Page 16 - bne IntelliNews Country Report: Russia Dec17

3Q17. Interestingly, that 20% told us that they always buy not the food products they plan to cook, but the ones, which are on promo. Nevertheless, the share of price-sensitive respondents was flat at 75% last quarter.
In terms of the population’s concerns, the overall picture did not change much last quarter. Corruption remained the major concern (59%, flat Q-o-Q). Unemployment was the second biggest worry; it was cited as a serious concern by 53% of respondents (down from 55% in 2Q17). Inflation was cited by 49% of respondents and remained in third place. Only 18% of respondents were troubled by the ruble exchange rate, up 1 pp from the previous survey.
Despite Ivanovs’ overall continued caution with regard to food spending, we see strong positive developments. In net terms, the share of customers trying to save on non-food items decreased across all categories. Moreover, the index dropped to a record low across such categories as eating out, entertainment, vacations and utilities. The%age of people trying to save on entertainment and vacations decreased by 5 pp Q-o-Q apiece to 59% and 48%, respectively. This is another confirmation that Ivanovs could finally afford to travel abroad in 3Q17.In this survey we gauged the Ivanovs’ attachment to particular brands and discovered that it is low. Only 16% search for particular brands when shopping. Some 40% always buy the cheapest items, while 45% look for brands depending on the category. This contradicts the industry dogma about the importance of brand-building, but we believe that the situation should start to change as nominal incomes recover. Naturally, brand importance is the lowest in bread (21%), and highest in alcohol (52%) and baby-food (61%).
2.7 What the Paradise Papers missed in Russia tech
According to leaked documents examined by the International Consortium of Investigative Journalism (ICIJ), the hundreds of millions dollars used by Russian tech whizz Yuri Milner’s fund DST (Digital Sky Technologies) to invest in Facebook and Twitter in 2009-2011 came “from the Kremlin.”
“Obscured by a maze of offshore shell companies, the Twitter investment was backed by VTB, a Russian state-controlled bank often used for politically strategic deals,” writes the New York Times , a member of the ICIJ.
“A big investor in Mr. Milner’s Facebook deal received financing from Gazprom Investholding, another government-controlled financial institution,” the US journalists note.
According to records from the Panama Papers, Gazprom Investholding provided hundreds of mns of dollars in loans to Kanton, a company based in the British Virgin Islands which owned one of the DST investment vehicles used to buy shares of Facebook.
Milner’s companies sold those holdings several years ago, and “no one has suggested that Mr. Milner or his companies had any connection to the propaganda operation,” concedes the US newspaper, but the Russian billionaire “retains investments in several other large technology companies and continues to make new deals.”
These deals illustrate “how the Kremlin has extended its long financial arm not only to [DST] but to some of America’s technology giants,” conclude the US
16 RUSSIA Country Report December 2017 www.intellinews.com