Departed brands resumed advertising activity in the Russian Federation

Electronics brands Honor, Xiaomi, Samsung, Acer and others, which froze advertising activity in Russia since the beginning of hostilities in Ukraine, in 2023 returned their marketing budgets to the level of 2021 or even exceeded them. Companies use a scheme in which the budget is managed by a partner: a retailer or distributor. But even with promotion, it will be difficult for brands to maintain market share due to irregular deliveries, experts say: second-tier Chinese companies that import equipment officially and consistently are also increasing their advertising activity.

According to TelecomDaily, foreign electronics suppliers, which curtailed promotion in Russia from 2022 or even completely stopped official supplies to the country, in 2023 returned advertising activity in the Russian market to 65-100% of the number of mentions that were in 2021. Among the brands there are Honor, Xiaomi, Samsung, Acer and others. A source at one of the companies confirmed the trend, adding that they are “mainly focused on collaboration with bloggers.” Analysts emphasize that in 2022, all of the listed companies had no advertising in the Russian Federation. Also, new Chinese smartphone brands Tecno and Infinix increased their marketing activity by 60%, TelecomDaily specified.

“Some foreign brands resumed marketing activity in the Russian market in 2023,” the advertising holding NMi Group confirmed to Kommersant, also noting Honor and Xiaomi. The Kommersant source clarified that “investments in marketing grew from a zero base in 2022, exceeding the figures for 2021 by 2–5%.”

After the outbreak of hostilities in Ukraine, a number of foreign electronics manufacturers froze or completely stopped supplies of their products to the Russian Federation, including Honor, Samsung, Apple, etc. As The Wall Street Journal reported in mid-2022, Chinese Xiaomi and Lenovo, under pressure from the American authorities, began reduce their sales in the Russian Federation.

In addition to Honor and Xiaomi, South Korean Samsung is also showing advertising activity, say the IT holding Fplus: “Samsung competes with a large number of Android manufacturers and does not have an audience like Apple, so it is forced to maintain targeted marketing activities and maintain customer loyalty.” Samsung did not comment on advertising activity, saying only that “the company does not supply electronics to the Russian Federation.” Xiaomi did not answer Kommersant, Honor declined to comment, and Acer found it difficult to answer.

According to Fplus, at the end of 2023, Samsung’s share in smartphones decreased by 8 percentage points, to 11.2%, in units, while Honor’s share doubled, to 5%. Xiaomi’s share, together with the vendor’s sub-brands, decreased slightly to 30.8% (a year earlier 31.1%). At the same time, according to MTS, Tecno’s share in units increased by 6%, to 14%, in 2023. Another Chinese vendor, Infinix, which was not even among the top five best-selling devices in 2022, occupied 10% of the market in 2023. In total, in 2023, according to Fplus, 30.8 million smartphones were sold in the Russian Federation (an increase of 24%). In monetary terms, sales increased by 22%, to RUB 684 billion. Tecno and Infinix did not answer Kommersant.

Kommersant’s interlocutor among the top managers of a large retail chain explains that due to sanctions risks, vendors use trade marketing: the brand transfers the advertising budget and the right to manage the promotion strategy entirely to third parties, mainly marketplaces, retailers and distributors. A Kommersant source among smartphone vendors confirmed that all advertising activity for devices that are not officially supplied to the Russian Federation goes through retailers and marketplaces. Wildberries clarified to Kommersant that advertising activity on the site in 2023 in the electronics segment increased by 6.6 times compared to the results of 2022. Ozon and Yandex Market declined to comment; Megamarket did not respond to Kommersant.

Despite the increased promotion of departed vendors, experts are skeptical about their prospects for increasing market shares. “The problem is unsystematic deliveries,” explains one of Kommersant’s interlocutors. “Sometimes it turns out that a store advertises a specific model of laptop or smartphone, but after a few days its stocks run out, and the entire advertising strategy turns out to be unsuccessful.” A Kommersant source among electronics suppliers adds that “against the background of Chinese competitors, such as Tecno, Infinix and others, with official supplies and a large-scale advertising campaign, the marketing activity of the departed vendors looks faded.”

Timofey Kornev, Yulia Yurasova