The average profitability of Russia’s light industry sector has increased 1.5 times since the introduction of mandatory labeling, according to data from Rosstat cited by Dinara Guryanova, Head of the Light Industry and Footwear Product Categories at the Center for Advanced Technologies Development (CRPT), the operator of the national labeling system Chestny ZNAK.
“According to Rosstat, average sales profitability has grown 1.5 times. Previously, it stood at 8.4%, and during the period of mandatory labeling it increased to 12.8%. Revenues of legitimate manufacturers of labeled light-industry goods rose from 328 billion to 827 billion rubles,”
Guryanova said at a meeting of the Council on Light Industry under the Commissioner for Entrepreneurs’ Rights in Moscow.
She also noted a reduction in the share of illegal turnover in the light-industry sector, a trend confirmed by both the Chestny ZNAK system and industry experts. For example, according to a study by the Higher School of Economics (HSE), the volume of illegal trade in clothing and textiles decreased by 30.6% over five years—due in part to labeling.
Labeling as an Effective Tool Against Counterfeiting
A dramatic reduction in counterfeit goods is one of the main advantages of product labeling in the light-industry sector, says Mupegnu Nzussi Kevin Gras, Associate Professor of Economics at Melitopol State University and PhD in Economics. Other significant benefits include improved tax transparency and the creation of a safer market environment for consumers and bona fide producers.
“In logistics, labeling simplifies inventory tracking and warehouse automation,”
the expert added.
Manufacturers may encounter difficulties during the initial transition to digital labeling, particularly with upfront expenses—equipment for applying codes, integration with Chestny ZNAK, and adjustment of internal processes.
“However, these costs are offset by reduced losses from counterfeits, optimized stock management, and increased consumer loyalty,”
he noted.
Modern cloud solutions and phased implementation help minimize operational challenges, and in the long term, labeling can become an investment in business development.
This view is supported by Vladislav Kazachanskiy, industrial labeling expert at the IT company Pervyi Bit (Tomsk).
“The market now offers modern solutions for printing and applying codes—from desktop machines for small batches to high-speed systems operating directly on production lines. Proper selection of equipment almost always helps avoid bottlenecks. Applicators, scanners, and cameras scale easily and integrate seamlessly into production chains,”
he explained.
He emphasized that labeling is typically integrated into existing technological processes.
“Manufacturers value continuity. Therefore, the most effective approach is minimal changes and smooth implementation. This reduces staff resistance, eliminates the need to halt production, and allows for rapid launch of labeling in industrial operation,”
Kazachanskiy said.
Labeling as a Business-Friendly System
Natalia Bernadskaya, founder of the premium clothing brand BeR me, which operates its own cashmere knitting facility in Russia, confirmed that Chestny ZNAK is straightforward to integrate and not overly bureaucratic.
“Our production process is sufficiently advanced and automated. The already established workflow carries no significant additional load, and within the overall pricing structure, labeling does not affect the cost of goods,”
she said.
She stressed that any regulatory system ultimately protects responsible manufacturers and consumers. Previously, online marketplaces often advertised “pure wool” items at modest prices, only for buyers to discover that the products were made of 100% polyester. Not always through the fault of manufacturers, since they rely on raw-material suppliers—and laboratory verification is expensive. The number of such cases has now significantly decreased.
While Chestny ZNAK has yet to become a global quality mark like Australia’s Woolmark, Bernadskaya believes it has strong potential for future recognition.
Challenges and Upcoming Regulatory Changes
Some challenges nevertheless persist. As noted earlier by Elena Svarovskaya, founder of the everyday clothing brand CRESTA, mandatory labeling may extend delivery timelines for finished goods shipped from manufacturing countries (such as Uzbekistan) to Russian retailers. Labeling also adds to production costs.
However, the benefits prevail—labeled goods inspire greater consumer trust, and loyal customers are key to stable revenues and sustained profitability.
Upcoming Changes in Product Labeling
Beginning March 1, 2026, the fourth wave of labeling is scheduled to start. It will encompass life-saving and protective vests, belts, harnesses, protective headgear, and other fire-resistant industrial and professional garments.
Another planned innovation is a restriction on issuing re-labeling codes when the volume of requested codes exceeds the legally acquired inventory. These requirements are expected to come into force in late 2025–early 2026 for footwear and the first wave of labeled light-industry goods (outerwear and women’s blouses). In 2026, these restrictions will extend to products from the second and third labeling waves—skirts, dresses, trousers, scarves, underwear, swimwear, hosiery, and other garments. The measure aims to prevent illegal trade.
Technical Aspects of Labeling
Different types of goods use different labeling technologies. For example, fur products are labeled with RFID tags, which use radio-frequency identification to encode information. Cigarettes, footwear, and clothing are labeled with DataMatrix two-dimensional barcodes.
The cost of a single labeling code is 60 kopecks including VAT, except for essential medicines priced below 20 rubles—for which codes are issued free of charge.
All labeled goods are added to the national product catalog, part of the Chestny ZNAK platform, where any consumer can enter a code and access full information about the item.
