22 February 2023

...Despite European, North American and Japanese companies exiting Russia over its actions in Ukraine, the impact on Russian consumers is minimal, although delivery times can be longer and some goods more expensive.

The main change has been to supply routes, but the products remain available both online and in stores. Buyers just need to know where to look.

Crucially, the vast majority of goods concerned are not subject to sanctions and these cross-border flows are legal. And Moscow is happy to let them in, whatever route they take.

Brands' continued availability shows the challenge companies face in controlling supply chains when exiting a market.

Zara in Minsk

Zara-owner Inditex shuttered its 502 Russian stores after Moscow sent troops into Ukraine, and then sold them to UAE-based Daher Group.

Now, small-scale imports and online sellers are keeping them alive, a Reuters review of six major online marketplaces and conversations with a dozen buyers and sellers showed...

Online Marketplaces

As supply chains broke down, Russia legalised so-called parallel imports, allowing retailers to bring in products from abroad without the trademark owner's permission.

E-commerce sites sell a wide range of imported goods, and sellers often advertise that they bring products from abroad.

Market leader Wildberries sells old stock from Inditex brands and has almost 17,000 goods in its Zara catalogue. A source close to Inditex said these were clearance stocks that were in Russia when it suspended activities there. Wildberries did not respond to a request for comment...

'Friendly' imports

As new routes are developed the extra logistics, travel and scaling costs will fall, and though trade remains relatively inefficient, these new relationships are here to stay, said Ram Ben Tzion, CEO of digital vetting platform Publican.

"The parallel importing mechanisms have been consolidated and expanded, meaning that pretty much everything is accessible and still will be in the future," Ben Tzion said, pointing to border truck queues and new entities springing up in nearby states...

Replicas

Some brands face years battling copies and unauthorized imports. Meanwhile, Coca-Cola's Russian rivals have increased bottling capacity and launched new Cola beverages.

Swedish furniture giant IKEA sold its stock to Yandex Market, tech giant Yandex's e-commerce division, when it left Russia. IKEA brand owner Inter IKEA Group said it sold remaining stock for an undisclosed amount to Yandex as it down-scaled IKEA Retail Russia.

Yandex Market says it puts suppliers who previously sold goods via IKEA stores in direct contact with customers.

But former suppliers are also ready to sell lightly modified IKEA items under different names. One already advertises a bedding set it calls "ARUA (analogue of IKEA BERGPALM)".

IKEA said it was looking into goods being advertised as similar to IKEA online...