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Interesting times start15th of September 2010
Oleg Popov, director general of Russian cleaning company Cristanval, offers ECJ an exclusive overview of the cleaning market.
Just 10 years ago cleaning services were considered as luxury ones. Then the demand for the service grew tremendously as many commercial buildings - specially shopping centres - were erected throughout Russia.
The first period of Russia’s cleaning market development is behind us. According on different experts' data, there are 600-800 cleaning companies in Russia today, and at least half of them are situated in Moscow and Saint Petersburg. Most of the cleaning companies are small and even very small, they consist of just three to five cleaners provided with some mops, buckets and – sometimes – a single disk machine. At the moment 60 per cent of the cleaning market is shared between the five biggest companies, which are Chisty svet, Corpus Group, OMS, Cristanval and Primex.
International cleaning companies started to work in the Russian market from its very beginning, but no one foreign operator has any significant achievements yet. "Russia, with all its notable features, is still a hard nut to crack for western cleaning companies," said Oleg Popov, general director for Cristanval. "I am sure the national cleaning operators’ business is growing much faster." As a rule, most of the international companies have narrow specialisation. For instance, Finland’s Lassila & Tikanoja specialises in environmental management and plant support services.
The cleaning market capacity in Moscow is around US$ 400-500 million, and the market potential is enormous: at the moment just 20 per cent of property owners outsource cleaning to specialised cleaning companies - the vast majority still carry out the cleaning functions themselves. The main clients of professional cleaners are shopping malls, prestige business centres, international factories and warehouses. As Oleg Popov said, retail outlets account for 40-50 per cent of the average cleaning company’s portfolio.
Indeed in Russia retail was the key driver in the growth of the cleaning business, and the service became popular quickly. Retail networks are generally characterised by a lack of trained staff; every now and then, we see hypermarkets in need of cashiers or salespersons. One day, retailers realised cleaning of the facilities could be outsourced, and it was not so expensive. This was the first breakthrough of the cleaning market in Russia.
In 2007-2008 – just before the financial crisis - cleaning market growth was at least 30-40 per cent annually, because of a large volume of brand new commercial real estate. Then there was a lull in the real estate market in recent years, but the cleaning industry has still developed by working on contracts which had been signed previously. Now the property market is reviving and a very interesting time is about to start.
All leading cleaning companies tend to expand into Russia’s regions. Almost all of them already work in Siberia, Ural, Volga region and the south. The most popular way to enter the regional market is franchising. "Small business in the regions got a brand new start when the economic crisis came," Oleg Popov said. "Therefore in 2009 many small regional companies bought our franchises, because the entrance fee into the cleaning market is considered to be rather low in comparison to our kinds of business."