In Russia, the demand for large household appliances from Chinese and Turkish brands has noticeably increased. Sales of the most popular categories from these countries increased by about 20% over the year. This is a temporary filling of a niche or new but permanent names in the Russian household appliances market, experts explained to aif.ru.
The story is simple.
Chinese and Turkish brands have significantly strengthened their positions in the Russian market, experts say. But according to leading analyst of Mobile Research Group Eldar Murtazin, everything is logical and natural. “The story is very simple. Indeed, we have undergone a reorientation away from European brands. Although they were European at first glance. Essentially, inside it was China. If we talk about reorientation, today we buy Chinese goods under Chinese brands, Turkish goods under Turkish brands (if we talk about large household appliances). There is nothing wrong. European brands left on their own. Prices are market prices, they are in the market, there is competition,” says the expert.
Eastern brands are replacing Western ones, says Maxim Chirkov, associate professor of the Department of Economic Policy and Economic Measurements at the Institute of Economics and Finance of the State University of Management. “The household goods market has changed quite a lot in 2023. There was a reorientation to the East. This process will also intensify in markets close to Russia, Belarus, and Kazakhstan. The market for household goods in 2022 and 2023 remained at fairly high levels thanks to parallel import systems,” the expert notes.
There is no shortage in stores. But it’s easy to get confused by new brand names. So far, the Russian consumer is not able to adequately evaluate the new brand from a price-quality point of view.
The Chinese brand Haier has become leader of the Russian market refrigerators and washing machines. Again, the Chinese brand Hisense can be found in different product groups. Uzbek Artel does not yet claim leadership, but is already represented in a large number of categories. The company “POZiS” from Tatarstan (part of the state corporation “Rostec”) last year began making refrigerators under the Soviet brand “Mir”. Another Chinese company Chuwi specializes in the production of tablets and robotic vacuum cleaners. Rombica is a brand from Singapore, which is represented in Russia with headphones, cables and other accessories. The Chinese brand of gaming laptops Thunderobot belongs to the Haier corporation, which rightly decided that it would be wrong to sell washing machines and computers for gamers under the same name.
Chinese players are ready to enter the Russian market strategically, Ivan Fedyakov, CEO of INFOLine, is confident. “Moreover, they are one of the few who actively accompany this entry with advertising and media campaigns, support in the blogosphere, and on television channels. This certainly affects their penetration level,” says the expert.
What is the price?
Prices have increased, says economist Chirkov. “Prices for many categories of household appliances are higher than they were before 2022. Prices in 2024 for household appliances will increase by more than 10%. Although the price increase is not as noticeable due to the slower growth of the average bill, consumers prefer to buy inexpensive models of equipment in conditions of economic instability. A rise in price at this level cannot be called too high. I would say that it is even below expectations. From my point of view, the rise in price is largely due to the low exchange rate of the Russian ruble against the dollar. If the ruble strengthens against the dollar, a pullback in equipment prices is quite possible. Logistics, which was the reason for the rise in prices in 2022, has now been built quite efficiently,” explains the economist.
What if it breaks?
Service support has not yet been built for all brands, but the process is gradually progressing, says analyst Murtazin.
“You just need to understand that European brands have been present on the Russian market for more than 25 years. These changes don’t happen overnight. However, there is service. Its quality has always left much to be desired among all brands, and among Chinese brands it is in its infancy. But we have very civilized retail, so customer service is still available. For example, from the point of view of warranty service (1-2 years) there are no problems. If we talk about longer periods, then problems, of course, arise. But the equipment comes in different forms, of different quality, in different price groups,” the expert concludes.
Since these players appeared on the market relatively recently, it is too early to talk about the quality of service for their products, says INFOLine General Director Ivan Fedyakov.
“I think that consumers may encounter certain problems, especially since this equipment is not always adapted for the Russian market. For example, the Chinese managed to put logos of popular streaming services in Russia, such as “Kinopoisk”, “Okko”, on TV remote controls; however, in accordance with the sanctions, they removed these applications from their stores. That is, there are buttons, but they don’t work. Consumers are forced to dance with a tambourine to get these applications. For technically advanced users, this is not difficult; for ordinary users, these buttons will most likely remain beautiful, but non-functional buttons, and not a real service,” says the expert.
It’s not all bad.
According to experts, contrary to expectations, 2023 turned out to be quite successful for the Russian household appliances market. “And I would like to note a remarkable fact: in 2023, the Russian household appliances market will return to the level of 2021, which was very successful. Despite all the difficulties, 2023 is extremely successful overall for the household appliances market. We were able to win back the fall of 2022. That is, in essence, the market has really grown,” summarizes Eldar Murtazin.
The market picture has certainly changed, but it cannot be said that a tectonic shift has occurred and there is no turning back, Fedyakov believes. “Still, not much time has passed, and not much Eastern equipment has been sold due to the decline in purchasing activity in general. And it’s not just a matter of declining incomes. Thinking consumers understand that they can, of course, buy expensive equipment and electronics now (as well as an expensive car), but this purchase does not guarantee 100% problem-free operation. Of course, in normal markets this is what service is for, but this is not about our market now. That is, a cheap purchase occurs with the thought: “If it breaks, it’s easier to throw it away and buy a new one.” And those who do not want to switch to Chinese equipment are looking for ways to repair European equipment: the demand for equipment repair has now increased to 50%. This suggests that the market has not adjustedthe consumer is still holding on to their European goods,” the interlocutor concluded.
