How the departure of Nike, Apple, Ford and other brands affected competition in Russia

The departure of Western companies from Russia last year due to sanctions significantly affected the level of competition in a number of industries, and not always negatively. These conclusions were made by experts of the audit and consulting agency Kept (formerly KMPG in Russia), follows from their report “The Impact of Foreign Companies’ Exit on the State of Competition in Russia” (available from Vedomosti).

Experts assessed the change in market concentration in 2022 compared to 2021 using the Herfindahl-Hirschman index. The indicator is calculated as the sum of the squares of the market shares of all companies operating in the market. An increase in concentration indicates that, on average, the shares of market participants have increased, while a decrease, on the contrary, indicates a decrease in the weights of participants. The experts analyzed more than 600 representative offices, branches, joint ventures and subsidiaries of foreign companies, and also calculated the concentration indicators of 100 industry markets for 2021 and modeled the expected change in the level at the end of 2022. The main indicator in the calculation formula is the companies’ revenue.