With the war in Ukraine now dragging on for 6 months, Russian entrepreneurs are dreaming up new ways to supply consumers with Western products. Latest example: the launch of a new Russian channel copying Starbucks codes.
Ikea, H&M or Starbucks: the list of major Western groups that have announced their withdrawal from the Russian market has grown in recent months, following the Russian invasion of Ukraine.
Meanwhile, President Vladimir Putin is doing his best to maintain the illusion of normalcy among his people. The Kremlin thus encourages a system of parallel imports, which has enabled entrepreneurs to continue to supply certain Western products to consumers. Still others are launching generic brands, which look just like the originals.
The Russian Starbucks
This is particularly the case of Stars Coffee, a Russian chain that has replaced the coffee giant Starbucks, which opened its first restaurant in Moscow on Friday with the slogan “Bucks is gone, the stars have stayed”.
Last May, the American chain known for its lattes and frappuccinos announced its permanent withdrawal from the country. It was then that at the end of July, an astonishing duo – the Russian rapper Timati and the restaurateur Anton Pinski – did not hesitate to acquire the group’s 130 restaurants.
Co-owner of the Stars Coffee chain, rapper Timur Yunusov, at the inauguration of his cafe in Moscow, Friday August 18 [MAXIM SHIPENKOV – KEYSTONE]
On its logo, the green and white mermaid has been replaced by a girl in a “kokochnik”, a traditional Russian headdress. Early customers don’t seem to see a big difference.
“I loved Starbucks, and now it’s finally reopened – even if it’s because of the rebranding. In any case, they will offer similar drinks, so I’m very happy,” rejoices Anastasia, a young Muscovite , plastic cup in hand.
All of the chain’s restaurants are due to open in Russia by the end of September, according to the owners, and regarding 80% of Starbucks’ approximately 2,000 employees have agreed to stay with the new chain, according to the same source.
On June 12, the “Russian McDonald’s” also opened their doors with great fanfare under the name “Vkousno i totchka” (Delicious. Point).
After more than 30 years of presence in Russia, the famous fast food chain announced in mid-May its definitive departure from the country and resold its activities, but not the name of the brand, to a Russian businessman, Alexandre Govor, also co-founder of an oil refining company.
Parallel market
The fashion industry has also experienced a shake-up in the country. Brands like H&M announced their final departure from the country in mid-July.
The Swedish ready-to-wear giant has decided to leave its doors open for a few more weeks in order to liquidate stocks, and thus reduce the cost of its departure, which has reached 200 million euros. At the beginning of August, customers were still rushing to hope to obtain the latest collection of the moment.
Customers line up outside the H&M store in a shopping mall in Moscow on August 3, 2022. [MAXIM SHIPENKOV – KEYSTONE]
To meet this demand and circumvent the sanctions, some investors are now supplying themselves via a parallel network, as explained The Guardian in an article.
Concretely, local entrepreneurs buy Western products by bringing them from neighboring countries: Armenia, Belarus, Kazakhstan and Kyrgyzstan.
“The idea to sell Zara products came from my wife, who said she really wanted the clothes to come back,” explains Aleksandr Gorbunov. The real estate investor from Siberia has just opened a store – Panika (panic) – to sell Zara clothes imported from Kazakhstan.
These imports are actually encouraged by the Russian authorities. Objective: to ensure that the population feels as little as possible the pressure of the sanctions decided once morest the Kremlin.
“Western consumer products that may seem insignificant can have a lot of value for the average Russian,” sociologist Grigory Yudin told the British daily.
Other categories of products, such as automobiles or certain technological products, are transported by devious means. The Russian government has gone so far as to publish a list of foreign brands eligible for parallel import.
Story in two shades
While consumers seem spared, the impact of Western sanctions on the Russian economy is far greater than official figures show, according to a study by Yale University.
This image of a Russian economy that is holding up despite sanctions is the result of “selected statistics” by Russian President Vladimir Putin, assure these management experts.
With an expected GDP recession of 6.0% in 2022 (compared to 8.5% expected in April), the country is doing a little better than expected according to the International Monetary Fund. But the recession in 2023 should on the other hand be stronger than expected.
>> Read also: Sanctions that weigh very heavily on the Russian economy
agencies / Doreen Enssle
