In particular, the smartphone giant Xiaomi and the car manufacturers Chery, Great Wall Motor and Geely, the parent company of the Swedish Volvo, are among the companies that have seen an increase in turnover in recent months. In particular thanks to the expansion in Russia.
Where Apple’s iPhone and Samsung’s Galaxy once dominated the Russian smartphone market, these devices are no longer available. According to the research agency Counterpoint Research, the Chinese Xiaomi and Realme are now at the top of the sales lists, writes CNN. Xiaomi, Realme and Honor, Huawei’s former budget brand, increased shipments to Russia by 39, 190 and 24 percent respectively in 2022.
It’s no surprise. Chinese manufacturers were already popular in Russia before the war. But where the market share hovered around 40% before the invasion, that percentage is now around 95%. The market share of the aforementioned Apple and Samsung, however, has plummeted from 53 percent to just three percent. The fact that smartphones of these brands are still sold is the result of parallel imports of goods from neighboring countries such as Kazakhstan.
Automobiles
A similar story takes place on Russian roads. For a year now, Chinese automakers such as Chery and Great Wall Motor have entered the top 10 passenger car brands. German brands like BMW and Mercedes have all but disappeared, according to data from S&P Global Mobility.
According to data provider Autostat, Russians bought a record number of Chinese cars last year. Sales rose seven percent in 2022, even as the market collapsed. Lada, the local brand that was already Russia’s most popular car manufacturer before the war, also saw its market share grow significantly. Overall, the Russian car market decreased by almost 60% in 2022, Autostat itself reports.
Renault decided, following the war, to sell the majority stake in Lada. And Korean brands such as Hyundai and Kia have also decided to withdraw from the Russian market. “And that has left a huge gap in the market,” Chinese consultancy Sino Auto Insights told CNN. “The Chinese are happy to fill this gap.”
“Russian and Chinese brands are like substitutes for real players.”
But as Russians place great value on famous premium brands, parallel imports of Mercedes and Audi from Kazakhstan and Uzbekistan are flourishing. According to analysts, this is reminiscent of the period around the collapse of the Soviet Union in the 1990s.
Durable
Whether China’s presence in the Russian smartphone and car market will be sustainable in the long run depends on the war in Ukraine. But even if international brands return, Chinese players could keep a foothold, says Sino Auto Insights. In particular, the recovery of the supply chains could take a long time.
“I say this a little harshly, but the Russian and Chinese brands are like substitutes for real players. But stunt doubles can become regular players, a Sino Auto Insights spokesman told CNN.