Vladimir Putin does everything possible to maintain the illusion with his fellow citizens. Almost six months have passed since his troops invaded Ukraine, sparking a war between the two countries. Faced with this aggression, a large part of the international community agreed to severe sanctions to hit the Russian economy. Sanctions that are still in place today but have not destroyed Russian consumers’ access to Western products.
The Guardian mentions in an article the establishment of a true system of parallel imports to avoid these international sanctions. In concrete terms, local businessmen buy Western products that they transport to Russian soil by passing them through bordering countries that are members of the Eurasian Economic Union: Armenia, Belarus, Kazakhstan and Kyrgyzstan.
a political tool
Although described as “parallel”, these imports are actually encouraged by the Russian authorities, who see them as a political tool to limit the interference of the conflict and its consequences in the daily life of the inhabitants. In fact, the latter quickly faced a flight from the large companies established in Russia under the pressure of the sanctions decided against the Kremlin.
Several product categories are affected by this channel, such as ready-to-wear, automobiles, and even technology. In response to political and financial sanctions, Moscow has published a list of products from foreign automakers, technology companies and consumer brands eligible for parallel import. Russian companies can thus buy them from a foreign company without the approval of the owners of the brand in question.
Potential for higher margins
The Guardian cites several examples to illustrate the phenomenon such as Aleksandr Gorbunov, a real estate investor from Siberia who has just opened a store to sell Zara clothes imported from Kazakhstan. Total amount of the batch of goods: more than 27,000 euros. “Everything is official, it is a parallel import […] We don’t buy everything… We have a designer who chooses what to buy from the latest collections, we don’t want to fill our store with only Zara clothes,” insists who makes a margin of a little more than three euros on each sale.
Specializing in reselling Apple products, retailer re:Store manages to have the latest mobile phones and computers on its shelves just a month after their launch. Ararat Mardoyan, on the other hand, owns a car brokerage business in Moscow and has already imported several dozen luxury cars in the last six months. Orders in Dubai, India, China or South America, are shipped to Russia from Armenia or the Iranian port of Anzali.
This new monopoly allows the businessman to obtain higher margins: “The demand for luxury cars is particularly important, cars that cost more than 100,000 dollars […] We are selling the cars for around 20% more than before.”
Telegram as a new trading platform
Digital tools are also levers to maintain access to Western products. This is the case with Russian e-commerce platforms such as Ozon and Wildberries that ease the restrictions placed on sellers thanks to much broader and more geographically extended supply lines.
Finally, Telegram messaging also serves as a trading platform for luxury goods, electronic devices, or even the management of complicated financial transactions, such as the transfer of cash between Russia and the United States. Based in Kyrgyzstan, Nurbek bought around 300 iPhones and 100 MacBooks that he later resold in Russia thanks to Telegram.
Source: BFM TV
