7 Jul 2022 15:30

Only two int'l brands entered Russian market in H1, over 10 left - analysts

MOSCOW. July 7 (Interfax) - Only two international brands entered the Russian market in the first half of 2022, according to data from the Knight Frank Russia consulting company.

A Vilhelm Parfumerie boutique was opened in Moscow in the first quarter, and the first Li-Ning sportswear store opened in Krasnodar in the second quarter.

Seven new retailers began to operate in the country in H1 2021.

Meanwhile, over ten international companies announced their withdrawal from the Russian market in H1 of this year. These are the Prisma hypermarket chain, the Hesburger, Paulig Cafe & Store, and Starbucks cafes, the Levi Strauss & Co, Nike, and Jacquemus clothing stores, the Jysk and IKEA home goods stores, the Watsons and Coty beauty care chains, and the Victoria's Secret lingerie retailer.

In some instances, stores have reopened after a change of owner and rebranding. These are L'Occitane, OBI, McDonald's, and LPP Group companies Reserved, House, Cropp, Mohito, and Sinsay.

More than 180 companies, including online stores, logistics companies, and media companies, have announced a suspension of commercial and investment activities, as well as suspension of supplies to the territory of Russia. The largest percentage of these companies are brands in the fashion segment at 19%, followed by fast-moving consumer goods and car companies at 12%, and the fewest companies are in the food sector, DIY, home goods, and children's products at 1%.

"Russian shopping malls and department stores are interested in expanding their assortments and opening stores of new brands from Turkey, Kazakhstan, the UAE, Korea, and China in connection with many international companies suspending their activities. Nonetheless, Western companies are striving to preserve their businesses any way they can, turning them over to the management of local players or companies in more favorable conditions," Knight Frank Russia Retail Real Estate Department Regional Director Yevgenia Khakberdieva said.

Turkish public catering chains are set to enter the Russian market before the end of the year, such as franchises of the Chitir Chicken and Yesen Burger fast food chains and Little Kitchen and Arabica coffee shops using their investments. Little Kitchen plans to open three restaurants in 2022, and Arabica plans to launch its first flagship cafe and store in Moscow. Other Turkish brands are in negotiations to expand their presence in Russia and boost sales volumes, including major clothing producers adL, Mudo, LTB, Twist, and Ipekyol. Operators from Kazakhstan and the United Arab Emirates are also discussing entering the Russian market, Knight Frank Russia said.