There’s a huge demand being created among consumers in Russia after more than a few dozen retail brands decided to shut shop in an act of opposing Russia’s annexation of Ukraine. However, thanks to diplomacy, Russia is now looking for trading opportunities with India, China, Iran and Turkey to battle the sanctions that have wreaked havoc on Russia’s economy.
The Russian Council of Shopping Centres (RCSC), an organisation representing developers, shopping centre owners and retail chain operators, said it was negotiating with its corresponding representatives in the four countries about finding alternatives to western brands.
“A list of foreign companies that have temporarily ceased operations in Russia was sent to them so that appropriate equivalents can be found,” a statement on the RCSC website read.
“Over time this will help supplement or completely replace goods of the defunct brands with ones of a similar quality and design.”
Sanctions have hampered supply chains and fuelled panic buying among some Russians, with medicine and sugar shortages reported, and accelerating inflation is set to send prices higher.
During an RCSC meeting of more than 100 market participants, the challenges facing Russian retailers were discussed.
RCSC cited Igor Maltinsky, director of development at Melon Fashion Group, as saying that the main challenge facing domestic retail firms was the uncontrollable growth of production costs, due to huge increases in procurement and logistics costs, as well as many other related factors.
Meanwhile, India is in the process of setting up an alternative payments system to maintain its trade with Russia, identifying a potential bank, an official aware of the development had mentioned earlier last week.