IKEA Goes to Ukraine from Moscow

MOSCOW, Ukraine -- Ramstore retail chain has sealed an agreement with IKEA to become a major operating company in Kyiv’s MEGA shopping mall. The project proves that the Ukrainian capital is an undisputed leader on the volume of Russian retail investment among the CIS cities (excluding Moscow). However, experts predict a forthcoming sharp decline in the attractiveness of Ukrainian projects Ramstore's Ukrainian expansion will copy the retailer’s triumphal entry of the Moscow market in 1997. Ramstore in Kyiv will also be the biggest food store in the country with the total area of 12,000 sq. km.

Ramstore in Moscow

Ukrainian projects are now highly popular with Russian businessmen, as nearly all top Moscow retailers have their shops in Ukraine. Russian retailers do not pay that much attention to any other Russian regions, except for Moscow. The volume of the retail market is estimated to have risen 28 percent. The city is relatively close to Moscow – 800 km, compared to several thousand kilometers to Russian million-populated cities. What is more, many retailers view Ukrainians as weak rivals.

However, experts predict the Ukrainian retail a short life. The Russian expansion may die out in a year or a year and a half, as the rent on commercial premises has soared due to the entry of Russian retailers, the rates approaching Moscow ones. In these conditions it is easier to go developing Russian cities with the population of 500,000 – 700,000.

Source: Kommersant