Russia Set for Summer of Electronics Shortages as Sanctioned Stocks Dwindle

By guest author Leonid Orlov, Moscow Consultant

Trade blockade bites as country struggles to find substitute suppliers and would-be parallel importers navigate major logistical challenges.

Russia: Digital deprivation: Russian gadget aficionados face seasonal supply shortfall

With western sanctions putting the Russian economy under unprecedented stress, concerns are growing that stocks of certain goods may soon be exhausted. The problem has been exacerbated by the withdrawal of many global brands and retailers from the country and disruptions to a vast number of established supply routes. As yet, it is also unclear as to how effective the recent restoration of many parallel / grey import options will prove to be in making up the expected deficit.

At present, consumer‑electronics items and household electric appliances are the categories expected to be most immediately affected. It has already proven difficult to source comparable alternative items, while there is some expectation that growing consumer concern may soon trigger panic buying and substantial price hikes. Should conventional purchasing patterns be maintained, however, it is believed that sufficient stocks remain to keep shelves full and orders met until mid‑summer.

Perhaps more concerning is the gadgets sector, which is believed to be more vulnerable to the logistics challenges, while also traditionally subject to an early summer sales peak. This latter phenomenon largely relates to the surge in demand occasioned by both the pre‑holiday shopping sprees on the part of students and by the tradition of parents rewarding the academic successes of their children with a new digital device or accessory. Among the items where demand is likely to outstrip supply are many of the more popular brands of e‑book readers, wireless earphones, tablet PCs and smartphones.

Supplies of new desktop and laptop PCs are also expected to dwindle, with fresh stocks only likely to arrive via the comparatively untested parallel‑import channels. This is largely because there are relatively few easily accessible alternatives to the Taiwanese and US brands that have exited the Russian market, while even local manufacturers are heavily reliant on imported components from sanction‑supporting nations. It has yet to be seen how effective the covert consignments being channelled via Turkey, Kazakhstan and Uzbekistan will prove to be when it comes to replenishing the shelves left bare by the official blockade.

For its part, the Russian Ministry of Industry and Trade maintains that the country’s core retailers have sufficient inventory to meet the expected demand for refrigerators, TV sets, freezers, fans, water heaters, boilers, air conditioners and microwave ovens, as well as gas and electric stoves, over the coming months. This is a welcome respite given that many such items are deemed all but essential by Russian consumers as they turn to home improvement and the seasonal refurbishment of their country houses over the summer months. This surplus of stock offers Russia some respite given that it can no longer rely on the once busy assembly lines of Belarus, with the country having to contend with its own multiple sanctions.

In terms of e‑commerce,, Russia’s oldest and second‑largest online marketplace, maintains it has sufficient stocks of gadgets and smartphones on hand to meet short‑term demand providing the purchase patterns of the past two years are maintained. It also has few concerns with regard to its provision of laptop PCs and tablets, largely because its existing relationship is with third‑party agents and distributors rather than directly with brand owners, an arrangement that may circumvent the relevant sanctions somewhat.

More worrying are the brown and white electronics goods sectors. With few Russian manufacturers active in either market, demand to date has been almost wholly met by EU‑based suppliers. While some of the smaller domestic businesses producing comparable items, notably Bork, may in time be able to take some of the slack, they are, again, likely to be hampered by the problem of sourcing imported components and materials.

All of these difficulties and challenges do, however, represent something of an opportunity for any Hong Kong‑based supplier, distributor or brand willing to navigate the multiple challenges of servicing the Russian market. In many ways, the prevailing conditions mirror those of the 1990s, a time when small businesses could enjoy exponential growth by meeting the needs of the country’s vastly underserved market. The added challenge now, though, is that any company bold enough to make such a move must also be wily enough to avoid contravening the vast web of legal restrictions that now govern trade with Russia.