From Zara To Coca Cola, Top Brands Exit Russia But Goods Remain Available For Customers

The impact of European, North American, and Japanese brands pulling out from Russia is minimal on consumers. The delivery time has been impacted and certain goods have become more expensive

Zara-owner Inditex closed almost 502 Russian stores after Moscow sent troops into Ukraine

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Western brands in Russia have moved out of the country following its Ukraine invasion, but their goods still remain accessible to users. There are trucks loaded with Coca Cola moving across the border into Russia while tourists are seen returning from abroad with Zara's latest designs and local online marketplaces have stocked up IKEA's furniture.

Even as European, North American, and Japanese have pulled off from Russia, the impact on Russian consumers is next to minimal. The delivery has been impacted with longer time and certain goods have become more expensive.

The move has seen an impact on supply routes, but the products remain available both online and in stores, according to the news agency Reuters report. Now, it depends entirely on buyers to look for goods.

It is to be noted that the vast majority of goods concerned are not subject to sanctions and these cross-border flows are legal.  The availability of products shows the challenge companies face in controlling supply chains when exiting a market.

Zara-owner Inditex closed almost 502 Russian stores after Moscow sent troops into Ukraine, and then sold them to UAE-based Daher Group. However, the brand is still alive due to small-scale imports and online sellers, based on the agency's review of six major online marketplaces and conversations with buyers and sellers.

Albina, 32, who went to Minsk last summer came back with 33,000 roubles ($442) worth of Inditex-brand Zara, Bershka and Massimo Dutti clothes for herself and friends, the report said. Albina told the agency about buying clothes in Paris and Dubai using a network of online sellers.

"There are pages on Instagram, on Telegram, there are girls I know who moved to live in Europe or Istanbul or Dubai," she said. "They collect orders, let's say in Istanbul, they take 15%-30% (as commission), then get them delivered here and you pay for the delivery."

Last year's strong rouble and weak Turkish lira played into Russian consumers' hands.

With supply chains being hit, Russia legalised so-called parallel imports that allowed retailers to bring in products from abroad without the trademark owner's permission.

E-commerce sites sell a wide range of imported goods, and sellers often advertise that they bring products from abroad.

Similarly, after Coca-Cola Co stopped producing and selling drinks in Russia last year, the drinks are imported with labels on cans and bottles depicting they have arrived from Europe, Kazakhstan, Uzbekistan and China.

This only makes the product expensive. For instance, in a Moscow supermarket, three cans of Coca-Cola were on being sold for three different prices, imported from Denmark, Poland and Britain respectively. "Contacts were quickly established and new contracts with new partners signed, new money flows and logistical supply chains with Turkish, Polish and Kazakh companies were launched," said a senior employee at a major retailer.

Coca Cola is now available from more countries now. "However, as usual, it is the buyer who pays more for these new inconveniences," the employee added.

With new routes being developed the extra logistics, travel and scaling costs will fall, and though trade remains relatively inefficient, these new relationships are here to stay, Ram Ben Tzion, CEO of digital vetting platform Publican told the agency.