Page 33 - TURKRptJun22

bne June 2022 Cover story I 33
THE FOURTH RUSSIA
Gorbushka is back
a volte-face only two months after extreme sanctions were imposed and made parallel imports legal, effectively legalising piracy once more in an effort to keep the gizmo-crazy Russians supplied with all their favourite widgets.
Before the war Russians bought some 30mn smartphones a year, but without the formal relations with the producers importing that amount of phones is impossible. In the place of re:Stores, a legion of small traders have sprung up and import phones and other goods via third countries, but the lot size is necessarily limited and the markups are higher, adding as much as 30% to the prices. At the same time, none of the goods sold
in Russia carry the manufacturer’s warranty and on phones many of
the preinstalled apps do not work.
For those with a little more money
or time on their hands, a trip to the local electronic store while on holiday has become de rigueur during annual summer holidays, with the more enterprising Russians offsetting the cost of their break by filling a suitcase with hard-to-find consumer goods.
Industrial regression
While Ukraine flourishes, life in Russia continues to go backwards after it was cut off from the international market five years ago. As bne IntelliNews reported a year before the war started, Russia’s sanctions soft underbelly
was its almost total dependence on imported precision tools and advanced
Ben Aris in Berlin
On a warm day in June the crowds throng the Gorbushka electronics and media market in the Fili Park in west Moscow. The new iPhone XX is out and since Apple pulled out of Russia a month after the war in Ukraine broke out five years ago, it is not officially on sale in Russia. But it is in Gorbushka.
The famous market came to prominence in the 1990s after the fall of the Soviet Union. Traders flooded Russia with
all the consumer goods that were missing from the People’s Paradise
– consumer electronics, movies and software chief among them.
The so-called “suitcase traders” would fly to Istanbul or Berlin and pack
their cases with sought-after goods
to come back and sell them again
at Gorbushka. Mini-factories were set up to copy the latest Hollywood blockbuster and games and software.
Already in the Yeltsin government the government tried to stamp out the rampant pirating of intellectual
property and banned parallel imports – the import and sale of goods without the permission of the copyright holder. But it was difficult. Yeltsin sent armed police officers to close down Gorbushka several times before the market, which turns over hundreds
of millions of dollars a year in sales, was finally forced to go white. Under Russian President Vladimir Putin
the market continued to flourish,
“The famous market came to prominence in the 1990s after the fall of the Soviet Union. Traders
flooded Russia with all the consumer goods that were missing from the People’s Paradise”
but increasingly the vendors had legitimate distribution deals with
the manufacturers of the white goods and intellectual property holders.
Now the market is back in all its former glory. The Russian government did
technology or software. Cut off
from the rest of the world and then economically flat on its back for over
a decade, Russia missed out on two tool-making revolutions and by the time it started to grow in the noughties industry was hopelessly behind. Despite
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