OREANDA-NEWS. February 21, 2013. Robust growth in credit card spending, a stable trend toward a lower share for cash withdrawals, an increase in the number of purchases made via the internet and stability in purchase category preferences ahead of the New Year’s holidays — such are the main conclusions of the annual study spending throughout 2012 published today by Citi Russia’s Consumer Bank analysts, reported the press-centre of Citibank.  

The bank’s clients increased their credit card spending in 2012 by 25% from 2011. For comparison, from 2009 to 2011 credit card spending rose by 18%. As seen in previous years, the average monthly spend reached its peak in December. The total actual credit card spending in December 2012 was 6600 rubles higher than in December 2010.

The share of cash withdrawals continues to demonstrate a solid decline. In comparison to the previous periods, the number of cash withdrawals has been reduced by more than 2.5-fold over the past 4 years. According to the analysts, this trend points to the steady improvement in the financial literacy of Russia’s middle class, which is using financial products with increasing professionalism, and also the growing number of POS accepting bankcards.

As forecasted, residents of St. Petersburg attained the same level of spending that Muscovites demonstrated the previous year while residents of other Russian cities with populations of a million or more have now exceeded the level of spending for Moscow residents recorded in 2010.

Internet purchases continue to gain popularity among Russians: over the past three years their share in overall credit card spending has grown by 40%. Compared to 2011, the volume of internet purchases (online sales) grew by 57% and the average monthly check was more than 4700 rubles (compared to the projected size of 4500 rubles), which exceeds 2009 figures by nearly 3-fold and 2007 figures by 5-fold.

Analysts note that the average monthly spend of those who make purchases via the internet is higher than among those who do not make online purchases. For example, in 2012 the average monthly credit card spend among Internet shoppers was more than 30,000 rubles, which is approximately twice the amount spent by those who did not make purchases via the internet. On the other hand, while offline buyers increased their credit card spending in 2012, those who are active online shoppers largely only increased their volume of overall credit card spending through their online expenditures.

December spending by people living in households exceeded that of those living alone by 3700 rubles (compared to the forecasted 4000 rubles) and amounted to 21,400 rubles compared to 17,760 rubles. Women increased their spending in December by 13% (4 percentage points less than forecasted), while on average women spent 14,200 rubles compared to an average of 25,300 rubles for men.

The seasonal preferences of Russians did not dramatically change: in following with tradition, cardholders spent on clothing (11% of spending by volume), food products in supermarkets and grocery stores (11%) as well as airplane tickets (5%), hotels (5%), household appliances (5%), and food services and restaurants (5%).

Clothing stores experienced 20% growth in consumer spending in December (compared to 14% in 2011) while supermarkets and grocery stores saw a 53% rise (60% in 2011). On the other hand, airplane ticket sales amounted to ?22% (compared to ?8% in 2011). Russians continue to purchase household appliances in December although not as actively as in the previous holiday season (69% seasonal growth compared to 88% in 2011).

Yuri Topunov, Credit Cards Head at Citibank, said: "In recent years we have noted that our clients have begun to use their credit cards more uniformly throughout the course of the year. This can be explained, in our view, by the fact that the average representative of the middle class in Russia already has one or several credit cards and/or consumer loans for which payments need to be made on a regular basis. As a result, major purchases become part of a well-thought-out budget plan, in contrast to the unforeseen spending in previous years, which in part contributed to numbers peaking in the month of December.

Methodology: Statistical data on credit card spending of Citibank’s clients was the basis for the study. The study analyzed the data for the period from the beginning of 2007 until the end of 2012. The sample in 2012 was at least 500,000 clients selected randomly. The sample only included men and women over the age of 22 with monthly income of at least RUB 9,000. This methodology is largely identical to the one used in 2011.