Bags / Shoes & Accessories

Under the pressure of sanctions from the United States and other Western countries, well-known Western sports brands such as Nike, Adidas, Puma, and Reebok have joined the army of interrupting their business in Russia. As early as March, Adidas announced the suspension of its store sales in Russia, and online shopping has also been interrupted. Puma, which has about 100 brand stores in Russia, also announced its withdrawal from the Russian market. Reebok also joined the retreat from the Russian market, selling its Russian business to a Turkish entrepreneur.

At the end of April, on the street in the center of St. Petersburg, Russia's second largest city, a light sign art work appeared. It consisted of the letters "ZAMESTIM", each of which corresponds to a Western brand that has left the Russian market. "Z" for ZARA, "A" for Adidas, "M" for McDonald's...

On June 23, the American sportswear manufacturer Nike said it had decided to withdraw from Russia.

When a number of Western sports fashion brand stores open their shutter doors in Russia, is there a "vacuum" in the Russian sportswear market? Which brands will the "low tide" of Western companies bring opportunities?

Russia reports that Russian footwear production is growing amid the departure of foreign clothing brands. According to the Russian Advanced Technology Development Center, the number has increased by one-third since February. At the end of winter in early 2022, Russian companies produced a total of about 11 million pairs of shoes, and by May production had reached 15 million pairs.

Yusupov, deputy director of the Russian Central Regional Development Center, said that domestic production in Russia can fully meet the needs of Russians. The large-scale withdrawal of foreign companies from Russia did not have a major impact on the Russian footwear industry. Deliveries from foreign brands including Nike, Adidas, Puma and Converse have been halted since February, but their places are likely to be replaced by existing players.

Russian experts believe that in the future, the replacement of foreign brands that leave is most likely to be Russia's own brands or China's Anta, Li Ning and Turkey's Kinetix and other international sports brands. In 2021, China will become the leader in Russian footwear imports. More than half of Russia's foreign footwear goods are imported from China, with a total value of more than 1.5 billion US dollars, and the import volume is almost double Russia's domestic production.

According to information from the Russian consulting firm "Knight Frank Russia", in 2022, only two foreign brands will enter the Russian market, including the Chinese "Li Ning" sports brand.

The two companies that have decided to enter the Russian domestic market in 2022 are the American boutique Vilhelm Parfumerie and the Chinese "Li Ning" sports brand.

According to reports, this is the smallest number of foreign brands entering the Russian market since the first half of 2014. Even at the height of the pandemic, six foreign companies entered the Russian market in the first half of 2020.

Following the start of the Ukrainian military operation, a number of large international companies announced to reduce their presence in the Russian market or withdraw from Russia altogether, as well as sell their assets to local businesses.

There have been media reports that Li Ning plans to open 15 to 20 retail chain stores in Moscow and St. Petersburg. In addition, Li Ning will also cooperate with local multi-brand sports goods e-commerce companies.

Russian Industry and Trade Minister Denis Manturov said on March 23 that the departure of some foreign brands from Russia does not mean that the Russian people will have difficulty buying clothes. On the contrary, rising import prices and the suspension of sales of some brands will benefit the development of Russia's domestic apparel industry.

He said: "Now is the time to promote the growth of Russian local brands and open a chain of Russian local brands of clothing and footwear. We will do our best to help our company in this work.

Chinese clothing brands such as Anta and Li Ning have the potential to enter the Russian market

Since Russia launched a special military operation in Ukraine, a number of Western clothing brands, including Zara and H&M, have announced their departure from the Russian market. So, do Chinese brands including Li Ning and Anta have the potential to enter the Russian market in the future?

Ma Youjun, chief expert of the Sino-Russian Comprehensive Strategic Cooperation of Heilongjiang University, and the chief expert of the Collaborative Innovation Center of Heilongjiang University and the Northeast Asia Strategic Research Institute of the Heilongjiang Academy of Social Sciences, said in an interview with the Russian Satellite News Agency on the 24th that Western sanctions are conducive to the entry of goods from developing countries into Russia. market, and high-quality and cheap Chinese products have more potential.

In addition, RMB payment and settlement may become the main payment method for Sino-Russian economic and trade cooperation in the future. After Russian President Vladimir Putin announced a special military operation in Ukraine on February 24, the United States, the European Union and other Western countries have significantly upgraded sanctions against Russia. A series of multinational companies announced their departure from the Russian market, involving logistics, film, digital equipment, clothing, e-commerce and other industries. On the evening of March 2, the world's second largest fashion retailer, Swedish clothing brand H&M announced on its official website that it would suspend all sales in Russia. Since then, the Spanish group Inditex has issued a statement saying it has stopped trading in Russia, closed 502 Zara stores and stopped online sales. Inditex owns ZARA, PULL&BEAR, Bershka, Oysho, Massimo Dutti and many other well-known brands. Mango, Spain's second-largest fashion retailer, said it would also temporarily close 120 of its stores in Russia, and third-largest clothing group Tenda made a similar decision.

Talking about the Western sanctions against Russia, Ma Youjun said that since the conflict between Russia and Ukraine, the United States and Western countries have imposed comprehensive sanctions on Russia, which has put Russia in a difficult position in various fields such as economy, technology, culture and society. Considering that one of the purposes of economic sanctions against Russia is to completely crush Russia, these sanctions may not be lifted immediately after the war.

He also believes: "Although the sanctions have a serious impact on the Russian economy, they do provide favorable conditions for other developing countries' products to enter the Russian market. The current cooperation between China and Russia is based on the 'China-Russia comprehensive strategic partnership of coordination in the new era'. Chinese goods have already entered the Russian market. Since the disintegration of the Soviet Union, Chinese goods have accounted for a large proportion of the Russian market. Under the circumstance that the development of the Russian economy has been seriously affected by sanctions, high-quality and cheap Chinese goods may be more popular in the Russian market. welcome."

Experts said that it can be seen that China's sales in the Russian market are mainly daily necessities and textiles, mainly private enterprises, joint-stock enterprises or unofficial enterprises. These enterprises are not included in the sanctions of Europe, the United States and the West. From the perspective of strengthening cooperation in the future, the economic sanctions against Russia will lead to rising global commodity prices, which will inevitably increase the risk of a world economic crisis. Therefore, in addition to considering that the Russian market may further expand the demand for Chinese goods, it remains to be seen whether the payment capacity of the Russian market will be affected by the economic downturn. At present, Chinese brands such as Anta and Li Ning have very few stores in Russia. Talking about future cooperation methods, Ma Youjun believes that RMB payment and settlement and cooperation with small local banks may be conducive to promoting the export of Chinese brands to Russia.

Ma Youjun said: "According to research, about 1/3 of China's goods in the Russian market use US dollars, 1/3 use RMB, and 1/3 use rubles. It is obviously not possible to use US dollars for payment in the future, and only renminbi and rubles can be used. However, the exchange rate of the ruble fluctuates greatly, so RMB payment and settlement may become the main payment method for economic and trade cooperation between the two countries in the future.”

He pointed out that I personally think that it is possible to strengthen cooperation with Russia through local private banks such as Harbin Commercial Bank, because compared with large state-owned banks, local private small banks are not subject to Western sanctions. This can also provide convenient development conditions for Chinese brands including Li Ning and Anta to export to the Russian market in the future. Of course, Chinese brands also need to grasp the scale when entering the Russian market. On the one hand, they should not over-occupy the Russian market;