TikTok, low-cost airlines, and online shopping: Sber reveals how Ivanovs’ preferences have changed

Nov 24, 2021

The traditional Ivanov Consumer Confidence Tracker conducted by SberCIB Investment Research on a quarterly basis continues to demonstrate a sustained positive trend. Another study conducted in September following the results of Q3 2021 also showed an improvement in consumer sentiment and confidence compared to the previous quarter, with the index rising from -17% to -16%. In Q3 2020, this figure was -21%. The consumer confidence index has recovered to its average levels for 2015-2020.

Yaroslav Lisovolik, head of SberCIB Investment Research:

“Price sensitivity is decreasing among Russians. The proportion of people for whom price is an important factor when choosing a store to shop at has decreased by 2 pp. compared to the previous quarter, dropping to 64%.

The online business audience continues to grow. In Q3, we saw a marked increase in the proportion of respondents who have shopped online at least once in the past six months, up 19 pp. to 81%. This is especially true for smaller cities. One-third of respondents regularly prefer to order food instead of going to a store, an increase of 8 pp. over the previous quarter.

We also observed a high level of interest in the stock market. More than half of Russians who have brokerage accounts or plan to open one (52%) want to increase their investment in the stock market in the next 12 months.”

Health is the biggest concern for Ivanovs

Ivanovs' concerns have not really changed. They are still primarily concerned about their health (60% of respondents, 2 pp. more than in the previous quarter, but 1 pp. less than in Q3 2020). Then comes inflation (50% of respondents, 2 pp. more than in the previous quarter, 6 pp. more than a year ago). The proportion of consumers who fear unemployment decreased over the year by 7 pp. (43%). At the same time, the unemployment rate among the respondents was 12%, which is close to pre-pandemic levels. The share of respondents concerned about economic growth and the ruble exchange rate decreased over the year by 1 pp. (30%) and 4 pp. (20%), respectively.

Business opportunity assessments have peaked

Against a backdrop of decrease in concerns about unemployment, the business prospects evaluation index reached an all-time high of 18% in Q3 2021, up 7 pp. from Q3 2020. This was facilitated by a decrease of 3 pp. over the year, to 12%, in the share of respondents who expected a deterioration in the financial situation of the company at which they work or its bankruptcy in the future.

The average wage rose 8% in a year

The study indicates an increase in average monthly wages to RUB 42,900 in Q3 2021, up 8%. The largest increase in wages occurred among respondents employed in heavy industry, taxi services, transportation, and catering (up around 30% compared to Q3 2020), as well as in agriculture (+27%), and retail trade (+22%). This is probably due to the low comparison base in Q3 2020 and higher wages because of labor shortages.

Average savings per family member reach RUB 54,700

Ivanovs' attitude toward savings has improved: compared to Q3 2020, the share of consumers who consider the current economic situation favorable for the formation of savings has increased by 3 pp., and the share of respondents who consider it unfavorable has decreased by 4 pp. In absolute terms, average savings per family member have reached RUB 54,700, an increase of 5.2% compared to the previous quarter. In the meantime, the ratio of savings to disposable income increased from 7.6% in Q2 2021 to 7.8% in Q3 2021, which may be attributed to an increase in nominal income.

Ivanovs spend 38.1% of their income on food

The proportion of Ivanovs' income spent on food hit 38.1%, compared to 37.0% in Q3 2020. This means that the population has maintained spending on food despite accelerating inflation, although the social benefits that citizens received in August and September helped.

Price sensitivity has decreased

Price sensitivity has declined over the past quarter. The share of respondents who cited prices as an important factor when they choose where to shop has fallen by 2 pp. compared to the previous quarter and Q3 2020, dropping to 64%. As concerns about the pandemic persist, the proportion of respondents who mentioned security measures, crowds, and lines as important factors in their choice of shop remains unchanged from the previous quarter or has increased slightly.

81% of Ivanovs shopped online in the last six months

Eighty-one percent of Ivanovs have shopped online in the last six months (+19 pp.). The share of online shopping clients in cities with a population of under a million saw a significant increase (+21 pp.). Collection points remain the preferred method for receiving online orders (69%, the same as in March 2021), while courier delivery continues to lose popularity: the share of respondents who use it decreased by 3 pp. over the quarter and by 8 pp. in Moscow specifically.

