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Russian Cleaning Machines Market: Crisis and Leaders

article_Chernets_R_ENEconomic recession makes cleaning contractors feel sad but not only them, but also suppliers of cleaning machines: during 2013-2015 the import of floor cleaning machines into Russia has fallen almost by one third. However, even under the circumstances, market leaders remain unchanged and look to the future with cautious optimism.

In 2016 DISCOVERY Research Group marketing agency conducted the survey of the Russian market of floor cleaning machines, the results of which were published in the summer 2016. According to data from InfoClean web-magazine, 3 brands are leading in the cleaning technology market, their total output in 2015 in physical terms amounted to half (51%) of all imported into Russia cleaning machines. As for the number of imported cleaning machines, KARCHER took the 1st place – 28% (2 361 pcs.). The second place took TENNANT – 13% (1 113 pcs.). NILFISK trade mark made the top three – 10% (830 pcs.) At the same time, among the leaders, KARCHER was the first owing to the democratic price of its products – in 2015 the average price for a unit of imported machine to Russia (total cost / quantity) was $ 1722.15. Nilfisk came second – $ 2886.75. “Tennant” took the third place as for the availability of imported cleaning machines with an average price of 4677.45 dollars per product unit.

In 2015 a total of cleaning machines imported to Russian market was 8185 machines for amount of $ 19.547 million dollars , which is one third less than in 2014 and 54% lower than in 2013. It should be noted that the volume of machines supplied for cleaning was seriously affected by the import of Chinese products, most of which according to DISCOVERY Research Group, was imported from China only in 2013 and was not supplied to Russia later (within the period being investigated). Were it not for the import of 5295 machines of the YANGMING CLEAN brand for amount of 1181 thousand dollars, the difference in market volumes of 2013 and 2014 would be insignificant. These machines were the reason for high level of imports of battery powered cleaning machines with manual controls and of low average price in 2013 compared with subsequent periods.

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In Alexander Doroshenkov’s opinion (the Head of the Product Management Department at Karcher Professional Machines in Russia) the main reason for the significant market disruption of Russian cleaning machines was the increase of prices in the ruble equivalent of all machines manufacturers due to the growth of the exchange rate. Since 2014 economic recession has a very negative influence on the market. Decline in the Ruble and appreciation of exchange rate are forcing cleaning contractors to make some painful decisions. The budgets of cleaning contractors were formed in rubles and could not be so sharply revised.

“But it’s not just the ruble budgets of cleaning contractors,” – said Alexander Doroshenkov. – All the customers began to save, and primarily due to non-production costs. First of all the costs for cleaning services and cleaning equipment were put down especially an expensive floor cleaning machines.” According to Alexander’s words, during the period being investigated, customers began to save on the purchase of new machines, preferring to repair old one. It’s nothing to be surprised at, because according to Karcher statistics during each economic recession the service turnover is growing, and sales are falling.

According to the data of the marketing research in the period 2013-2015 Russian market was supplied with cleaning machines, the average price of which in dollar terms was fallen year by year. At the same time, the volumes of its import in physical terms, comparing with the type of management, showed multidirectional dynamics. Thus, alongside the cheapening of the imported products, there was an increase of ride-on machines supplied to Russian market. Over the three investigated years, the volume of imports of these machines increased by 81% (from 511 to 925 pcs. per year) with a fall of the average price by 40% (from 7389 to 4426 USD / pcs.). In 2015 ride-on machines were 16% cheaper compared to the indicators of 2014, were imported by 18% more.

At the same time, from 2013 to 2015, the volume of imports of manually operated machines to Russia was sharply reduced. In 2015 this type of machines was imported by 31% less than in 2014 (7574 against 10983), and the average price per product unit fell by 10% (from 2,261 to 2024 dollars per unit).

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Market leaders could not stay away from the ongoing processes: each of the TOP-3 was affected in one way or another. However, Karcher still takes the first place in terms of supplies.

