Chinese smartphone manufacturers will open branded stores in Russia in 2024

Chinese manufacturers of smartphones, tablets, laptops and other electronics Tecno and Realme plan to open branded stores in the Russian Federation in 2024. For brands that are strengthening their presence in the country, showrooms are more likely to help with promotion and increasing consumer confidence than with direct sales, which are increasingly moving online, market participants note.

The Chinese smartphone manufacturer Tecno plans to open several pilot brand stores together with a partner in the first quarter of 2024, brand sales director Viktor Kolesnichenko told Kommersant. He did not specify the number of points, noting only that “own stores will allow us to present the entire range, as well as demonstrate the entire ecosystem to customers.” “The offline presence of a brand increases the trust and loyalty of the audience,” believes Mr. Kolesnichenko.

Another Chinese smartphone vendor also plans to launch its own points of sale. According to two Kommersant interlocutors among retailers and manufacturers, Realme will also begin to develop showrooms in the Russian Federation in 2024. Realme showed interest in the project of its own stores in the Russian Federation, Marvel Distribution confirmed. They believe that the opening of brand stores “should be considered not so much from the point of view of increasing sales, but from the point of view of additional marketing promotion.” Realme declined to comment.

A representative of the Chinese vendor Infinix told Kommersant that the company does not yet plan to open branded stores in the Russian Federation, since the brand is only two years old and is not yet ready for its own showrooms: “For us, this is a matter of prospects for several years of development.” Xiaomi, Samsung (stores of both brands are developed by Inventive Retail Group) and Huawei already have official stores in Russia. IRG clarified that the group manages 25 Xiaomi stores and 97 Samsung stores: “Over the past year, their number has not changed significantly. Some stores were closed, and instead they were opened in other shopping centers.”

In February, RBC reported that the number of electronics stores in the Russian Federation decreased for the first time – by 5% due to a decrease in traffic in shopping centers and a shift in sales online. After the outbreak of hostilities in Ukraine, many foreign vendors froze their business in Russia and closed their company stores. Thus, in the summer of 2022, Huawei closed four of nineteen branded outlets (see “Kommersant” dated June 9, 2022).

Kommersant’s interlocutor among phone manufacturers explained that the Chinese vendor’s stores were developed by a partner, and they began to close due to losses and the flow of customers online.

According to MTS, in the third quarter, 8.1 million smartphones were sold in the Russian Federation for 181 billion rubles, which is more than the same period last year by 44% in units and 66% in money (see Kommersant on October 3). In terms of money, Apple remains the leader with a share of 29%, followed by Samsung (17%) and Tecno with 8.3%. In units, Xiaomi is in first place (32%), followed by Tecno (15%) and Infinix (11%), Realme’s share decreased year on year both in units (from 16% to 10%) and in money (from 12% up to 6.2%).

After more than 160 international chains left the Russian Federation, the loss of revenue from shopping centers reached 70% (see “Kommersant” dated April 8, 2022). At the end of the third quarter, the share of vacant space in Moscow shopping centers was 11.9%, Nikoliers told Kommersant: “The premises of departed anchor tenants are gradually being filled by new international and Russian brands.”

Regional director of the retail real estate department of NF Group, Evgenia Khakberdieva, believes that mobile retailers, “taking into account their specifics, could take small lots that are not suitable, for example, for Russian clothing brands” or replace competitors such as Svyaznoy, Huawei and Sony. The expert adds that locations with high pedestrian traffic or large shopping centers are already difficult to find and almost always you need to get on a “waiting list.”

Timofey Kornev