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3mo ago

Western Brands Face New Challenges in Potential Return to Russian Markets

As speculation grows over Western companies' return, domestic and Chinese competitors now dominate key sectors in Russia.

A woman walks past a store of the Russian clothing brand Lime in Moscow, Russia February 25, 2025. REUTERS/Shamil Zhumatov
A man walks past a store of Russian clothing retailer Henderson in Moscow, Russia February 25, 2025. REUTERS/Shamil Zhumatov
A woman walks past a closed Dior store in Moscow, Russia February 25, 2025. REUTERS/Shamil Zhumatov
A store of Russian clothing retailer Henderson in Moscow, Russia February 25, 2025. REUTERS/Shamil Zhumatov

Overview

  • The departure of over a thousand Western companies from Russia since 2022 has reshaped markets, with domestic and Chinese brands filling the gaps.
  • Speculation about a potential return of Western brands has been fueled by discussions of a swift resolution to the Ukraine conflict, though no major companies have confirmed plans to re-enter.
  • Russian shopping malls have seen prime retail spaces taken over by local brands, making it harder for returning companies to secure prominent locations.
  • Chinese automakers now account for over 50% of new car sales in Russia, compared to less than 10% before 2022, while domestic carmakers have also expanded their market share.
  • Russian officials have emphasized that returning Western companies would face policies favoring domestic manufacturers, further complicating re-entry efforts.