Chinese Products Take the Place of Global Brands in Russia

The Russian market is being reorganized, with Chinese products taking the place of global brands, Bloomberg reported on Aug. 30. This is due to Western sanctions on Russia after the Ukraine war in February and the withdrawal of global brands from Russia. 

According to Chinese customs service authorities, China’s exports to Russia stood at US$3.8 billion as of the end of March, when the Ukrainian war was in its initial stage. The figure gradually grew. At the end of August, it increased by more than 20 percent compared to the same period of 2021.

According to Autostat, a Russian automobile industry analysis center, 81 percent of the new cars imported to Russia in the second quarter were made in China, a big increase from only 28 percent in the previous quarter.

The Russian smartphone market is not much different. According to Mobile Telesystems (MTS), a major Russian mobile operator, China’s Xiaomi was the best-selling smartphone in Russia in the second quarter, with three of the top five brands in Russia being Chinese. At one time, Samsung Electronics and Apple competed for the top spot in the Russian smartphone market, but the two smartphone makers stopped shipping their products to Russia after the outbreak of the war in Ukraine. Although Samsung Electronics and Apple products are available in Russia as parallel imports, Russian consumers do not prefer them due to their prices and warranty issues, Bloomberg News reported.

In August, Russian media outlet Izvestia quoted online retailers as saying that demand for Chinese TVs nearly doubled since February as South Korean and Japanese companies halted their TV shipments.

Changes are also being made in the financial sector. Russia was expelled from the international SWIFT network among banks after the Ukraine-Russia war. It has established its own SWIFT-like system and is amending its rules to allow its sovereign wealth funds to invest in currencies of China, India and Turkey.