Hong Kong (CNN) — When the highly anticipated iPhone 16 hit the market, shoppers in Hong Kong noticed an influx of unexpected patrons: Russians, notably seen clutching significant amounts of cash, eagerly swarmed Apple stores throughout the city.
As new customers streamed out with their coveted devices, enterprising Russian buyers quickly moved in, attempting to seal deals by offering as much as 12% above the retail prices for the newly launched technology.
“We want to buy as many as possible,” stated Nick Alexenkov, a Russian buyer, outside the bustling Apple store in Tsim Sha Tsui, an area renowned for its vibrant shopping scene.
Moscow’s invasion of Ukraine has significantly inflated the prices and limited the availability of iPhones in Russia, compelling tech enthusiasts to procure the devices from abroad.
Shareholders at Apple made the decisive move to “pause” product sales and services in Russia beginning in March 2022, a direct consequence of President Vladimir Putin’s military aggression against Ukraine, triggering a profound geopolitical crisis in Europe.
In response to the invasion, Western nations implemented stringent sanctions on technology exports to Russia, while numerous international brands withdrew their operations, severely affecting the market for consumer electronics.
Consequently, the scarcity of iPhones in Russia has skyrocketed prices, with devices frequently costing up to 70% more due to complex import struggles, even though Moscow initiated a scheme in late 2022 to formally allow gray or parallel imports, attempting to facilitate the sale of iPhones without the brand owner’s endorsement.
Upon the global release of the iPhone 16 on September 20, the device became available through at least two major retail chains in Russia: Mobile network operator MTS and M.Video-Eldorado, a leading electronics outlet that reported acquiring its stock from “all over,” according to Reuters.
Many enterprising individuals have joined the fray, spotting an opportunity for profit in the ongoing trend of overseas iPhone purchases.
Alexenkov, the Russian buyer observed in Hong Kong, expressed an expectation to yield a profit of up to 25% for every device, despite offering to pay a 12% premium over the retail price in order to secure the sought-after phones. Notably, the absence of sales tax in Hong Kong enhances the allure for parallel traders looking to capitalize on this market void.
The 30-year-old went all-out for the much-coveted 1-terabyte Pro Max model, investing approximately $2,000 for each phone — an expenditure that exceeds the official pricing in the city by around $250.
“(That model) is very popular in Russia, except the desert color,” he noted, illustrating the shifting preferences for high-end mobile technology.
Alexenkov conveyed confidence about profitability even if he resells the devices at lower rates than what major retailers are charging in his homeland. M.Video, for instance, lists the 1-terabyte model at a staggering 249,999 rubles ($2,710), nearly 1.7 times higher than the price in the United States.
However, potential profits could be even greater. On Avito, a prominent Russian classified-ad platform, listings for various iPhone 16 models are noticeably pricier than those at conventional retail outlets. One listing for the sought-after 1-terabyte model reached up to 254,000 rubles ($2,742).
In the vibrant setting of Hong Kong, near the opulent IFC Mall in the Central district where Apple established its first retail hub in the city back in 2011, several other Russian men were also observed trying to acquire iPhones directly from patrons emerging from the store.
Three of the Russian buyers spoke limited English, but a language barrier was not a significant hindrance to their business transactions. One buyer brought his son along, who proved to be fluent in English and acted as the interpreter for the group.
Although they opted not to disclose their identities to CNN, the group shared that they had traveled from Moscow to capitalize on this unique buying opportunity.
A local man from Hong Kong seeking to sell two 1-terabyte Pro Max models lamented that, at $2,027 each, the offers from the Russian buyers fell short of his expectations. However, the buyers quickly revised their offer to $2,040, leading to a successful negotiation.
When inquired whether they harbored concerns about the viability of their investment, the buyer’s son confidently replied to CNN: “There are rich people (in Russia) and they want the new colors.”
**Interview with Nick Alexenkov: Russian Buyer in Hong Kong for the iPhone 16**
**Interviewer**: Nick, thank you for taking the time to speak with us today. We’ve seen a surge of Russian buyers, including yourself, buying iPhones in Hong Kong since the launch of the iPhone 16. What motivated you to come here for this purchase?
**Nick Alexenkov**: Thank you for having me! The main reason for my trip is the scarcity of iPhones in Russia, particularly the iPhone 16. Since the invasion of Ukraine, Apple has paused its sales and services in my home country, which has drastically reduced the availability of their products. As a tech enthusiast, I wanted to get my hands on the new model before it becomes even harder to find.
**Interviewer**: That makes a lot of sense. We understand you are paying a premium for these devices—offering up to 12% above the retail price. What do you hope to achieve with this strategy?
**Nick Alexenkov**: Absolutely. I’m willing to pay a premium because I see a significant opportunity for profit. I expect to mark up the prices by about 25% once I return to Russia. Due to the high demand and limited supply, people are eager to pay more for the latest technology. Plus, there’s no sales tax in Hong Kong, which makes it a more attractive market for these purchases.
**Interviewer**: You mentioned the unavailability of certain models in Russia. What specific model are you purchasing, and why is it so in demand back home?
**Nick Alexenkov**: I’m going all out for the 1-terabyte Pro Max model. It’s incredibly popular in Russia due to its high storage capacity and features, except, interestingly, for the desert color—people seem to prefer other shades. The demand for high-end mobile technology is soaring there, especially with the current market conditions.
**Interviewer**: Given the geopolitical context and sanctions, how do you see the future for tech enthusiasts like yourself in Russia?
**Nick Alexenkov**: The situation is tough for us right now. Prices have skyrocketed in Russia due to import struggles, and many of us are forced to look abroad for the latest gadgets. While some companies have tried to work around the sanctions through parallel imports, it remains a risky and costly endeavor. As a buyer, I hope this trend of traveling to places like Hong Kong continues, but it’s uncertain how long it can last.
**Interviewer**: Thank you, Nick. It’s been enlightening to hear from you about the experience of Russian buyers navigating this unique market situation. We wish you luck with your purchases!
**Nick Alexenkov**: Thank you! I appreciate the opportunity to share my story.
