Russia is an emerging market where fortunes can be made and lost. The market isn’t for the faint of heart, but doing a lot of pre-planning, asking the right questions, and working with the right people can ensure that your Russian deployment is a success. A recent McKinsey report sums up the Russian retail environment now:
“The most successful companies will be those that can best make data-driven decisions, manage their customer relationships, and keep costs under control.”
We agree with that assessment and have put forth concrete steps to ensure that your company is one of the successful ones. Starting with the McDonald’s store in Red Square that opened in 1990, American companies have been selling everything from Big Macs to routers in Russia. The appetite for American products and services in Russia remains strong, but the government creates challenges — challenges that you can meet with the right partner.
We’ve covered a lot of ground in our series of posts on dispatching global field services to Russia and doing business in Russia. Let’s go over some of the highlights and five final takeaways:
1. Find a Russian Partner
Very few U.S. companies go it alone in Russia, for a variety of reasons, regulatory and political. The most successful deals work with a Russian partner. This is especially true in retail, but we think it is equally important for telecommunications and other IT projects.
2. Speak the Language
You can have the best equipment in the world, the best plan, and the most skilled technicians, but if you can’t speak Russian or have someone on your team that does, you probably should pack up. You can read more about the importance of language in the Russian IT market here.
3. Get Your Accounting in Order
Accepting international payments, taxes, local regulatory laws, and the like can all make for a very difficult environment. One of our Russian business sources warns us that homegrown companies in Russia will often shy away from doing business with international companies simply because they don’t want to deal with the hassles of international accounting.
So make it easy for your Russian partner. Have the accounting questions cleared up from day one and work with a Russian accounting entity that knows the local rules and taxes. You’ll sow goodwill by doing so, and you’ll take your business further. Read more about Russian accounting here.
4. Find an Importer of Record
Tapping Russia is tough because of onerous rules and burdensome paperwork that the average company customs or compliance department is ill-equipped to handle. Paperwork such as EAC Certificates, FSB Notifications, and Letters of No Encryption are all key hurdles to clear before landing your business, or its components, in Russia.
The best way to handle these hurdles is to partner with an established Importer of Record (IOR). At Kinettix, we have a logistics partner who can manage the entire transaction, including compliance. It’s safe to say that if you don’t line up an IOR ahead of time, your Russian dreams will be dashed. Read more about this crucial step in a Russia deployment here.
5. Get a Bill of Materials (BOM) Analysis
The maze of laws governing what can be imported into Russia is long and complex. A project can be derailed by a single chip that isn’t in compliance with Russian regulations. Getting a Bill of Materials (BOM) Analysis ahead of time can save you and your company a lot of potential time and money as you ready for your Russian deployment.
For more on all of the above topics in one place, check out the Kinettix Ultimate Guide to Russia. And contact us if you’d like a complimentary consultation about your Russian IT project — we’re ready to take on the challenge.
