FILA was founded in 1920. The company only came to the Russian market in 2013. So it took almost 100 years to enter the Russian market. Why so long?
In 1920, FILA was founded as a small family factory that manufactured pencils in Florence. Up until the 1980s, FILA developed confidently on the Italian market and became a market leader in Italy after the war. At the end of the 20th century, we also started expanding internationally. The corporation started acquiring strong global operations in other countries and developing them in 1994. As a result, a small family business grew into an international corporation with branches in Europe, North and South America, Asia, and Africa. Today, FILA is the global leader in the manufacture of professional products for creative expression. Although it was almost impossible for a foreign company to enter the Russian market in the Soviet era, a Maimeri office (which is part of FILA Group) opened in Moscow way back in 1968. During the times of the Iron Curtain, this was a major sign of acknowledgement. So far as the FILA trademark is concerned, it first appeared on the Russian market back in 1991, long before the opening of an official office. Quality Italian products for development and creativity spread, like it does now, through distributors.
What is the company doing in Russia? What specific kinds of products does it sell and where?
FILA includes the following brands: Giotto (the company’s flagship brand that offers stationery and art supplies for schoolchildren and preschoolers), Giotto Be-be (products for early childhood development for children over 18 months), Dido (children’s modeling materials line), Das (modeling material based on natural clay), Lyra pencils, Tratto office supplies, Maimeri paints, Daler Rowney supplies for artists, and Canson professional paper. In Russia, FILA Group represents a global corporation, working through distributors. We don’t have our own retail or online stores. In spite of the fact that a FILA office just opened in Russia in 2013, our distribution network already covers all of Russia. We are also actively working in CIS countries. We’re improving our positions in Belarus, Kazakhstan, and we won’t stop there.
What are the nuances of the writing and office supplies market in Russia? What are the advantages and disadvantages?
The Russian market is huge and has a lot of potential on one hand, but is chaotic on the other hand. It’s a huge space with great potential for growth, which unfortunately isn’t properly researched and analyzed. In my opinion, so far the market as a whole doesn’t always have enough modern development tools and fresh ideas. Out of the many stationary companies represented in Russia, only a few offer quality products, and the understanding of what quality products are varies in each case. The Russian stationary market also heavily depends on imports, since a lot of products for creativity are not manufactured and has never been manufactured in Russia. Nonetheless, the main advantage of the stationery market in terms of business is longevity. Stationery products and products for creativity are not affected by digital trends, so these products will always be in demand.
In spite of the crisis, FILA in Russia has been doubling its financial indicators every year. Last year, FILA Russia’s annual turnover amounted to 200 mln rubles. How does this happen?
First and foremost, this happens due to the high quality and wide range of products we offer, but also due to the competent work carried out by our representative office. Good brand positioning and pricing policy are our powerful advantages. We know the disadvantages of our competitors well, along with our advantages; we show how our partners make money and guarantee (which is most important) stable quality for end users. We also actively work on generating demand for our products because we understand that customer preferences on the market as still in the process of development. Because of this, we pay a lot of attention to the needs of end users, and rationally explain why it makes sense to choose one of our brands.
Do you have a plant in Russia? If not, why not? Are you thinking about opening a plant here?
FILA currently has 21 factories in different countries. We do not have a plant in Russia yet, but considering our pace of growth here, it’s possible that we will open a factory here. The company is open to cooperation. Our policy is to acquire only strong, efficient operations that will be carefully preserved and optimized in the future. If we see something that meets our standards, we definitely consider acquisition or cooperation options.
Who are your competitors in Russia? And what are your advantages over them?
FILA is a global corporation that represents legendary stationary and creative brands. Right now we only have 3 global competitors, and this list does not include Russian manufacturers. Our main advantage is our products: safe, high quality products with a wide range of unique characteristics that guarantee successful implementation of creative ideas. All FILA products for children have been approved and recommended by the Russian pedagogical community. We don’t have any competitors in terms of quality, as well as in terms of the wide range of products that encompasses everything from the preschool sector to professional art supplies. This is a fact. When talking about our products, we usually joke that people get instantly addicted to it. This really is the case. You try it once and you forget about other brands. I’d also like to point out that our products for children have an official 2+ certification. This is the lowest possible age limit for children’s products in Russia, where the minimal threshold for any children’s line in 3+. Some brands are classified as 0+, but in this case consumers should be cautious, since this classification is simply illegal on the Russian market.
Have the sanctions impacted your company in any way?
No, they haven’t. Like the global crisis, our representative office only started developing in Russia in 2014. We were growing while the economy was stagnating, which is a real miracle for the market. We haven’t had any downturns since, so we have a lot to be proud of.
FILA is the only company on the Russian market that offers insurance coverage in the amount of 1 mln Euros if there is harm done to the customer. Could you talk more about this?
The company takes safety seriously. Several FLA Group labs in different countries are constantly working on product quality and testing products for different kinds of risks. We have very strict quality control. We keep samples of every batch of a product in the archives, which means several samples a day for each factory. Historically, we have not had any incidents at FILA where customers were harmed by products. Every product is made taking safety considerations into account. Because of this, insurance companies assess FILA risks in this respect to be very low. That’s why we are ready to offer such high compensation, which, by the way, no other company on the market can offer.
Wirschaftsclub Russland: The most important thing is to socialize, network, share experience
If the Russian Economic Club (Wirschaftsclub Russland) didn't already exist, it would definitely have to be created.
Paul Bruck: Russia has niches for western SMEs
It would not be an exaggeration to say that Paul Bruck is a famous person in Russia.
Vikram Punia: Happiness is not about money
The story of 44-year-old Vikram Punia, President of Pharmsynthez, is nothing short of extraordinary. It’s surprising Bollywood hasn’t made a movie about his life in Russia yet, but who knows what the future holds!
Founder: Department for External Economic and International Relations of the Government of Moscow
Address: Voznesenskiy Pereulok, 22, Moscow, 125009
Ph: +7 (495) 633-68-66, Fax: +7 (495) 633-68-65
PHOTO – www.mos.ru, www.dvms.mos.ru, ITAR TASS Agency, RIA-Novosti, Getty Images Russia, companies and organizations, represented in the issue.
If you wish to get new issues of Capital Ideas, please, apply to: firstname.lastname@example.org
The magazine is registered with at the Federal Authority of Legislative Control in Mass Media and Cultural Heritage Protection. Media registration certificate ФС77-53716, issued April 26, 2013.
All reproduction permitted only with the Editor’s permission and reference to ‘Capital Ideas’.
Published with support from the Department for External Economic and International Relations of the Government of Moscow