31% of Ivanovs buy groceries online

Approximately 31% of Ivanovs said that they buy groceries online (+8 pp. over the quarter). Their preferred shopping platform is SberMarket (36%). Samokat and Delivery Club were each mentioned by 32% of respondents, while 25% cited Yandex.Go (including Yandex.Lavka and products from third-party vendors).

Ivanovs tend to buy groceries online when they need to make a large or scheduled order or when buying food spontaneously (30% each). Among their reasons for grocery shopping online, Ivanovs also cite buying food for the week and goods that are difficult to find at traditional stores. The main factor that affects online store choice is price (36%), followed by assortment and convenience of delivery (22% each).

Ivanovs are flying with low-cost airlines less frequently

The study shows that the recovery of demand for air travel has slowed. Ivanovs now expect to take 3% more flights in the next 12 months than they had planned a year earlier, whereas in the June survey, consumers planned 14% more flights. The share of Ivanovs only planning to embark on international flights rose to 40% in September, up from 37% in June. This is likely due to the resumption of flights to Turkey and other countries.

Industry data also shows an increase in international flights. The share of passengers taking international flights by Russian carriers rose to 24% in August, up from 13% in H1 2021. With international traffic accounting for 43% of total passenger traffic on Russian airlines in 2019, there is potential for further growth.

Against the background of an increase in international flights, the share of Ivanovs flying with lowcosters has continued to decline. While this figure was 64% in Q1 2021, it dropped to 61% in Q2 and then to 56% in Q3. SberCIB experts attribute this to the fact that international flights are now mainly operated by full-service airlines.

94.4% of Ivanovs are on social media

The study showed that 94.4% of Ivanovs (internet users aged 18-65 living in cities with a population of over 100,000) have an account on at least one social network (this figure has not changed since September 2020). Almost half of the respondents use four or more social networks. Ivanovs use 3.5 social networks on average. VK remains the most popular social network in Russia, with 74% of respondents using it on a monthly basis (down 4 pp. from September 2020). Only two social networks saw an increase in monthly usage in the past quarter: Instagram (up 1 pp. to 56%) and TikTok (up 9.7 pp. to 30%).

15% of Ivanovs have an online brokerage account

The share of Ivanovs with an online brokerage account increased to 15% from 14% over the quarter. Another 25% of respondents said they planned to open one (+2 pp.). The share of consumers who perform transactions daily has not changed since June (15%), while the share of inactive Ivanovs fell by 3 pp., to 23%.

More than half of respondents who have brokerage accounts or plan to open one (52% in September 2021 vs 55% in June 2021) intend to invest more in the stock market in the next 12 months. The number of respondents who do not plan to invest more did not exceed 18% (+1 pp.).

Low interest rates on deposits are the decisive factor spurring stock market investing: 52% of respondents cited this factor in September (+1 pp.). Fifty-nine per cent also noted a higher profitability of securities as a significant factor, and 56% mentioned the convenience of opening and maintaining a brokerage account online (in June, the share of such responses stood at 56% and 53%, respectively).

16% of Ivanovs have a SberPrime or SberPrime+ subscription

The loyalty program, online grocery shopping, and entertainment are the Sber ecosystem products and services that Ivanovs prefer (52%, 33%, and 26%), with 16% of respondents subscribed to Sber services, 14% having a basic SberPrime subscription, and another 2% having the broader SberPrime+ subscription.

20% of Ivanovs have heard of ESG

SberCIB continues to track the level of Ivanovs’ ESG awareness, which remains low so far. Under 4% of those surveyed know what ESG is, and 76% have never heard of these standards. However, the proportion of people aware of ESG has increased to 20%. The metric is higher in the under-30 age group: 5% of respondents know about ESG, 24% have heard the term but do not know what it means, and 71% are unfamiliar with it.

The share of Ivanovs ready to pay more when buying products and services with a smaller environmental footprint slid to 19% from 21% over the quarter. At the same time, the proportion of people not ready to pay more increased to 63% from 61%, alongside the share of respondents ready to stop using insufficiently eco-friendly products (up to 19% from 18%).