"For me the real dynamism in retail is the smaller cities, the frontiers," says Denis Bugrov, Sberbank’s head of strategy. "Historically banks focused on the big cities. It’s in the big cities where most of the competition is."
Point-of-sales lending is particularly well suited to serving the smaller towns: at its most basic it just requires a salesperson and a laptop. "We are one of the few banks that works from Kaliningrad to Kamchatka," says Ivan Svitek, chief executive of Home Credit, a consumer finance specialist with the biggest market share in point-of-sales lending in Russia.
Part of Tinkoff’s success is similarly partly attributable to its use of mail shots, and more recently the internet – as well as a dedicated courier operation – to sell credit to ordinary rural Russians, sometimes even in areas without branches of Sberbank. This is a model that appears particularly suited to Russia.
"You have good internet connections in Russia but it’s a big country and the transport infrastructure is lacking," says Oliver Hughes, Tinkoff’s president.
As Bugrov acknowledges, that ability to encroach on Sberbank’s home ground could be a serious threat. Sberbank’s market share outside the big cities in Russia is more than twice as large as its market share in the biggest cities.
