Expertise to find niche markets in Russia

The Russia Division of MKIK (the Hungarian Chamber of Commerce and Industry) was established in July 2003. Now, it has over a hundred Hungarian members interested in Russian relations - especially SMEs and some larger companies.

As the Honorary President of the Division, Imre Tóth, tells Diplomacy & Trade, the Diviison's establishment was necessitated by the needs of Hungarian companies trying to conduct business in the Russian market. “There is still some affinity in Russia for Hungarian products and services from the Soviet times. I myself worked in the Soviet Union with a metal manufacturing company that constructed buildings of over 3.5 million sq meters in the Soviet Union,” he adds.

The Division aims – within an organized framework and in institutionalized forms – to assist the development of Hungarian-Russian economic relations, especially the Russian exports of Hungarian small and medium sized enterprises and strengthen their market position. For the large companies, the Chamber plays an accentuated role of market organization, with respect to the fact that the division has direct links to the Russian Chamber of Commerce, several regional chambers, as well as some provinces from which economic and business information is regularly received.

In the 1990s, the Russian market changed completely with a lot of foreign companies competing to satisfy the changed demands. Imre Tóth is of the view that “it has been a problem that there are not enough Hungarian businessmen with good knowledge of the Russian language to facilitate business connections. This is where MKIK’s Russia Division comes into the picture and provides Hungarian companies with the expertise needed on the Russian market. The Russian business forums we organize are always full-house events and we also run interactive consultations in the countryside.”

By building on the local knowledge and networking systems of the Russian regional chambers, Hungarian companies can gain, in many cases, first mover advantage over foreign competitors, especially if they focus their attention on the regions. The Honorary President says that since markets in the most popular areas like Moscow and St. Petersburg are ‘full’, the MKIK Russian Division focuses on regions outside of these areas. “We have cooperation agreements with 15 such regions. The key areas for us are Rostov, Volgograd, Tatarstan, Orenburg, Omsk, Kursk, Irkutsk and others. Here, we aim to find niche markets where Hungarians have expertise that is needed. The 2018 soccer World Cup is an important event for which, we are in need of healthcare, construction and agrarian projects.”

In recent years, the dynamic growth of the Russian economy has resulted in an appreciation of the importance of the Russian market and there is tough international competition for acquisition positions. For Hungarian companies, it could be a breakthrough opportunity if they try to explore new market opportunities in the regions.

In addition to the export growth of traditional and new products and services, the Russian market is open for Hungarian investors, especially in the area of housing and investments in the pharmaceutical industry and the food industry. The Division promotes and organizes the appearance of Hungarian companies at exhibitions in Russia, and the setting-up of business meetings. It establishes direct contacts with regional chambers in Russia, business partners and local administrative organizations there.