Tatarstan, Russia’s second most attractive luxury market after Moscow

Just two hours by plane from Moscow and less than 3 hours from Istanbul, Kazan, the capital of the Republic of Tatarstan, is not only one of the most important business hubs in Russia and the entire CIS region but also a cultural centre, with top class universities and impressive cultural institutions such as the National Opera and the National Theatre.

Compared to other Russian cities of the same size, such as Ekaterinburg, Kazan also boasts an beautiful architecture and scenery, being situated at the confluence of the Volga (Europe’s longest river) and Kazanka rivers. The famous Kazan Kremlin is a World Heritage Site, a unique centre where christian religions live peacefully together with the muslim ones. Built in 2005, the Mosque within the Kremlin complex is one of the city’s most recognizable landmarks, especially considering the proximity to the largest Orthodox cathedral of Tatarstan.

We have also discovered in Kazan probably the most advanced sports facilities and centres in the entire Eastern and Central Asian region, with state of the art hockey and football stadiums, a huge aquapark situated right on the Volga river downtown, gymnastics and athletic complexes as well as a top class indoor tennis complex. Probably the most unique features of social life I have encountered, were the equestrian complex as well as a five star international standard mountain resort with a perfectly equipped SPA, skying slopes as well as a golf course with 18 holes, all within 10 minutes drive from the centre of the city.

An array of local and international cuisine restaurants as well as cafe and bars are rife with locals and foreigners, displaying a vibrant city, developing at a very fast pace, despite the current crisis. Thanks to its facilities and a very pro-active government, Kazan will be host to the 2013 Universiade Games, which will boost tourism by 50%, increasing international awareness and further developing the existing sports infrastructure. An entire Universiade Village with tall buildings is currently in the final stages of construction and so is the new international terminal of the Kazan international airport. The country will also host some of the key football games of the Fifa World Cup in 2018, which will undoubtedly mark another stage in the development of the republic. In this respect, a 65.000 seat stadium is already being planned and further infrastucture such as the city’s metro will be expanded.

As for the luxury market of the republic, the centre is the capital city of Kazan which is also the centre of shopping for fashion, accessories, jewellery, watches, cars and travel. The majority of top international luxury brands are already present, however, mostly in multibrand distribution, therefore in insignificant sales volumes. The least developped sectors of the Kazan luxury market are: fashion/accessories, jewellery/watches, gourmet, travel and beauty. Almost all luxury car brands are available, with BMW being the undisputed leader with the highest number of new cars sold. Interestingly, most major dealerships are locally owned and not connected to the central ones in Moscow. As for SPA, the city already has a state of the art luxury SPA which is planned to expand by mid next year in a stand alone complex of 5.000 sqm downtown Kazan. Clients from Moscow and other cities are already regular clients of the SPA, aquapark and the mountain resort.

Anoter under-developed luxury sector is hospitality, with half of the four and five star demand being currently met by existing hotels. Official government figures indicate a 46% average occupancy of all hotels in Kazan in 2010, while there is one five star hotel and 5 four star hotels, of which Courtyard by Marriott is the only international chain hotel. The development of Kazan’s hospitality sector is not motivated by the major sports events but also by the dynamic social life, with few venues of international standard for various types of events, from business, to ceremonies and lifestyle events.

The potential of Tatarstan’s luxury market is not only given by the wealth of its upper class segment but also by the profile consumers as well as their lifestyle and mentality. Cultural and social life is only comparable to Moscow and Sankt Petersburg within the entire Russian and CIS territory, therefore, consumers having all the reasons for local purchases.

CPP is currently elaborating the first ever luxury market report on the Republic of Tatarstan, highlighting the exceptional development potential. The luxury market report will include in depth analysis of all luxury industry sectors (including private banking, travel etc) as well as an analysis of the consumer profile. A summary of the Tatarstan / Kazan luxury market report will be exclusively presented at BUSINESS OF LUXURY FORUM, March 28th 2011. Later this April, CPP will also announce two major luxury projects in Kazan, a retail one and a hospitality one.

Oliver Petcu