Karcher’s leadership in the market, according to Alexander Doroshenkov, is due to the well-developed distributor and branch service network that covers more than 100 Russian cities and provides a wide range of services to customers. “Today, customers of 15 branches from Kaliningrad city to Surgut city can use short-term and long-term leasing, a leasing program from a partner of Siemens Finance, to conclude contracts for the equipment servicing. For the time of repair, we provide our customers with the machines for temporary replacement for free, – Alexander noted. – Before each sale, we organize on-site visit for the demonstration and leave the machine for a test drive. For cleaning contractors we provide profitable financial terms”.

Some stabilization in the foreign exchange market allows producers and suppliers of cleaning machines to look to the future with cautious optimism. Alexander Doroshenkov is confident that in 2017 the market of cleaning machines will grow in quantitative terms. “There is a reserve for this. The reason is that floor maintenance is more efficient by means of machine rather than manual cleaning. It is difficult to speak for the whole market, but I can say that we see a small revival of needs and we observe a steady growth in sales. For example, only this year we launched 4 brand-new models of floor cleaning machines, – Alexander told “InfoClean”. – However, here it is necessary to divide clearly the market into segments. For example, the cleaning contractors are featured by rotating sites. Some companies leave the site, and another companies starts to work on this site. And for a new site, cleaning contractors are looking for the best conditions for machines: they try to take everything for rent, leasing, or with a long grace period. And customers from the manufacturing industry have become more careful in choosing the floor cleaning machines: the tenders have become more challenging, and the timing of the decision has stretched “.

In his opinion, cleaning contractors will increasingly take machines for rent. Customers’ requirements for services (not only maintenance) will also increase. “For different groups of customers, these requirements can be radically different. For example, two extremes: cleaning contractors need simple and cheap machines without any additional options, and modern manufacturing enterprises (and some other customer groups), need more advanced machines with an all-inclusive service contract for a period of 5 years. And we are going to meet the needs of all customer groups, “- Head of Product Management of Professional Machines at Karcher LLC shared with InfoClean Web-magazine.

Alexander Bessarabov, Marketing Director of INTERPROJECT Company, thinks that the specialists of DISCOVERY Research Group used apparently data not only of floor cleaning machines during the preparation of the research. “In general, the schedule for brands is probably correct, but all is piled in a heap. If it is customs data, it is too generalized. For example, Jinlong is not known to me as a manufacturer of professional machines – 90% of its catalog is occupied by household vacuum cleaners and molds. 98% of Fimap products are floor cleaning machines. If you take the floor cleaning machines separately, the picture will change greatly. In general, I agree as for the decline in sales in the mentioned period. We had a stable growth of sales, but marginally, of course, we lost ground strongly “, – Alexander Bessarabov commented the results of the marketing research

In the media office of Karcher they noted that in some statistical and analytical reports it is included data not only for professional, but also for household cleaning machines. “Therefore, in order to have objective” cleared “statistics and the possibility of comparing all market players in each class of floor cleaning machines, we conduct data processing independently, only by our specialists, without involving third-party research companies,” – representatives of Karcher in Russia told InfoClean.

The figures for importation into the territory of Russia and in terms of sales volume may differ due to the fact that distributors trade both pre-order and “from the warehouse.” Russian Karcher works “through the warehouse”, replenishing it with the account of demand, – the media office of the German manufacturer noted. “In each direction of products we distinguish positions that we designate as warehouses. Accordingly, these positions are constantly available in warehouse. But in what quantity – this is automatically calculated by the computer program, which monitors the turnover of the warehouse and of each position, – representatives of Karcher explained. – We have a very high turnover rate of the warehouse. About 10 trucks per day (depending on the season) come to us from Germany and the same quantity goes to our clients. Also there are two logistics centers in Krasnodar and Yekaterinburg, where the products come directly from Germany. As a result, our customers in these regions receive products quickly and without an overpayment for delivery from a central warehouse in Moscow”.

http://infoclean.su/

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