Competition among domestic corporations over the K-ramyeon market in Russia is expected to begin. Paldo Co. has dominated the Russian market for more than 30 years with its flagship product "Dosirak," but Nongshim is moving to attack the market directly by establishing a local subsidiary. While Nongshim holds the No. 1 share in the ramyeon market at home, Paldo Co. has the upper hand in Russia, and the industry is watching for shifts in the Russian ramyeon market landscape.
According to the retail and food industry on the 9th, Nongshim plans to set up a sales subsidiary in Moscow in June and move to target the local market. It is part of a "Eurasia strategy" to expand from Russia as a base into Commonwealth of Independent States (CIS) markets such as Kazakhstan and Uzbekistan. A Nongshim official said, "We made the decision based on the market's growth potential," adding, "Given average annual growth of around 10% and rising interest in K-food driven by the K-content boom, we judged this the right time to enter."
According to global market research firm Euromonitor, Russia's ramyeon market has posted an average annual growth rate of more than 10% from 2021 to 2030. It is projected to grow to about $1.05 billion (about 1.56 trillion won) by 2030. Last year, Russia's imports of Korean ramyeon totaled $52 million (about 77.3 billion won), up 58% from a year earlier.
Paldo Co. currently leads the K-ramyeon market in Russia. Starting with exports to Russia in 1991, Paldo Co. opened a Vladivostok office in 1997 and established a Moscow office in 1999. After 2005, it built local factories, securing production and distribution networks, and it has dominated the market through about 30 years of localization. It maintains a roughly 50%–60% share of the Russian cup-ramyeon market.
According to Russian payment terminal corporation Evotor, Paldo Co. held the No. 1 share of Russia's instant-ramyeon market in chain retail stores last year at 54%. Local brand Rollton had a 21% share, and Samyang Foods' "Buldak spicy ramyeon" accounted for 9%. OTOKI was too small to be tallied separately. Nongshim also does not have an official market share yet.
When it first entered, Paldo Co.'s Dosirak precisely targeted demand for affordable, convenient meals, and later secured price competitiveness by establishing local factories. A ramyeon industry official said, "With a product lineup centered on mild flavors tailored to Russian consumers' tastes and a tightly woven local distribution network, it has taken root as a 'national cup-ramyeon.'"
Russia is one of Paldo Co.'s key overseas markets. Dosirak Rus, Paldo Co.'s Russian sales subsidiary, posted record sales of 500.9 billion won last year. That was a 26% increase from a year earlier. Paldo Co. says it intends to maintain its No. 1 position in the Russian K-ramyeon market. A Paldo Co. official said, "We will strengthen local-tailored products and marketing based on the distribution network and brand trust we have built in the Russian market."
Against this backdrop, Nongshim's entry into the Russian market as a latecomer raises the possibility of a shift to a competitive phase. Some in the industry say Nongshim is not necessarily at a disadvantage as a late mover. A food industry official said, "Nongshim has already built production and distribution simultaneously in the United States, China and Japan, and enjoys strong global brand recognition through Shin Ramyun." As of last year, Nongshim raised its overseas sales share to about 40% and has set a goal of expanding it to more than 60% by 2030.
At the initial stage of its Russia entry, Nongshim plans to supply products through its Noksan export-only plant in Busan and, for the time being, has no plans for local production. Instead, it will enter the market with Shin Ramyun, Neoguri, and Kimchi Ramen and then pursue differentiation through a premium product strategy. Based on brand recognition and distribution experience accumulated in global markets, it is expected to pursue medium- to long-term market expansion.
The future landscape will likely diverge depending on the two companies' strategies. Paldo Co. is maintaining price competitiveness and mass appeal through a local production base. Nongshim is reviewing a differentiation strategy centered on premium products.
Market conditions are also a variable. Russia has a high share of instant food consumption and a strong tendency to eat ramyeon as a meal. Although preference for spicy flavors has grown recently, consumption still centers on mid- to low-priced products, which could limit expansion of high-priced items. The fact that local brands dominate the low-price segment is also cited as a burden.
Lee Jong-woo, a professor of distribution marketing at Namseoul University, said, "Paldo Co.'s Dosirak succeeded because it matched the local consumption style of simply pouring in hot water," adding, "The balance of power could shift depending on who builds local strategies more flexibly."