Forget London, Paris & New York: Russia’s Fashionistas Now Shop In Minsk

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Western brands that pulled out of Russia left a door open in Belarus 

Belarus has become the unlikely saviour for Russian shopping tourists, as many brands that left Russia continue to operate in the country. The demand for air tickets from Russia to Belarus has tripled since March, while the prices have decreased by 40%. Rail tickets between Russia and Belarus have also fallen in price, with many trains sold out. Russian Tour operators have also begun to explore the demand – Minsk city tours have increased by 20% over the same period last year. Instead of Europe, Russians are now actively going to Belarus.

Many brands that left Russia due to government or shareholder pressure continue to operate in Belarus, a country that many in the West are unfamiliar with. However, McDonald’s restaurants are open, and general stores have a wide range of Coca-Cola and Pepsi products. But the main draw of Russia’s fashionista’s are the Belarus Inditex shops. These stock Zara, Massimo Dutti, Bershka, Stradivarius and Pull and Bear amongst many other brands popular with Russians. Inditex are a Spanish conglomerate that operates the largest fast fashion outlet globally – the company has 7,200 stores. In Russia though, Inditex, which owns Zara, has closed its 502 shops, and shut down its online sales operations.

Belarussian fashionistas

Nike sportswear and footwear stores also continue to operate in Belarus. It has been reported that Nike are leaving Russia due to supply chain problems, but in Belarus, company representatives confirmed at the end of May that while logistics have become more difficult, goods were being delivered and stores were operating in the country as usual.

Adidas branded stores are also open, while Reebok products are also available in multi-brand sports stores or order online with delivery in Minsk on the same day, for example, to an hotel.

Another popular chain among Russians is the Swedish brand H&M. At present, some H&M warehouse stores are still operational, but in Belarus, three new H&M stores opened – two in Minsk and one in Grodno.

But not everything can be obtained in Belarus. Another brand beloved by Russians, IKEA, has never been operational in Belarus. However, IKEA did manufacture furniture for the company in the country, making tables, chairs, chests of drawers, folding beds, watches, plastic, and textile goods and these were exported to Russia. That has now ceased, although IKEA products from former brand suppliers and resellers can be found on Russian marketplaces and private sales with markups of between 1.5 to 3 times the original cost. The IKEA brand however is likely to be replaced by Russian manufacturers, who will have learned a lot from the IKEA business model. Russia after all has the world’s largest timber resources, and the products are not complicated.

Another popular category for Russian tourist shoppers is technology. In Belarus, Apple, ASUS, Lenovo, Panasonic, and other products are widely available. The iPhone 13 for example is available through Belarus online markets for the same price at which versions are sold in Russia.

There are also price differentials. Zara – which is owned by Inditex, is listing a summer dress for 299 Belarusian rubles. The same dress in Russia would cost 9,000 Russian rubles (€146). With the Belarus-Russia exchange rate on August 17 being 1-24, that represents a discount of 20% to buy the product in Minsk.

Another example is that Oysho pajamas in Belarus cost 185 Belarussian rubles, while in Russia they cost 6,600 Russian rubles. That represents a saving by purchasing the product in Belarus of 32%.

Sinsay is a Polish retailer who sold their Russian business earlier this year but retained the Belarus outlets. Again, Russian shoppers in Minsk have stated that “We went to the local Sinsay and were simply amazed at the prices – they are an order of magnitude lower here in Belarus than in Russia.”

The presence of now inaccessible brands and extremely attractive prices has therefore instigated huge demand for trips to Belarus. With close political and trade ties between the two countries (Belarus is a member of the Eurasian Economic Union, a free trade bloc that includes Russia) and visa free travel between them, Russians bought three times more tickets to this country than in the summer of 2021, according to the Tutu travel service.

Travel prices have also decreased the average cost of a round-trip flight per person decreased from Russian rubles 21,800 to 13,200 rubles (€213) – about 40%. The Aviasales online travel booking service has also noticed a similar decrease in the average costs, stating round trip costs now of Russian rubles 11,100 (€178) as opposed to 19,000 rubles last year.

The volume of Russian railway tickets to Belarus has also increased by 150% according to Tutu and have fallen in price by 17% – to 2,700 Russian rubles (€45) from Moscow to Minsk, a journey of about 7 hours.

In Belarus, hotels though are making a killing – the cost of a night’s stay in a three-star hotel – being the most popular category – has not changed over the year and averages out at Russian rubles 4,100, or €67.

Another benefit is that Russian shoppers can obtain international payment cards from Belarus banks, who continue to issue Visa and MasterCard services. Belarusian banks will accept Russian citizens in opening accounts with just basic documentation, while Russian is the lingua franca, making life easier.

This article was translated and adapted from the Investia newspaper. The original can be seen here

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Russia Briefing is written and produced by Dezan Shira & Associates. During these uncertain times and sanctions imposition, our firm assists Russian companies relocate to Asia, and provides financial and sanctions compliance services to foreign companies operating in Russia. We also provide market research and advisory services to foreign exporters interested in Russia as the economy looks to replace Western sourced products. Please contact us at russia@dezshira.com or visit us at www.dezshira.com.