and more powerful position which leads to growth and success."

This is particularly interesting and important in times of global economic crisis where a new strategic thinking can make a huge difference. "The current economic crisis that is hitting Russia as well will not diminish its attractiveness," continues Frost & Sullivan director Beatrice Shepherd. "Russia is and will be one of the most exciting emerging markets in the world. We believe in the high potential of this region. There are huge opportunities and resources that are waiting to be tapped."

In 2008, Russia's Real GDP growth significantly outperformed average EU and global growth rates. Since 1999, Russia's Real GDP growth is 83%. "Having demonstrated incredible economic growth, Russia is now comparable to other European countries, with greater access to consumer goods and services," continues Beatrice Shepherd. "Perhaps the biggest draw to Russia is the fact that its markets are far from saturated, predicting future growth, yet underdeveloped, making it a prime investment region. Another compelling reason to invest in Russia is the double-digit increase in disposable income. Currently, Russian households have experienced a 163 percent increase in disposable income, which is funding the expansion in financial, retail, healthcare, media segments. Russia has a large population, with increasingly higher purchasing power. The combination of unsaturated markets and a growing percentage of disposable income provides a significant incentive for potential companies to enter this growing market."

Investment risks in entering the Russian market revolve around the lack of diversification in the overall economy. For the most part, the entire economy is being carried by the energy and oil industries. If the Russian economy is to become more multifaceted, other industries such as construction, FCMG and manufacturing need to continue to gain economic importance and build strength. The rise in investment demand is up by 20 percent, but Russia is still experiencing lower levels of investment, especially when compared to its neighbours China and India.

Beatrice Shepherd has no doubts, "However intimidating these risks may seem, investment risk takers cannot ignore the immense advantages of investing in Russia. I believe that when all the pros and cons have been weighed, we will continue to be attracted and scared by the Russian market. It is not for the feint of heart. Breaking into Russia is not a race, it is a marathon."
Whether companies are already trying to break into Russia or need market guidance, Frost & Sullivan can help guide companies into more profitable markets, and effective growth strategies offering a comprehensive growth strategy, backed by a plethora of case studies on its capabilities for Russia from all industries.

SOURCE Frost & Sullivan
http://www.frost.com

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